CLARK FIELD, PAMPANGA, September 8, 2003  (STAR) By Ding Cervantes  - An open skies agreement between the Philippines and the United States will take effect on Oct. 1.

Transportation Assistant Secretary Edilberto Yap, Air Transportation Office (ATO) chief, however, allayed fears of local airlines that the new policy would displace them.

"I donít think US airlines would gobble up our local airlines," he said. "We donít expect much impact of open skies for US airlines on our local airlines since the aviation industry is really down," he said.

However, Yap said, Philippine Airlines (PAL) continues to lobby against the implementation of the air agreement which has been postponed several times.

"But the fact is that PAL lacks planes so that it even uses its wide-bodied aircraft which fly to Hong Kong and Bangkok to also accommodate local flights to Davao and Mactan," he said.

"This lumping of flights often result in delays (of scheduled flights)," he said.

Yap said the open skies agreement would entitle US airlines to more flights to the Philippines and also arrange for landings in any airport in the country.

"But I donít think that US airlines would find it feasible to land in other parts of the country such as Davao, so thereís no need to worry about too much competition," he said.

US airlines will definitely absorb domestic routes in the country. Yap said PAL has a limited fleet of only 23 aircraft consisting of Boeing 747s and 737s, and Airbuses 320 and 330.

"It has as yet no plans to refleet as it is still recuperating (from financial losses)," he said. "PAL still owes ATO some P1 billion in shares from revenues from take-off and landing fees."

Yap also said PAL has criticized US airlines for "code sharing" with other foreign airlines such as Korean Airlines.

"But this could also be resorted to by PAL since it lacks aircraft anyway," he said.

Under the "code-sharing" scheme, one airline allows another to take its routes and share profits," he added.

Yap said PAL has lost the claim to being the countryís only flag carrier since the local airline industry was deregulated during the Ramos administration.

"PAL has been citing a presidential decree signed by former President (Ferdinand) Marcos designating it as the countryís flag carrier, but at the time the decree was issued, PAL was with the government and there werenít any other big airlines in the country," he said.

Yap said Cebu Pacific and Air Philippines are now also considered Philippine flag carriers.

"Cebu Pacific and Air Philippines pay their dues promptly to the ATO, but PAL keeps on citing the Marcos decree entitling it to some discounts so that its outstanding balance of dues now keeps on growing," he said.

Reported by: Sol Jose Vanzi

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