Thursday, 6 January 2011

Open skies set for Davao, Cebu, Zamboanga, Laoag

by Joyce Pangco Pañares
With Christine F. Herrera, Bloomberg
Manila Standard

THE government will this week declare an open-skies policy in Davao, Cebu, Zamboanga and Laoag, exposing those secondary destinations to more competition from foreign airlines, Executive Secretary Paquito Ochoa said Tuesday.

But the local airlines will still have the exclusive right to serve domestic routes as the executive order coming from President Benigno Aquino III will prohibit cabotage, an airline’s right to carry passengers between two domestic points.

PAL Holdings Inc. fell the most in seven weeks, leading Philippine carriers lower, after Ochoa made his announcement.

PAL, which controls the nation’s biggest carrier, sank 7.2 percent to P4.50, set for the steepest loss since Nov. 12.

Cebu Air Inc., the country’s biggest budget carrier, declined 2.8 percent to P111, set for the sharpest decrease since Dec. 17.

Valenzuela City Rep. Rex Gatchalian on Monday filed House Bill 1601 espousing a “pocket open-skies policy to boost tourism, liberalize air traffic, and prevent business disruption when an airline’s operations are snagged by a labor dispute.

The bill is being supported by the House leadership led by Speaker Feliciano Belmonte Jr.

“Open skies will usher in more competition and that will change the dynamics of the business,” said Rico Gomez at Rizal Commercial Banking Corp.

“Greater competition will always be difficult for entrenched players.”

President Benigno Aquino said in August that the government might give foreign carriers more access because of a labor row at Philippine Airlines.

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