Cebu Pacific: OFFICIAL STATEMENT ON EO 29 – OPEN SKIES POLICY

Cebu Pacific (CEB) supports free and fair competition. CEB welcomes the increase in air services into the Philippines that the Executive Order (EO) on Open Skies seeks; however, it has grave concerns about certain provisions of the EO that are apparently ill advised.

EO 29 would afford foreign airlines benefits so critical that if they are not reciprocated by foreign governments the growth and even the survival of Philippine carriers are at risk.

Under EO29 foreign airlines would be able to fly freely into and out of the country; Philippine carriers are limited to flights specified in existing air agreements with other countries. By way of examples:

1. Hong Kong carriers could now mount as many flights as they liked to Cebu, whilst Philippine carriers are limited to 2,500 seats per week.
2. Chinese carriers would be able to fly from any of the major cities of Beijing, Shanghai or Guangzhou to Kalibo whilst Philippine carriers are denied such access by the Chinese.
3. Korean carriers would have unlimited access to mount flights to Cebu or Davao, whilst Philippine carriers are limited by the current entitlements that are fully utilized.
4. Singaporean or Malaysian carriers would be granted rights to fly to any country beyond the Philippines. Philippine carriers have no access to additional rights to fly beyond Singapore or Malaysia.

Furthermore, to gain these rights foreign carriers will not need to invest billions of dollars for their Philippine operations. Their investments are in their own countries. Their employees are not Filipinos. CEB has invested billions of dollars to expand air services within the country and to and from the Philippines to serve the Filipino public and tourists alike with low fares and brand new aircraft. CEB employs 4300 Filipinos and countless thousands more are indirectly employed because of our operations.

In sum, we want the same benefits from the governments of these foreign airlines. We want reciprocity which is fair and reasonable. We are not asking for special favors, just a level playing field. If the benefits of air services liberalization flow only one way, we are discriminated against in our own country.

CEB has a strong record of supporting increased air traffic rights, and has fought hard for such increases.

CEB has been a major driver of tourism growth in this country. It has bought down fares making it possible for millions of Filipinos to fly for the first time and made travel to the Philippines affordable for millions of tourists.

We believe the push to increase tourism can be achieved, by allowing both foreign and Philippine carriers equal access to traffic rights. We do not believe it is fair to deny CEB the right to compete.

CEB strongly urges the government to modify EO 29 – to include the basic pre-requisite of reciprocity in any air rights negotiations.

So if the Philippine government puts out the welcome mat for a foreign airline, CEB fully supports that, as long as that foreign airline’s government grants Philippine carriers the same opportunity.

All CEB asks for is reciprocity and a level playing field.