Pocket Open Skies Policy in the Subic Bay Freeport

The open skies policy, while an old issue, has once again hugged the newspaper headlines, particularly because of the labor unrest in the country’s flag carrier—the Philippine Airlines.

Executive Order 253, issued by former President Gloria Macapagal-Arroyo in 2003, granted additional traffic rights to accelerate the development of the both the Subic Bay International Airport and the Clark Airport as major cargo hubs for the Asia-Pacific region. EOs 500 and 500A, on the other hand, granted passenger service rights to both airports with certain limitations. The limitations, particularly on connecting flights, are the reasons carriers have not taken advantage of the new rules.

The current media buzz on open skies seeks to grant open skies policy on many more airports. A nation-wide open skies policy may not be perfectly good for the country since it might put out of business our local carriers, especially if the policy is not reciprocal with other countries. I think, however, that having it in the Subic Freeport will invigorate the Subic Airport. A letter to President Aquino was, therefore, crafted and sent last November 8 (see below). Coincidentally, one week later, President Aquino announced that he will open up the Philippine skies during the opening of the public-private partnerships and infrastructure conference.

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November 8, 2010

PRESIDENT BENIGNO S. AQUINO III
Malacañang Palace
JP Laurel Street, San Miguel
Manila, NCR 1005, Philippines

Subj: Support for Pocket Open Skies Policy in the Subic Bay Freeport

Dear President Aquino,

The Subic Bay Freeport Chamber of Commerce (SBFCC) fully supports, and endorses, a pocket open skies policy for the Subic Bay Freeport Zone (SBFZ).

Since FedEx’s AsiaOne hub discontinued its operations in the SBFZ and transferred to China almost two years ago, the Subic Bay International Airport (SBIA) became under-utilized and almost dormant. Even while the SBFCC formed the Subic Airport Revival Committee and collaborated with the Subic Bay Metropolitan Authority (SBMA) and many other organizations, our progress has been slow partly because of limited rights of budget carriers. The SBMA, on the other hand, continues to service the debt incurred from the airport’s modernization. By providing for a more liberalized air space, we would undoubtedly reinvigorate the SBIA faster.

While Executive Orders 253, 500, and 500A granted rights to foreign carriers operating at the DMIA and SBIA, the limitation on designated carriers and withdrawal of the 5th freedom right— the right to fly between two foreign countries, more popularly known as “connecting flights”—hampered the SBIA’s progress from taking off once more.

While there have been moves already in the House of Representatives to promote pocket open skies policy for secondary gateways including Subic, the SBFCC feels that an executive order amending EO 500A, previously issued by former President Gloria Macapagal-Arroyo, would be the quickest way to revive the Subic Bay International Airport.

The SBFZ is one of the major growth areas in Philippine tourism. Liberalizing our air space will enhance access to Subic Bay and surrounding destinations. We are a Freeport after all. Coupled with budget fares, this will certainly spur an increase in international and local tourist arrivals.

The Subic Bay Freeport Chamber of Commerce, representing the businesses, residents, and other stakeholders inside the SBFZ, supports your Excellency’s administration. We hope that by bringing to your attention our sentiments, by providing suggestions, by demonstrating our willingness to work with you, we can together bring the Subic Bay Freeport’s economic prosperity to greater heights.

Yours truly,

[signed]

Prof. DANNY J. PIANO
SBFCC President