Home » Aviation, Breaking News, Customs & Trade, Ports/Terminals » NAIA congestion keeping PH from signing some ASEAN air transport liberalization pacts

Cebu_PacificThe shortage of landing and takeoff slots and congestion at the Ninoy Aquino International Airport (NAIA) should not stop the Philippines from ratifying some Association of Southeast Asian Nations (ASEAN) agreements that foster air transport liberalization, according to a report.

The ASEAN Services Integration Report, a joint publication by the ASEAN Secretariat and World Bank, said the Philippines “has kept its capital, Manila, restricted and has not ratified MAAS Protocols 5 and 6” because the “government justifies its decision based on the shortage of landing and takeoff slots and overall runway congestion at central Manila’s Ninoy Aquino International Airport (NAIA).”

The MAAS or Multilateral Agreement on Air Services forms part of the ASEAN Air Transport Integration and Liberalization 2005-2015 adopted in 2004 and the Roadmap for Integration of Air Travel Sector (RIATS), the latter aimed at achieving an open skies regime by the target date of 2015.

As of October 2013, all ASEAN member states have ratified all protocols under MAAS, except for the Philippines which is a non-state party to Protocols 5 and 6.

MAAS Protocols 5 and 6 respectively refer to unlimited third and fourth freedom traffic rights between ASEAN capital cities and unlimited fifth freedom traffic rights between ASEAN Capital Cities.

Protocol 1 refers to unlimited third and fourth freedom traffic rights within ASEAN sub-region; Protocol 2, to unlimited fifth freedom traffic rights within ASEAN sub-region; Protocol 3, unlimited third and fourth freedom traffic rights between ASEAN sub-regions; and Protocol 4, unlimited fifth freedom traffic rights between ASEAN sub-regions.

The ASEAN Services Integration Report said while concern over congestion at NAIA is understandable, the attempt to link traffic rights and airport slots is “problematic” and that “these are separate matters that should be kept distinct.”

It noted, “The lack of airport slots should not prevent Member States from ratifying the ASEAN agreements to liberalize market access rights and to signal their support for the ASEAN’s market integration efforts.

“Linking slots to access rights may encourage air rights negotiators to use congestion and lack of slots (which may be within the competence of other government agencies) as pretexts to delay their acceptance of regional agreements.”

The report said MAAS Protocols 1 to 4 are limited in impact and relatively straightforward. “By virtue of their geographic scope, they only deal with market access relaxations designed to spur growth within subregions straddling the Member States’ boundary regions, and the designated points are mainly secondary cities,” it explained.

In terms of air traffic volume and market potential, however, Protocols 5 and 6 have much greater economic significance, since these cover the 10 capital cities and are not limited by subregional proximity. Specifically, Protocol 5 provides contracting states’ designated carriers with unlimited third and fourth freedom opportunities between their own capital city and all the other ASEAN capital cities.

RIATS seeks to fully liberalize air cargo services by 2008 and allow third, fourth, and fifth freedom flights for regional air passenger service providers between designated points within ASEAN sub-regions by 2006, and between ASEAN capital cities by 2010.

The RIATS cover the formal ASEAN agreements on air transport liberalization which, apart from MAAS, includes the Multilateral Agreement for Full Liberalization of Passenger Air Services and Multilateral Agreement for Full Liberalization of Air Freight Services and their implementing protocols.

Multilateral air transport pacts

The ASEAN Services Integration Report said multilateral air transport agreements are helping ASEAN integrate air transport markets better than previous bilateral pacts, and extending further such pacts can lead to greater integration and liberalization.

Compared to other services industries, air services within the region appear to have made more progress toward integration with the signing of multilateral air transport agreements than was earlier achieved with just bilateral pacts, it said.

“Most bilateral routes within ASEAN have now been liberalized by the ASEAN multilateral agreements,” except for routes into and out of member states that have not fully accepted multilateralism and remain governed by bilateral air services agreements (BASAs).

The report noted these multilateral agreements go beyond BASAs on two important aspects: in allowing third, fourth, and fifth freedom rights for air carriers between designated secondary cities and all capital cities of ASEAN member states; and in allowing in principle, instead of substantial ownership and control by the nationals, the “community carrier” concept.

The report said “this means an airline can be substantially owned and effectively controlled by ASEAN interests taken cumulatively or in the aggregate.” The provision also allows airlines to attract capital infusion and management expertise from multiple sources within ASEAN.

Despite progress in air transport integration, the report noted “there is still room for deepening regional integration in certain key respects.”

To achieve a more integrated aviation market, it said ASEAN member states “need to consider further liberalization, such as the seventh freedom (the right to fly between two ASEAN countries while not offering flights to one’s own country), the eighth freedom (the right to fly between two or more airports within an ASEAN country while continuing service to one’s own country), and the ninth freedom (the right to fly inside an ASEAN country without continuing service to one’s own country).” – Roumina Pablo

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