Monday, November 03, 2014 Airline News 2 comments
As part of efforts to increase tourism and further develop international air travel with foreign nations, the Philippines has signed new air service agreements with Malaysia, Hong Kong, and Ethiopia, creating new opportunities for air carriers to launch more flights between the respective countries.
Most recently, an agreement was inked between the Philippines and Malaysia after months of delays. Talks between the two countries were originally scheduled for April 2014, but had to be postponed after the disappearance of Malaysia Airlines Flight MH370. Talks were cancelled for a second time in August after another Malaysia Airlines jet crashed over the Ukraine after being shot down.
Under the new agreement, the two countries have agreed to double capacity between Manila and Kuala Lumpur from 4,820 seats weekly to 9,640. According to Carmello Arcilla, Executive Director of the Civil Aeronautics Board, the new agreement is designed to meet the growing demand between Kuala Lumpur and Manila. In addition, unlimited traffic rights have been granted between all points in the two countries with the exception of Manila. The unlimited rights represents a significant increase over the 2,000 seat weekly restriction that was previously imposed.
Arcilla added that the new agreement with Malaysia replaces the last one signed in 2011. "The new agreement will allow our airlines to expand on the routes between the Philippines and Malaysia, especially since the market continues to grow and our airlines have been fully utilizing their entitlements," said Arcilla.
AirAsia Zest is one carrier that has been building demand between the two cities as it feeds traffic in to its parent company's main hub in Kuala Lumpur from a number of Philippines cities including Manila, Clark, Kalibo, and Cebu. The budget carrier is presently operating beyond the limits permitted in the 2011 agreement. However, temporary rights were granted to permit AirAsia to fly more passengers to Malaysia.
Meanwhile, Hong Kong and the Philippines finally inked a new agreement after months of lobbying from local carriers. The new air pact significantly increases the number of flights between the two countries allowing 30,000 seats per week, which is double the old allocation of just 15,000 seats. Tensions have been high in recent years between the two nations over the 2010 Manila Bus Hostage Crisis.
"It is hoped that the new agreement will usher in a new era of growth in the bilateral aviation relationship between the Philippines and Hong Kong, especially that the irritants that stood in the way of growth have simmered down," said Arcilla. In addition, the countries have agreed to unlimited rights to Hong Kong for all Philippine gateways outside of Metro Manila. This could play a significant role at airports such as Clark International Airport that was previously restricted to 4,300 seats weekly.
Cebu Pacific intends to take advantage of the new agreement after the nation's largest budget carrier advocated for several months for increased capacity to Hong Kong. "We are definitely interested in increasing flights to Hong Kong and will make the necessary filings with the Civil Aeronautics Board," said Jorenz Tanada, Cebu Pacific's Vice President for Corporate Affairs.
Outside of Asia, the Philippines also signed a new agreement with Ethiopia in an effort to strengthen ties between the nation and the African continent. Under the new agreement, seven weekly flight entitlements have been granted between Addis Ababa and Manila. Unlimited rights have been granted for all points in Ethiopia and the Philippines outside of Manila.
The new agreement with Ethiopia also allows for intermediate stops in Bangkok, Singapore, India, Ho Chi Minh, and the Middle East. Ethiopia's national flag carrier, Ethiopian Airlines, has long planned flights to Manila. However, challenges in obtaining slots at Ninoy Aquino International Airport and issues with the carrier's fleet of 787 aircraft have consistently delayed the plans, as the carrier focuses on established profitable markets.
Ethiopian Airlines recently filed an application with the Civil Aeronautics Board to operate flights from Addis Ababa to Manila via Hong Kong. The new flights would be operated by Boeing 767 aircraft three times weekly. Due to restrictions in slot times at Ninoy Aquino International Airport, the airline was forced to resubmit its application with an intermediate stop in Singapore or Bangkok in order to accommodate the different scheduling necessary to land at NAIA.
Fifth freedom rights were also granted to Ethiopian Airlines for stops in Bangkok and Singapore as the traffic between the Philippines and Ethiopia is small. Although Hong Kong was requested for fifth freedom rights, they were not granted by the Chinese government. According to the Civil Aeronautics Board, the revised schedule that Ethiopian Airlines has proposed for its three weekly flights to Manila has been approved and the carrier may launch flights at any time. It is believed that the carrier will be using Terminal 1 once flights begin.
Meanwhile, Cebu Pacific requested the permission of the Civil Aeronautics Board to be designated as the official Philippine carrier to Ethiopia. Both Cebu Pacific and Philippine Airlines will study the viability of introducing Ethiopia as a destination in the future. Although neither carrier has any plans to serve Ethiopia any time soon, it is possible that the market may initially be served through code-sharing agreements with Ethiopian Airlines. Ethiopia is considered the aviation hub for Northeast Africa, while Ethiopian Airlines is the largest carrier in Africa.
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