OPEN SKIES AGREEMENT

OPEN SKIES POLICY

OPEN SKIES POLICY IN THE PHILIPPINES

ECONOMIC BENEFITS

ADVANTAGES & DISADVANTAGES

Open Skies

International agreement between 2 or more countries allowing passenger and cargo to flyover an area without restrictions

Aims to promote: Free market competition Cooperative marketing arrangements Competitive pricing

Some countries with Open Skies Policy

E.O No. 219 (3 Jan 1995)“The exchange of traffic rights and routes with other countries shall be based on (a) the National Interest which shall include value for the Philippines in terms of promoting international trade, foreign investments and tourism, among others, and on (b) the reciprocity between the Philippines and other countries . Reciprocity shall be interpreted to mean the exchange of rights, freedoms and opportunities of equal or equivalent value. The Civil Aeronautics Board (CAB) shall determine “national interest” taking into consideration the larger interest of the country, especially the users of air services”Limits coverage to major airports

(Ninoy Aquino International Airport)

E.O No. 500-A (22 Aug 2006)

“Any provision of Executive Order No. 219 (Series of 1995) Executive Order 32, (Series of 2001) and related issuance to the contrary notwithstanding, the Civil Aeronautics Board (CAB) shall process within thirty(30) days from receipt all application services to DMIA and SBIA, in accordance with the CAB’s current and applicable rules regulations and procedures.”Grant of unlimited 3rd and 4th freedom rights to

foreign air carriers operating in the Diosdado Macapagal International Airport (DMIA) and the Subic Bay International Airport (SBIA)

E.O. No. 29 (14 Mar 2011)

“In the negotiation of the ASAs, the Philippines Air Panels may offer and promote third, fourth, and fifth freedom rights to the country’s airports other than the Ninoy Aquino Internationa; Airport (NAIA) without restriction as to frequency , capacity and type of aircraft, and other arrangements that will serve the national interest as may be determined by the CAB”

•Foreign carriers may now fly/operate in any airport In the country.•Prohibits “cabotage”

FREEDOMS OF THE AIR First - the right to fly over a foreign country,

without landing there Second - the right to refuel or carry out

maintenance in a foreign country on the way to another country

Third - the right to fly from one's own country to another

Fourth - the right to fly from another country to one's own

Fifth - the right to fly between two foreign countries during flights while the flight originates or ends in one's own country

Economic BenefitsTOURISMTRADEEMPLOYMENTINVESTMENTS

Advantages & Disadvantages With less government

regulation on commercial aviation, theoretically, there should be more flights available as more foreign (and local airlines) can participate. More flight choices, should mean cheaper cost for the air travelling public.

With easier & more convenient access to popular tourist destinations, the number of visitors should rise. This brings additional revenue to local businesses and should help the economies of these areas.

With the opening up of new international gateways in the Philippines, there is an increased risk in security & potential entry points for illicit activity from abroad.

With the de-regulation of commercial aviation, there will be more competition for the local airline industry from overseas, which may lead to some local carriers to fold. This is not necessarily bad for the consumer, as more competition provides better choices, though not necessarily better service.