RP carriers to suffer from FAA downgrade

The Philippine Star –
The decision of a United States aviation watchdog to downgrade the Philippines’ rating in terms of compliance with international aviation safety standards would adversely affect Philippine Airlines (PAL)’s operations in the US, the flag carrier’s biggest revenue earner.

PAL said the aviation safety compliance rating downgrade would also affect tourism, cargo traffic flow between the US and the Philippines, as well as the current investment inflow into the country.

“Aside from withholding PAL’s expansion plans to the US, the Category 2 rating is also expected to gravely affect inbound and outbound tourism traffic including the balikbayan traffic that is PAL’s niche market, RP-US cargo traffic and investments inflow to the Philippines,” PAL president Jaime Bautista said.

PAL, however, said the country’s flag carrier would continue to fly to the US despite the downgrade of the Philippines’ rating from Category 1 to Category 2 by the US Federal Aviation Administration (FAA).

But PAL said the downgrade will prevent them from increasing flights to the US and its territories from the current 33 a week.

“We lament FAA’s decision. We will do everything we can so our loyal trans-Pacific passengers will not be inconvenienced by any effects of Category 2,” Bautista said.

“Being the only Philippine carrier to fly to the US, we have a responsibility to our passengers to maintain our US operations in spite of the Category 2 rating,” he said.

Under Category 2, PAL will be prevented from changing the type or increasing the number of aircraft used on its US routes.

The downgrade will also affect the delivery of PAL’s six brand-new Boeing 777-300ER airplanes next year. The planes were recently purchased by PAL for its planned US expansion and upgrading operations.

PAL said the downgrade will force them to forgo their plans for additional flights to San Diego, California, New York and Saipan.

PAL currently flies to Los Angeles 11 times a week; San Francisco, nine flights a week; Las Vegas via Vancouver, five flights a week; Honolulu, three flights a week and Guam, five flights a week.

Bautista urged the government to exert efforts to regain the country’s Category 1 rating.

“We hope the ATO (Air Transportation Office) will soon be able to rectify the assessed deficiencies in its air safety oversight functions so the country can revert to Category 1,” Bautista said.

Left to blame

Sen. Joker Arroyo said the country’s aviation officials should be blamed for the downgrade.

Arroyo warned the development will also force Congress to review the country’s aviation standards to avoid further embarrassment.

“Were our civil aviation authorities aware of the impending downgrade and yet the executive did not do anything to address FAA’s concerns? Why did the executive not inform Congress of the need for remedial legislation?” Arroyo asked.

“For one thing, during the current budget hearings, none of the government agencies involved in aviation asked for additional budget that they needed to meet FAA’s warnings. There was complete silence on the safety issues. Congress passed the budget they asked for,” he said.

According to Arroyo, he did not vote for the bill seeking to create the Civil Aviation Authority (CAA) during deliberations on the measure in the Senate.

Arroyo even suspected the bill was meant to forestall the FAA downgrade.

“Or is it just a ruse so that another public corporation can be created that will collect its own revenues and spend it as it seems fit, without need to remit its income to the national treasury?” Arroyo argued.

“What is this? When the Senate was deliberating House Bill No. 3156 for concurrence creating the Civil Aviation Authority… the battle cry was that if the Senate did not pass it, the US Federal Aviation Administration would downgrade the Philippines’ Category A rating,” Arroyo claimed.

Arroyo noted the bill allows airport operations to be controlled by two independent government corporations, the existing Manila International Airport Authority (MIAA) and the proposed CAA, which can impose its own fees and collect and disburse revenues without government intervention.

Senators Edgardo Angara and Juan Ponce Enrile, however, proposed the passage of a bill creating the CAA as a single, centralized and autonomous civil aviation authority in the Philippines.

Angara stressed the need to create the CAA after US aviation officials presented their serious concerns over ATO’s inability to conduct consistent, effective safety oversight.

The ATO failed to meet the standards set by the International Civil Aviation Organization (ICAO), Angara said, particularly the minimum standards set by the Convention on International Civil Aviation.

This convention requires a centralized civil aviation authority, already established in many countries, Angara explained.

Angara had warned the country’s civil aviation system would be downgraded if the concerns would not be addressed.

He said aviation systems of a country placed in a Category 2 status will be subjected to heightened FAA surveillance and will not be allowed to expand or change its services in the US.

The FAA had informed the Philippine government it has “serious concerns” about its oversight of air operations, which it said are not in compliance with ICAO safety standards.

The Philippines became the 20th country in the world to be placed in Category 2 rating.

The FAA said the Category 2 rating means that the country lacks laws or regulations necessary to support the certification and oversight of air carriers in accordance with minimum international standards.

It also lacks the technical expertise, resources, and organization to license air operations, does not have adequately trained and qualified technical personnel and does not provide adequate inspector guidance to ensure enforcement of minimum standards.

FAA rules stipulate that airlines from the Philippines cannot expand services to the United States while it carries a Category 2 rating.

“While in Category 2, Philippine air carriers will be permitted to continue current operations to the United States, but will be under heightened FAA surveillance,” the FAA said in a statement through the US Embassy in Manila.

In a warden message, the embassy advised US citizens traveling to and from the Philippines to use carriers from countries “whose civil aviation authorities meet international aviation safety standards for the oversight of their air carrier operations under the FAA’s International Aviation Safety Assessment (IASA) program.”

Transportation Secretary Leandro Mendoza ordered ATO chief Daniel Dimagiba to “immediately evaluate, review, and undertake measures and course of action to ensure compliance with the audit results and recommendations of the FAA.”

Mendoza also ordered ATO to “immediately make the rectifications of the deficiencies identified in the International Aviation Safety Assessment conducted by the FAA in a bid to have the downgrade (from Category 1 to Category 2) lifted.”

Mendoza also appealed to Congress to approve the CAA bill.

Dimagiba added the only way for the government to secure more funds for safety and maintenance of aircraft was for President Arroyo to sign the CAA bill into law.

The bill was approved by the House of Representatives in December but cannot be implemented until it is signed by Mrs. Arroyo.

Malacañang officials were not immediately available for comment.


Bautista, on the other hand, said the downgrade will force PAL to “wetlease” an aircraft from an airline coming from a Category 1 country, as the carrier did back in the 1990s in the effort to add a flight route.

Under a wetlease agreement, PAL will be charged for the use of another carrier’s aircraft, its crew, maintenance and insurance costs.

Bautista stressed PAL had always adhered to international aviation safety standards being the only Philippine carrier to pass the strict IATA (International Air Transport Association) Operational Safety Audit (IOSA).

He explained the IOSA is an international evaluation system designed to assess operational management and control system of an airline.

Bautista said that PAL’s airplanes are maintained by Lufthansa Technik Philippines, an affiliate of the world’s largest maintenance service provider Lufthansa Technik of Germany.

On the other hand, Cebu Pacific Airways (CEB), the country’s second largest carrier, admitted the FAA downgrade will not affect their domestic operations.

Cebu Pacific, controlled by the JG Summit conglomerate of tycoon John Gokongwei, currently has no flights servicing the US.

CEB though joined PAL in calling for the government to take steps in regaining the Category 1 rating.

“We are confident that our government will do all possible to revert the Philippines’ standing back to category 1 as quickly as possible, seeing that the US is an important market for the Philippines,” said Candice Iyog, CEB corporate communications chief. With Mary Ann Reyes, Aurea Calica, Pia Lee-Brago, AP

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