The Market Monitor Minding the Nation's Business
Flag carrier Philippine Airlines (PAL) has asked the government “to take appropriate measures and initiatives” to convince the government of Kuwait to remove the restrictions it imposed on the carriage of passengers and cargo between Dubai and Kuwait, despite the existence of an air-services agreement with PAL allowing such “fifth freedom” flights.
Fifth Freedom is the freedom to pick up passengers and cargo from a foreign country and carry them to a second country, which is the final destination.
The Philippines retaliated against the Kuwaiti government’s move by suspending Kuwait Airlines’s fifth-freedom rights to bring passengers to Manila via Bangkok, Civil Aeronautics Board (CAB) Executive Director Carmelo Arcilla said.
Arcilla cited the “principle of equal opportunity” in the restrictions imposed on Kuwait’s flag carrier, which has been operating the route for over two decades.
The disagreement had been brewing for some months, Arcilla said.
PAL, however, said the CAB allowed Kuwait Airways to increase its flights to Manila from six to eight weekly, a move that PAL likewise opposed.
PAL launched a four-times -a-week service between Manila and Kuwait (via Dubai) last Jan. 17 to serve the flight needs of Filipinos in that country, utilizing a 414-seater Airbus A330 every Monday, Wednesday, Friday and Sunday.
However, the Directorate General of Civil Aviation (DGCA) of Kuwait only authorized PAL to carry passengers and cargo traveling solely between the Philippines and either Kuwait or Dubai.
Through DGCA, the Kuwaiti government has prevented PAL from exercising its right as a Philippines-designated carrier to avail itself of fifth-freedom traffic rights, PAL said in a statement.
These rights are clearly granted under the Philippines-Kuwait Bilateral Air Services Agreement of 1977, as amended in April 1995 and February 2009.
In an official communiqué addressed to Foreign Affairs Secretary Jose Rene Almendras, PAL President and Chief Operating Officer Jaime J. Bautista urged the Department of Foreign Affairs (DFA) to intervene on the issue through diplomatic means.
“We respectfully request for the support and assistance of the DFA in taking the appropriate measures and initiatives that would help PAL secure the needed Kuwaiti authorization for our Dubai-Kuwait fifth-freedom rights, including diplomatic protests and special representations with the Government of the State of Kuwait, as may be warranted,” Bautista said.
“The DGCA’s disapproval undermines the principle of reciprocity in availing the grant of aviation rights and the commitment to ensure a level playing field among parties in the ASA (Air Services Agreement),” he added.
“It is unfortunate that the Government of the State of Kuwait, through its DGCA, has disallowed PAL from carrying fifth-freedom passenger and cargo traffic between Dubai and Kuwait. Ironically, Kuwait Airways had been freely availing (itself) of fifth-freedom traffic rights between Bangkok and Manila for close to 20 years,” Bautista said.
“We intend to exhaust all available avenues to resolve this issue. We urge the CAB to reconsider any grant of additional rights to Kuwait Airlines, until and unless PAL is granted its basic air rights, as allowed under existing agreements,” PAL Senior Vice President and Legal and General Counsel Siegfried Mison said.
PAL said in its statement that it is urging immediate resolution that will ensure equal opportunity for designated airlines and uphold the integrity of sovereign bilateral agreements.
Kuwait remains an attractive market for local carriers, due to the large number of Filipino workers deployed there and the rest of the Middle East. PAL earlier announced that it launched direct flights between Manila and Kuwait last January. Rival Cebu Pacific launched direct Manila-Kuwait flights in 2014. LUIS LEONCIO