Tourism booster

After six years of waiting, the Philippines was upgraded to Category-1 status by the US Federal Aviation Administration (FAA), meaning Philippine carriers may now expand their operations in the United States and, eventually, boost tourism and businesses between the two countries. The announcement, first made on Twitter by US Ambassador to the Philippines Philip Goldberg, came as a surprise as it had been expected to be made by US President Barack Obama during his state visit later this month.

Flag carrier Philippine Airlines is obviously the main direct beneficiary as it already flies to the United States but is restricted to the West Coast. Apart from adding new routes to the East Coast, the upgrade gives PAL leeway to replace its aging aircraft with newer, fuel-efficient planes like the Boeing 777s, allowing it to save some $160 million in operating costs a year. Budget carrier Cebu Pacific will also benefit in the future when it implements plans to mount flights to US destinations like Hawaii.

The FAA downgraded the Philippines to Category 2 in 2008, saying the country “lacked laws or regulations necessary to oversee air carriers in accordance with minimum international standards.” In a statement last week, the FAA said the restoration of the Philippines to Category-1 status was based on a March review of the Civil Aviation Authority of the Philippines (CAAP), whose current leadership also helped the country exit a European blacklist in July 2013 following its compliance with International Civil Aviation Organization (Icao) standards.

The Department of Transportation and Communications was, of course, quite pleased. “This upgrade cements a landmark era in the Philippine aviation sector.  From one major achievement to another in a span of less than two years, the country has made great strides in enhancing its aviation industry to one that is at par with the best in the world,” said Transportation Secretary Joseph Abaya. He added that the upgrade would open more direct flights to and from the United States, boosting the Philippines’ tourism industry and improving trade relations between the two countries. The Department of Foreign Affairs also welcomed the FAA announcement and predicted more routes opening for business and tourism travel between the Philippines and the United States, and more opportunities for Philippine and American businessmen.

The downgrading in 2008 spurred stringent inspection of the US operations of PAL and barred the flag carrier from expanding its operations in American states and territories. The ruling affected only PAL because it was the sole local carrier that had operations and the capability to fly across the Pacific. Key reforms followed, which led to the dissolution of the Air Transportation Office and its replacement with the CAAP. In 2010, however, the Philippines suffered another setback when the European Union imposed a ban on Philippine carriers, a year after the Icao found “significant safety concerns” in the country’s aviation standards, particularly on the poor state of regulation. No Philippine carrier, however, had been operating in that region for the past several years.

The Aquino administration deserves commendation for working on improving aviation safety. In April 2011, it enlisted the aid of Brig. Gen. Tim Neel, a former FAA executive. In March 2013, the Philippines passed the Icao assessment, which led to the lifting of the EU ban four months later, or on July 12, and PAL was allowed to operate flights to Europe again. The result was the resumption of PAL’s direct flights between Manila and London late last year. The FAA announcement last week also came hours before the EU announcement that Cebu Pacific would also be allowed to fly into European airspace. Lance Gokongwei, CEO of Cebu Air Inc., had told reporters that the airline planned to make an application to the European Union to fly to the continent in November.

This augurs well for the Philippines, particularly the tourism sector. While the direct beneficiaries are PAL and Cebu Pacific, increased access to and from the Philippines via air transport has the effect of boosting tourist arrivals. Now, if we can only speed up the development of key airports in tourist destinations like Palawan and Bohol, as well as in gateways like Clark in the north and Cebu in the Visayas, Philippine aviation will truly soar.