Open Skies?

Lance Gokongwei (president and CEO of Cebu Pacific): Open skies without reciprocity is like Pacquiao with one hand tied.[ Gokongwei: Open Skies without Reciprocity is like Pacquiao Boxing with Left Hand]  This was in response to President Aquino’s signing an Executive Order 29 on “Pocket Open Skies” [Aquino signs ‘open-skies’ orders, finally].  Gokongwei expressed the view of local airlines; but President Noynoy should act on the basis of the advantage such a policy would have for the Philippines as a whole, and not only for the airline industry.

I think that an open skies policy is good for the country, even when it is not reciprocated. Though  it would be probably be better if it was reciprocal. Why will this be good, even if done unilaterally?

Advantages
Increased inbound travelers. Tourists, businessmen etc would come in if a foreign airline opens a line between one of their cities and a provincial destination in the Philippines. The foreign airline is the one who needs to work in order to generate the traffic; after all, it is its own investment. This traffic is new for the most part. For example, imagine a line from Singapore to Caticlan (Boracay). This will generate more passengers for a direct route; at the same time, it may divert some from going to Manila first, and then transferring to a local airline to go to Caticlan. Because many of the new arrivals may not have come without the new direct line, there will be a net gain in tourist arrivals. A reciprocal line from Caticlan to Singapore will not really add too much.

Cheaper Airfares for Filipinos. Increased number of direct flights will mean cheaper airfares – either because of competition, or because shorter routes will be available.

Improved Air Travel Infrastructure. When foreign airlines open routes to provincial destinations, they will most probably use local resources and personnel for passenger processing, cargo handling, even catering. This will help to improve facilities and services at those provincial airports. It can also result in cheaper air transport costs.

Improved transport costs do not only affect passenger travel. Businesses could also benefit from the increased air routes into provincial destinations. Business travel to those places will be cheaper, and transport of goods by air is also facilitated.

Increased Local Travel. A provision in the Open Skies policy states that foreign airlines are not allowed to transport passengers between destinations in the Philippines. The foreign passenger, once in the Philippines, would need to take local transportation to travel within the country. This means that local airlines stand to gain from the increased number of tourists, etc. in the country, since some of them also want to go elsewhere in the country.

Thus, even if unreciprocated, the Philippines stands to gain from Open Skies. If other countries don’t reciprocate, those countries’ nationals would not benefit from the lower airfares, better access, improved airport facilities, higher passenger traffic, etc. that the Philippines will. It would be their loss.

Subsidies
Gokongwei also talked about unfair competition by foreign airlines because these receive subsidies from the government. True, some foreign airlines may receive subsidies. But this would mean that the other country is subsidizing their airline to fly a route into the Philippines. That  country’s taxpayers are thus paying for something which benefits the Philippines. To this, I would say: Thank You.

Effect of Arab Revolt on OFW Remittances

What will be the effect of the Arab Revolt on the remittances of OFWs? Well, in short – VERY LITTLE. And here are a number of reasons why:

Small OF Populations. The revolts have so far been in countries with relatively small OF populations. Tunisia, Libya, Egypt, Yemen and now Syria have few OFs. There were more OFs in Bahrain and Oman, but in Oman’s case the problem seems to have been short-lived. The Bahrain problems have not caused an exodus of OFs. If big protests take place in Saudi Arabia (which has at least 800,000 OFs) it will be only then when we should worry about OF remittances.

OFs Don’t Flee. OFs don’t immediately flee when there is conflict. No Filipinos have left Yemen since their troubles started. In Libya, the majority seem to have decided to stay on, despite the civil war. And when they do flee, they try to get another job in the region. I remember when Kuwait was invaded (in 1990); many of the Pinay domestics there evacuated with their employers to Europe, and they found other jobs there.  OFs don’t want their deployment fees to go to waste; and many also don’t want to abandon their jobs, since this may result in their being blacklisted (or so they fear).

War Premium. OFs who stay on in the middle of conflict may even earn more because of war premiums. During the Iran-Iraq war of (1980-88) many Filipino seamen collected 4 times their regular pay when their ships entered the war zone. Of course, many also died during this war, because many ships were torpedoed, but that’s something else. It seems that nurses in Libya are now earning 3 times their normal pay because of the war.

Post-revolution Boom. After the revolution – whether or not the revolution wins – economic development seems to favor the hiring of more OFs. If the tourism industry is stimulated, this would mean more Hotel/Restaurant workers would be needed – and this almost certainly would include Filipinos. If health care services would be expanded, this would mean employment for Filipino nurses. If a construction boom ensues, they would need Filipino construction workers.

Locals Work for Government. In the Gulf, local workers aspire to work for the government; leaving the bulk of private sector jobs to migrants of all kinds. A lot of these migrants come from non-Gulf countries like Egypt, Jordan or Lebanon; but they also include workers from places like the Philippines. Filipinos will always find work in the private sector there, since we are known to be good workers. Some companies even advertise the fact that they have Filipino workers – putting up signs saying that “We have Filipino workers”. Filipinos are the last to be laid off, and the first to get hired. Our place is assured.