Philippine Airlines (PAL) immediately opposed the terms of the new agreement, however, saying it does not address a major point of concern - that its Taiwanese rivals can "steal" business from it by carrying passengers from Manila to other points via Taipei.
The carrier's president, Avelino Zapanta, said that the airline stood to lose massive amounts of revenue as a result of the accord. He said that as Taiwanese carriers China Airlines and EVA Airways could still carry passengers to the USA via their home base, they would take passengers from PAL on routes it counts as its most profitable.
PAL, which entered receivership in mid-1998 with debts of more than $2 billion, is recovering from near bankruptcy. Many accuse it of encouraging the Philippines Government to protect it by seeking to re-work air services agreements it considers unfair.
The new agreement was signed late in September and effectively re-instated an air services accord signed in 1996 but torn up last year when the Philippine side accused Taiwan's carriers of carrying more passengers than they were entitled to. The country's Civil Aeronautics Board also charged that the agreement was not intended to allow Taiwan's airlines to carry sixth freedom traffic.
In reinstating the agreement, which allows for 9,600 passengers to be carried per week from each side, an annex has been attached stating that airlines can only carry up to 4,800 passengers on the main Taipei-Manila route. Another 1,700 passengers can be carried between Kaohsiung and Manila, while 3,100 can be carried on charters to other points.
It is the second reinstatement of the 1996 agreement since the dispute began last year. Scheduled flights were halted between October 1999 and February this year but resumed following the signing of a tentative agreement.
Flights were halted again in March when the dispute re-erupted. Taiwanis warning that if the spat flares up again, it will be forced to sever air links with the Philippines permanently.
Source: Airline Business
