Sep 202014
 

http://wikileaks.org/cable/2008/07/08MANILA1618.html#
Reference ID Created Released Classification Origin
08MANILA1618
2008-07-09 09:04
2011-08-30 01:44
UNCLASSIFIED
Embassy Manila

UNCLAS MANILA 01618
CXMANSVR:
ACTION: ECON
INFO: LEGATT DEA DAO NCIS PAS CHRON DCM POL RA FCS
ADFC FAS CONGEN MGT CUSTOMS AMB AID ADB

DISSEMINATION: ECON
CHARGE: PROG

APPROVED: ECON:LLMEMMOTT
DRAFTED: ECON:GCOFFIN, JBAIRA
CLEARED: ECON:TNEELY

VZCZCMLI001
OO RUEHC RULSDMK RUEHZS RUEHKO RUEHUL RUEHBJ
RUEHBY
DE RUEHML #1618/01 1910904
ZNR UUUUU ZZH
O 090904Z JUL 08
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1212
INFO RULSDMK/DEPT OF TRANSPORTATION WASHDC IMMEDIATE
RUEHKO/AMEMBASSY TOKYO IMMEDIATE 3569
RUEHUL/AMEMBASSY SEOUL IMMEDIATE 2826
RUEHBJ/AMEMBASSY BEIJING IMMEDIATE 6409
RUEHBY/AMEMBASSY CANBERRA IMMEDIATE 9835
RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
UNCLAS SECTION 01 OF 02 MANILA 001618

STATE FOR EAP/MTS
TRANSPORTATION FOR FAA
SINGAPORE AND TOKYO FOR FAA

E.O. 12958: N/A
TAGS: EAIR ETRD BEXP RP
SUBJECT: Philippines Weighs Open Skies Options

REF: Manila 01653

¶1. (SBU) Summary: Philippine Transportation and Communication
Secretary Leandro Mendoza has announced that the ASEAN Open Skies
agreement that ASEAN transportation ministers will sign in Manila in
December will obviate the need for the proposed executive order to
provide a “pocket open-skies” regime to Clark and Subic (see
reftel). However, officials and business people at Clark strongly
disagree and are still pressing for Philippine President Arroyo to
sign the executive order in order to attract more tourism to the
Philippines and enable the development of Clark as an aviation hub
for Southeast Asia. We find ways to discretely support their
efforts. End Summary.

Open Skies With The Ten Original ASEAN, Plus Four
——————————————— —–

¶2. (U) Philippine Transportation and Communication Secretary Leandro
Mendoza announced recently that he expects ASEAN transportation
ministers will sign an agreement on open skies among the ten
original ASEAN members (Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, Philippines, Thailand, Singapore, and Vietnam) in Manila in
December 2008. The agreement would immediately grant airlines of
these 10 ASEAN member countries bilateral traffic rights (freedoms
1-4, in civair parlance) among their capital cities. Addition of
the right to carry out connecting flights (fifth freedom) between
capital cities would have a target date of December 2010. According
to Mendoza, ASEAN’s adoption of an open skies policy would lead to
creation of a single aviation market throughout East Asia by 2015.
He estimated that the agreement could generate 500 million tourist
trips within the region, including an estimated 10 million tourist
arrivals to the Philippines. China, Japan, India and South Korea
have reportedly expressed interest in joining the ASEAN Open Skies
agreement.

Clark As Part Of The Capital City
———————————

¶3. (U) In preparation for ASEAN Open Skies, Secretary Mendoza said,
the Diosdado Macapagal International Airport (DMIA – formerly Clark
Field) will be designated the Philippine capital airport. The
airport has a parallel runway system that can handle the world’s
heaviest planes, including the Antonov AN225 and the Airbus A380.
Mendoza said that the designation of DMIA follows a regional trend
to relocate international airports outside of the capital region.
(DMIA is located eighty-five kilometers northwest of Manila
proper).

ASEAN Open Skies and E.O. 500-B
——————————-

¶4. (U) Although Secretary Mendoza publicly stated that the ASEAN
Open Skies agreement would obviate the need for the Executive Order
500-B, the Clark and Subic stakeholders are not ending their fight
for a more liberal aviation policy for their airports. They sent a
second appeal letter in May 2008 to President Arroyo pointing out
the benefits of the proposed E500-B policy for users, businesses,
employment and income opportunities in Clark, Pampanga, Central
Luzon and the country. The ASEAN Open Skies agreement would not
have the same impact, since it is limited to the ASEAN countries and
it does not initially provide for connecting flights. They believe
that connecting flights are essential for the transformation of
developmental routes, like Clark and Subic, into major gateways.
The ability to schedule connecting flights opens up the possibility
that airlines of other countries would use Clark as a hub for their
East Asian operations. Proponents also point out that Executive
Order 500-B would not prevent the Philippines from pursuing greater
liberalization under unilateral, bilateral or multilateral
negotiations, and so would complement the ASEAN agreement.

Opposing Competition
——————–

¶5. (U) Philippine Airlines leads domestic opposition to any type of
open skies agreement. In addition to outspoken opposition to
Executive Order 500-B, Philippine Airlines’ President has expressed
concern about competing with airlines from other ASEAN countries in
ASEAN Open Skies, since some foreign airlines are state-owned and
have strong governmental backing. Philippine Airlines argues that
there is a need to establish safeguards against market distortions
and anti-competitive practices by subsidized airlines.

Comment: Why We Care
———————

¶6. (SBU) The USG has discretely supported open skies in the
Philippines for many years. We support further liberalization of
routes to the U.S., as we do everywhere. We also support
liberalization of regional routes in order to increase tourism and
trade and help the Philippine economy to grow more quickly and
create more jobs. Philippine economists estimate that one tourist
arrival here translates into one job for a year. Given the
underdeveloped tourism potential of the Philippines and the
increasing wealth of neighboring countries, reduction of currently
high airfares via more competition could make an enormous
difference. We nonetheless keep our support for liberalization
discrete, working with Philippine proponents of liberalization, in
order not to arouse nationalist resistance.
KENNEY

   

 

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