Home' Asian Aviation : AAV April 2010 Contents AsianAviation | APRIL 2010 29
In mid-January, the government of the
Philippines said it would in April become the
latest country to sign an open skies agreement
with other members of the Association of
South-East Asian Nations (ASEAN).
e government said the deal would lead to
a dramatic increase in tourism in the country. Tourism
Secretary Ace Durano explained that the agreement
would encourage more airlines to operate to the country
by removing certain tari s and surcharges, o ering
more options for travellers, while also stimulating trade.
"We are taking positive steps towards the signing of
the agreement, as the bene ts of air space liberalisation
for the country signal a region-wide increase in
cooperation and tourism activity," Durano said. " e
sealing of this deal strengthens not only tourism, but
more so economic relations between the country and
out ASEAN counterparts."
e agreement will allow airlines unlimited ights
between the ASEAN nations' 10 capital cities. e
Philippines Department of Tourism (DoT) admitted
that the country has been late in liberalising its airline
"Our neighbours in the region have seen the
bene ts of the open skies agreement and we hope to
replicate the same success here in the country," said
DoT undersecretary Eduardo Jarque. Singapore and
Malaysia, among the rst ASEAN nations to liberalise,
have experienced healthy growth in tourism in recent
years, he added.
A er Europe implemented open skies in 1997,
air travel in the region surged by an additional 44
million passengers by 2006, according to the Paci c
Association of Travel Agents (PATA), with air travel
and related industries generating US$85 billion in
economic growth in the same period.
e history of ASEAN's moves towards open skies
dates back to a 2003 framework agreement, which
included phased plans for liberalisation of intra-
ASEAN cargo and passenger services by 2008 and
e plan was hampered by domestic protectionism
and ASEAN's generally slack implementation
of associated free-trade agreements. The group's
ministerial body does not have the power to enforce
joint decisions by imposing penalties for failure to
Further problems arose because of signi cant gaps
in economic development and air tra c capacity
between the group's members, which include Brunei,
Cambodia, Indonesia, Laos, Malaysia, Myanmar, the
Philippines, Singapore, ailand and Vietnam. Some
members also took longer than others to appreciate the
potential bene ts of aviation liberalisation.
Malaysia, for example, stuck to a strictly closed
aviation policy for decades. Once it relaxed regulation,
however, the country saw a boom in air tra c with the
founding of what has become the region's biggest and
most successful low-cost carrier (LCC): AirAsia.
PATA says growth in Malaysian domestic and
international passenger traffic accelerated quickly
a er AirAsia entered the market in 2004, with tra c
to ailand alone ballooning at 37 percent a year.
AirAsia blazed a trail for a number of other low-cost
carriers across the region, notably in Indonesia and
ailand, where the domestic air transport markets
had long been dominated by monopolistic national
carriers. Analysts argued that the next logical step
would be for the governments in the region to open
their markets up to more foreign competition.
After Malaysia and Thailand agreed to allow
AirAsia to operate internationally between them, both
countries gained economic bene ts of about US$114
million a year, analysts say.
More recently, signi cant liberalisation moves have
been made by various ASEAN governments. Early
last year, Indonesia and Singapore reached a new air
ser vices agreement that li ed protectionist restrictions
blocking budget carriers from a number of routes.
Indonesia had been preventing Singaporean LCCs
from operating to Denpasar on the tourist island of
Bali, Jakarta, Medan and Surabaya. e government
made no pretence that the restrictions were there for
any reason but to protect ag-carrier Garuda Indonesia
from new competitors.
e li ing of those restrictions was seen by many
as a key test of ASEAN nations' sincerity in wanting
to liberalise aviation regulation. e new agreement
allowed Singapore's Tiger Airways to begin ights to
Jakarta, while AirAsia's Indonesia AirAsia a liate can
now operate to Singapore from Denpasar, Bandung,
Jakarta and Yogyakarta.
Just a few months later, Singapore and Malaysia
announced a more liberal air ser vices agreement,
opening up key routes such as Singapore to Penang and
Langkawi to new competition. ose routes had long
been operated as a duopoly by the countries' respective
Both these liberalised agreements followed the
November 2008 rming up by the ASEAN members
of the long-standing for full liberalisation by 2015.
e transport ministers of the group's 10 member
nations met in Manila at the time to sign liberalisation
agreements under the Road-Map for Integration of the
Air Travel Sector (RIATS) -- a plan that was adopted
in principle back in November 2004.
At the time, it was stressed that individual nations
still needed to ratify the agreements, which could
take some time. e latest announcement from the
Philippines comes as an encouraging sign that progress
is indeed being made. ●
Philippines to sign
ASEAN Open Skies pact
Progress towards full open-skies liberalisation between the 10 members of ASEAN has been slow and faltering at
times -- but it is continuing, writes Andrzej Jeziorski.
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