Pal Calls For Asean Governments

[peter991]

PAL calls for ASEAN governments to scrap airline subsidies

Philippine Airlines (PAL) is inviting governments from ASEAN countries to consider abolishing all forms of subsidies before the airline industry is fully liberalised next year, as reported by the Daily Manila Shimbun.

With the exception of PAL, ASEAN flag carriers are either fully or partially subsidised by their governments. This includes Singapore Airlines, Thai Airways International and Malaysian Airlines.

“If ASEAN wants to liberalise the airline industry to encourage tourism growth, governments must first withdraw all subsidies to their flag carriers for the sake of air competition,” the PAL Vice President for Marketing Support, Felix Cruz said in a statement.

Cruz believes PAL is ready to compete – especially given its track record of strong profitability without any help from the national government. In fact, the 2006-07 fiscal year was the company’s third profitable year in a row, with reported profits of US$140.3 million.

At the same time, Cruz believes that the operating environment should be fair and equal when the ‘open skies’ agreement takes effect in 2008. If a free market is to be established in the region, Cruz said that governments should level out the playing field and cease subsidies as they stifle competition and create undue advantage.

According to the Daily Manila Shimbun, PAL has submitted its position to the Philippine government for proposal to other ASEAN governments as they finalise negotiations for regional multilateral air traffic rights.

Peter

1) Does anybody know how much the Thai government is subsiding Thai Airways each year?

2) The 'open skies' agreement - which takes effect from next year ... when? What does it mean for travellers? Total deregulation of all air routes?