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MANILA -- Away from the hustle and bustle of political maneuverings, crucifixion and what have you, is the concern of the long-lingering FAA downgrading of Philippine aviation from Category 1 to Category 2.
So goes our lead paragraph last week where we tackled a topic on veritable aviation and tourism revenue losses in billions of much-needed cash that could feed and provide basic services to millions of our less fortunate brothers and sisters.
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Correct, the group said PH has now racked up more than P66.30 billion in tourism revenues simply because of that C2 downgrade.
And that figure, the group said, comes from the United States market alone because of our dear Philippines’s Category 2 status.
Aileen Clemente, president of the Philippine Travel Agencies Association (PTAA), said PH's Category 2 status is delaying expansion of routes by local airlines to the US and other countries.
A good example to this is no other than Cebu Pacific whose plans of spreading its wings further to the USA remain in the back burner because of C2.
C2 really denies the country of additional tourist arrivals from North America (read: zero tourism revenues), observers aver.
This, they said, must be studied, reviewed by the Aquino Administration as soon as possible, spearheaded by no other than brand-new DOTC Secretary and close P-Noy ally Mar Roxas.
The CAAP is a line agency of the DOTC.
Of course, there is no need explaining it as the former Senator and DTI Secretary knows the economic effects of FAA’s C2 as he knows Philippine economy better that anybody else.
Again, without further explanation, C2 also resulted into Europe’s banning against Philippine air carriers’ entering into their radars notwithstanding the telltale unfavorable travel advisory to the Philippines.
Indeed, according a foreign aviation expert who requested anonymity, the operational ban issued by the European Union against Philippine Air Carriers has significant consequences for the economy.
As it was mentioned by the PTAA, one side effect of the ban is that tourists from EU countries would not be able to get travel insurance when travelling on any Philippine carrier for inter-island travel.
Aside from Philippine air carriers being banned from flying to Europe, European citizens are likewise advised and discouraged by their countries from travelling into the Philippines since the safety rating of our aviation industry has tremendous implications on their life insurance policies.
In other words, travel aboard a Philippine aircraft is an uninsurable risk for any European citizen. A logical consequence of this would be that European tourists would opt to go to neighboring Asean countries that offer similar tropical conditions for their recreational activities.
It’s also worth mentioning about the limitations on air traffic expansion for Philippine Air Carriers to the United States and its consequential impact to the local labor force.
Clearly therefore, the C2 Rating has a significant impact on the business operations, labor and profitability of any Philippine air carrier.
Plans of Cebu Pacific in expanding to the United States are likewise put on hold which therefore limits its ability to increase operations, generate more jobs and have greater revenue which redounds to the benefit of the country.
Erosion of investor confidence
At the outset, the Category 2 Rating and operational ban of Europe had influenced Saudi Arabia, Japan, South Korea and Australia to impose similar restrictions against the Philippines.
It was only through diplomatic channels and negotiations that the Civil Aviations Authority of the Philippines (CAAP) was able to avert the actions of such states from likewise banning Philippine air carriers in their respective jurisdictions.
The recent political movements at CAAP through the insertion of political appointees accordingly threatened and undermined the legal framework and professional processes of CAAP which should be an independent safety regulator.
The same source added that these controversies have “exacerbated the problems of C2 since it resulted in the postponement of the International Civil Aviation Organization audit that would have resulted into the reinstatement of the Philippines to Category 1.”
“The Category 2 rating is a strong message against the state of the aviation industry which therefore discourages economic growth and investor confidence. The continued derogatory status of the Philippines and its failure to achieve Category 1 may lead to other countries following the initiative of the European Union and ban Philippine carriers due to safety considerations,” the source said.
It was way back January 14, 2008 that a newspaper report came about the US’s Federal Aviation Administration downgraded to the Philippines to C2 quoting a statement from FAA’s website as “unsafe port of origin.”
Countries under C1 are those compliant with aviation safety standards of the ICAO. Failure to meet its stringent standards automatically nets C2 rating.
Other countries with C2 ratings are Bangladesh, Cote Dâvoire, Ghana, Guyana, Indonesia, Ukraine, Serbia and Montenegro (formerly Yugoslavia) and Nauru.
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