BY WAYNE CHARGUALAF
Two airlines are putting their issues on paper in a tussle that may benefit Guam travelers. United Airlines objected to a code-sharing agreement between Philippine Airlines and Air Philippines Corp. — which does business as PAL Express — for service between Guam and Manila, Philippines, that is scheduled to begin March 2020, according to a Nov. 15 complaint filed with the U.S. Department of Transportation
A code-sharing agreement is an arrangement where two airlines share the same prefix — or code — for flight numbers. For instance, Philippine Airlines may fly customers along the first leg of a trip, and PAL Express would take those same customers along the last leg of the trip. Under a code-sharing agreement, the flight number for both legs would use the Philippine Airlines two-letter code, which is “PR.” Code-sharing agreements are usually used to leverage the marketing resources and brand recognition of one partner and the logistical capabilities and resources of the other partner.
Air Philippines Corp. is named as the applicant on its Nov. 6 application for a statement of authorization to enter a code-sharing agreement that was submitted to DOT. Although United Airlines in its complaint said that it is “not opposed in principle to [Air Philippines’] requested authority,” it objects to the application because Air Philippines, “seeks benefits that are currently being denied to United and its customer base.”
To support this argument, United said it has been refused slots and access to infrastructure at the Ninoy Aquino International Airport — formerly known as the Manila International Airport — necessary to expand in the region, while Philippine Airlines has increased its service to the U.S., to include increasing flights from Manila to the U.S. by 25%, seats by 30% and available seat miles by 35%. Philippine Airlines also launched its New York to Manila service in 2018.
United claimed in its complaint that this is proof the Philippine government is favoring Philippine Airlines and is violating the terms of a bilateral 1982 Air Transport Agreement that promises to take all appropriate action to ensure fair competition among airlines. The airline stated, “United believes the government of the Philippines can and should do more to support United’s pro-consumer and pro-competitive commercial plans at Manila consistent with the letter and spirit of the U.S. – Philippines ATA,” and requested the DOT defer Air Philippine’s request until, “United’s challenges in adding service at Manila have been addressed.”
Air Philippines in its Nov. 26 reply and motion in support of its application said that its code-sharing agreement follows all pertinent regulations, is in line with previous DOT authorizations for code-sharing between Air Philippines and Philippine Airlines, is consistent with the agreement between the U.S. and the Philippines and is in the public interest.
Air Philippines also said in its reply that the slot allocation process at the Manila airport is implemented by an appointed slot coordinator — Airport Coordination Australia — which follows guidelines stipulated in the International Air Transport Association’s Worldwide Slot Guidelines, and access to terminal facilities is determined by the Manila International Airport Authority.
“[Air Philippines] does not control either of those entities or processes,” the airline said in its reply. “In fact, [Air Philippines] itself has been refused slots at [Manila airport] at requested times in the past.”
The reply went on to say that if United has the difficulties at the Manila airport that it alleges, there are ways for the DOT to address those issues directly with the Philippine government.
“[United] also has the right to file a complaint with the Department under the International Air Transportation Fair Competitive Practices … which is expressly designed to provide a mechanism to address these types of issues,” the reply said.
Caitlin Harvey, a public affairs specialist with the DOT, said the agency is still reviewing the record and has no schedule as to when a decision will be made. mbj