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Category Two (2): The Philippine Experience
In December 2006, Philippine Airlines (PAL) announced its re-fleeting program that included the purchase of several Boeing 777s intended primarily for plying the lucrative US-RP Pacific corridor.
In December 2006, Philippine Airlines (PAL) announced its re-fleeting program that included the purchase of several Boeing 777s intended primarily for plying the lucrative US-RP Pacific corridor. The move was a most welcome one since the airline was at the cusp of being released from a decade long shackling via corporate receivership and was poised to return to profitability after years of suffering from dizzying financial losses. Unbeknownst to PAL at that time was the impending lowering of the boom by the Federal Aviation Administration (FAA) of the United States that would render the newly acquired 777s inoperable for the US-RP sector like some unwanted houseflies at a dinner table.
Under the International Convention on Civil Aviation (Chicago Convention), each country has the sole power to conduct safety oversight of its own air carriers. Thus, the FAA is not permitted to evaluate a foreign carrier within its own sovereign state. Its power is restricted to assessing the civil aviation authority (CAA) of each country (in the case of the Philippines, the Civil Aviation Authority of the Philippines "CAAP") that has carriers operating to the US, pursuant to its International Aviation Safety Assessment Program (IASA) that in turn is based on standards set by the International Civil Aviation Organization (ICAO) and Annexes 1, 6 and 8 of the Chicago Convention.
On 8 January 2008, the FAA issued the results of its IASA and it included the Philippines or particularly the CAAP, as one of the state CAAs listed under the Category 2 status. With this status, the Philippine CAAP is considered as a CAA that does not meet the standards of the ICAO and air carriers regulated by the CAAP and operating to the US will not be permitted to initiate new service and limited to current levels of any existing service to the US while remedial measures are being performed. No code sharing arrangements between Philippine carriers and US carriers will also be allowed while the Philippine carriers can also be subjected to additional inspection requirements while using US airports.
Generally, the grounds for finding a CAA as deficient and therefore, warranting a Category 2 status are:
1. The country to which the CAA belongs lacks laws or regulations necessary to support the certification and oversight of air carriers in accordance with minimum international standards;
2. The CAA lacks the technical expertise, resources and organization to license of oversee air carrier operations;
3. The CAA does not have adequately trained and qualified technical personnel;
4. The CAA does not provide adequate inspector guidance to ensure enforcement of, and compliance with, minimum international standards; and/or
5. The CAA has insufficient documentation and records of certification and inadequate continuing oversight and surveillance of air carrier operations.
Undeterred, the Philippine government downplayed the impact of the downgrading by assuring the public that the government was already addressing the ‘organizational and institutional' problems of the country's aviation sector. Then chair of the House Committee on Transportation, Rep. Monico Puentevella, declared that the issue would be resolved before the end of 2008 once the country's airports have been upgraded and the bill creating the CAAP (to replace the antiquated Air Transportation Office) had been passed.
The government largely attributed the IASA results to the failure of the country's air terminals, particularly in the outlying areas, to meet certain security requirements.
While the law creating the CAAP was eventually passed in 2008 and some upgrading of certain airport facilities were undertaken, the Philippine CAAP remained mired under the Category 2 listing.
To make matters worse, on 18 December 2009, the ICAO decided to join the fray and published a bulletin showing the results of the Universal Safety Oversight Audit Program that it conducted in the Philippines in October 2009. It declared the Philippines as a "Significant Safety Concern" because the Philippine government continues to have unresolved issues regarding its air safety oversight and security systems following the downgrading by the FAA of the CAAP to Category 2 status.
Not to be outdone, the European Commission (EC) on 30 March 2010, added the carriers of the Philippines (specifically PAL and Cebu Pacific) as among the airlines banned from operating in the European Union citing the ICAO safety assessment report.
Realizing that the efforts to take the Philippine CAAP out from the quagmire have so far proved futile, then Philippine president Gloria Macapagal Arroyo ordered the CAAP to resolve this matter as soon as possible. Noting that not only was the situation an embarrassment for her administration, there too are the deleterious economic effects that the downgrading has had on the country's flag carriers.
It also appeared that other countries, even those not belonging to the EU, were being influenced by the FAA and ICAO findings. Countries such as Japan and Korea have used the downgrading as justification in refusing applications by Philippine carriers for changes in schedules or additional airport slots within their respective territories.
Accordingly, stronger corrective actions were recommended under the leadership of CAAP Director General Alfonso Cusi, including the replacement of CAAP personnel, tenured or otherwise, by ICAO-trained Qualified Technical Personnel and stricter implementation and enforcement of Philippine civil aviation regulations that were formulated within the last decade. However, despite these changes and a formal request by the CAAP Director submitted before the ICAO for the lifting of the Safety Concern status, the Philippine downgrading continues and a lot of finger pointing has ensued.
Questions now abound as to what the FAA and the ICAO are really looking for in terms of needed changes. Unfortunately, both the FAA and the ICAO have been tightlipped about the details. Meanwhile, the Philippine CAAP's decision to go about this on its own (without any external help) has not borne fruit at all. As a result, suggestions have been made for the need to involve the guidance of aviation safety experts who possess intimate knowledge of FAA and ICAO requirements for the formulation of a comprehensive action plan, acceptable to the FAA and ICAO, which the CAAP will implement. The recent experience of countries such as Greece and Nigeria seem to point to a similar solution. Both countries also found their respective CAAs downgraded but have recently been restored to Category 1 status. They cite the strict adherence to the guidelines outlined by the aviation safety experts as key to the restoration of the coveted status.
Interestingly, local newspapers reported recently that the Philippine government just announced its plans to make the Philippines a regional cargo hub that would rival both Hong Kong and Singapore in the future. Well and good, of course. However, the timing of the announcement brings to mind, by analogy, the case of this poor fellow, who was just advised by his doctor that he needed to undergo an angioplasty as soon as possible, and yet, clearly oblivious to the risks to his physical well-being, stubbornly insists on joining the next Iron Man competition.
In any case, a new Director General was recently appointed to head the CAAP in the person of retired air force officer, Ramon Gutierrez. He now inherits the unenviable task of bringing his agency out from the dire predicament. Whether he is successful in this endeavor remains to be seen. What is clear however, is that the CAAP has to find a way to convince the FAA, the ICAO and the EU that the Philippine CAAP deserves a Category 1 status and the sooner this happens, the better it is for the Philippine aviation industry and the government's grand designs for more relevance in the future.
Edlyn C. Santiago
For more information please visit www.omlawphil.com
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