Why CAB slapped P1.8-M fine on Emirates Airlines

ABS-CBN News

Posted at Dec 12 2014 12:34 PM | Updated as of Dec 13 2014 04:14 AM

MANILA, Philippines (UPDATE) – Top Middle Eastern carrier Emirates Airlines has been slapped with a P1.8 million fine by Philippine regulators.

The Civil Aeronautics Board (CAB) said it imposed a P1.8 million fine on Emirates for selling tickets for a third additional Manila-Dubai route without first getting its approval.

Carmelo Arcilla, executive director of CAB, said Emirates violated rules when it sold the tickets for flights until October 2015.

Emirates was only given a 30-day extension or until December 26 to operate the extra flight (in addition to its two daily flights) between Manila and Dubai. The airline had earlier received the first 30-day extension which expired on November 26.

"The law prohibits an airline from selling flight services without authority to operate such flight, obviously for reasons of public policy that seeks to protect the public from the hazards arising from the uncertainty and unreliability of an unauthorized flight," Arcilla said.

Arcilla noted CAB has already ordered Emirates to stop selling tickets for the third daily flight beyond December 26.

"Emirates is ordered to desist from selling services for a third daily flight between Manila and Dubai, vice versa, beyond December 26, which is the expiration date of the second 30-day period it is allowed to operate a third daily flight," he said.

In a joint statement, PAL and Cebu Pacific commended the CAB for taking immediate action on the matter.

“While we welcome foreign carriers' contributions to the economy, they should not be allowed to disregard Philippine laws and regulations,” the airlines said.

Emirates' request for accelerated air talks with the United Arab Emirates (UAE) is due for deliberation on December 19.

“We hope that the CAB remains guided by their mandate of serving the interests of the Philippine aviation industry. We reiterate our appeal against holding a new round of bilateral air negotiations with the United Arab Emirates in the near future,” PAL and Cebu Pacific said.

“Air talks with the UAE is not a priority at this time, given the significant increase in capacity over the past year and it may only legitimize Emirates' third daily frequency, which renders useless the very CAB decision penalizing Emirates precisely for not respecting Philippine laws,” they added.

The CAB decision comes after Philippine Airlines and Cebu Pacific stepped up its offensive against Emirates over what it called "excessive" Manila-Dubai flights.

"Emirates has already been granted and unfair and unwarranted frequency advantage, by operating a third daily frequency beyond what is allowed by the UAE-Philippines agreement. An imbalance has been created: Today, UAE airlines operate 5 daily frequencies to and from the Philippines, whereas Philippine carriers only operate 3 daily frequencies between the Philippines and UAE," PAL and Cebu Pacific said earlier.

The two Philippine carriers are also opposing the proposed new air talks between the Philippines and the United Arab Emirates.

"Negotiating any new agreement with the UAE at this time would only serve to reward Emirates, the UAE's biggest airline, for having blatantly disregarded the authority of the Civil Aeronautics Board (CAB) by continuing to offer and sell flights without the approval or authorization of the CAB. Defiance of our regulatory authorities should be appropriately penalized rather than handsomely rewarded," they said.

Last October, CAB turned down Emirates' petition to use PAL's unutilized frequency until March next year, but the carrier filed an appeal.

For its part, Emirates said it has already spent a total of $99.2 million in the Philippines including fuel uplift, aircraft landing and handling costs, in-flight catering, advertising, and area overheads.

"Emirates has proven time and again that it is committed to the Philippines’ growth. From the first Manila-Dubai flight we offered in 1990 to the ones in operation today, we will continue to serve the Filipino people,” Emirates senior vice president for aeropolitical and industry affairs Salem Obaidalla said.

Emirates Philippines country manager Abdalla Al Zaman said they remain committed to the country.

"As we look forward to 2015, we will still uphold our commitment to providing innovative products and the highest quality to customers, shippers, and business partners in the aviation and travel industries. Emirates passengers can certainly expect for more," he said.