RP allows Cathay to fly local routes

RP allows Cathay to fly local routes

MANILA (Reuters): Philippine President Joseph Estrada said on Saturday that Hong Kong's Cathay Pacific Airways would start flying domestic routes from Monday to fill the vacuum caused by the closure of Philippine Airlines (PAL).

The government will let other airlines operate PAL's international routes, he said.

"They (Cathay) will start operations on Monday," Estrada said in an interview with radio station DZMM. This makes Cathay Pacific the first foreign airline allowed to fly passengers and cargo on domestic routes, aviation officials said.

"(Cathay) will send immediately five Airbuses and three other planes owned by PAL will be used," Estrada added.

"I don't bother much about international flights because there are other planes," Estrada said in an earlier interview with radio station DZRH. "I am more concerned about domestic flights because they affects business."

PAL and other domestic airlines welcomed news of Cathay Pacific's entry to the local aviation business.

"Whatever the government will do to alleviate the inconvenience of the Filipino people can help," said PAL's vice president for sales Avelino Zapanta.

"Cathay Pacific (asked) for our domestic fares and schedules so we gave it to them. After all, we are no longer in operation," Zapanta told Reuters by phone.

"It's a welcome development to get us over the hump in the short term," an Air Philippines official said.

But foreign airlines should be allowed to fill the void left by PAL only temporarily, the official told Reuters. "(The government) should give local airlines a chance to prove that they can service the demand," he added.

PAL, Asia's oldest national airline, closed down at midnight on Wednesday with US$2.0 billion of debts after failing to reach a deal with the unions to secure its future.

The airline closed after unions rejected a management offer of a 20 percent equity stake in PAL in return for a 10-year suspension of the collective bargaining agreement. Estrada gave no details of how the arrangement with Cathay would work and said he did not believe the government would need congressional approval for the entry of a foreign airline to the domestic aviation business.

In Hong Kong, Cathay Pacific said on Saturday that it would initially operate 10 domestic flights a day linking key cities in the Philippines using Airbus 330-300 aircraft. Additional destinations and flights will be added as the situation develops, it said.

Cathay currently runs 38 round-trip flights a week between Hong Kong and the Philippines, 34 between Hong Kong and Manila and four between Hong Kong and Cebu.

Since PAL closed, passengers on domestic routes have had to queue for days to get seats on one of the four other domestic airlines.