U.S. downgrade of Philippines to category 2 a major blow for

U.S. downgrade of Philippines to category 2 a major blow for PAL

Philippine Airlines (PAL) president, Jaime Bautista, has urged the aviation authorities in the Philippines to raise their game after the U.S. Federal Aviation Administration (FAA) downgraded the country’s airline operations to a category 2 rating because of safety concerns.

The downgrade will seriously affect PAL’s plans to expand its operations in the U.S and could see it lose market share of passenger traffic between the U.S. and the Philippines to U.S. carriers..

The FAA informed the Philippines government in January it had “serious concerns” about its oversight of its air operations, which it said were not in compliance with the International Civil Aviation Organisation (ICAO) safety standards.

The downgrade puts the Philippines in the same category level as Bangladesh, Ghana, the Ivory Coat and Indonesia.

PAL is the only carrier flying to the U.S. from the country. Bautista said the rating “reflects the FAA’s assessment of the ATO’s [Air Transportation Office] compliance to international safety standards and not on the local airline”.

The head of the ATO, Daniel Dimagiba, told the Business Mirror that the only way for government to secure more funds for safety and maintenance of aircraft was for President Gloria Macapagal-Arroyo to sign recently passed legislation to create a civil aviation authority.

Dimagiba said the ATO’s annual budget of US$32 million was mostly spent on salaries and operating expenses. Another $24 million would be needed to upgrade navigational equipment and communications, he said.

PAL flies to Los Angeles, San Francisco and Las Vegas in the U.S., but Bautista is concerned about the negative impact of the downgrade on its plans to fly to San Diego, Chicago, New York and Saipan. He urged the ATO to “rectify the assessed deficiencies … so the country can revert to category 1”.

U.S. services account for about 36% of PAL’s revenue. The new routes were expected to add another 10% to that figure. The downgrade means PAL, which only emerged from receivership in December, cannot add capacity to existing routes in the U.S. or fly to planned new destinations, said Bautista.