William K Hotchkiss III, Director-General, Civil Aviation Authority of the Philippines (CAAP): Interview

Interview: William K Hotchkiss III

What opportunities does the return to a Category 1 safety rating generate for the development of new long-haul routes and tapping into new markets?

WILLIAM K HOTCHKISS III: The expected benefit is increased connectivity between the Philippines and the US, enabling Philippine airlines to fly to new destinations in North America, either via new routes or by expanding existing ones. This will positively impact their profitability with the potential influx of passengers and cargo, since there is a sizeable Filipino community in the US. The flow of trade and investments between the two countries can be expected to flourish given their history of close, friendly diplomatic and commercial ties.

In connection with these developments, the Department of Transportation and Communication and CAAP have engaged the US Federal Aviation Administration through a Technical Services Agreement signed in 2013, forming collaborative technical programmes to bolster the CAAP’s efforts towards compliance in aviation safety and to ensure the sustainability of the reforms it has implemented. As for developing new routes, the CAAP’s main contribution is to ensure the airworthiness of Philippine aircraft, by enforcing strict compliance with the standards of the International Civil Aviation Organisation and by closely monitoring airlines’ implementation of good corporate governance principles.

To what extent has inadequate airport infrastructure in the Philippines affected domestic connectivity and the development of tourism?

HOTCHKISS III: The Philippines has 86 airports, five of which have their own charters and operate independently except for air traffic and navigational services, which the CAAP provides. The 81 airports managed by the CAAP are in areas serving major cities and tourist destinations, and have shown robust growth, in both passenger and cargo traffic, domestic and foreign.

We are currently undergoing a rationalisation programme to determine the measures needed to expand the capacity of our commercial airports and upgrade them to international standards. With the Department of Tourism (DoT), for instance, we have embarked on a “gateway convergence” programme that identifies which airports draw the most tourists with reference to local destinations, as well as which areas have the highest concentration of trade and investment activity. These airports were then earmarked for expansion – or even relocation – through the government’s public-private partnership programme, including the Bacolod-Silay, Iloilo, Bohol (Panglao) and Puerto Princesa airports in the Central Visayan region and Laguindingan and Davao airports in Mindanao. The perceived congestion that Ninoy Aquino Airport is experiencing is to be expected, as its location in the centre of Metro Manila makes it the preferred stop or transfer point for local and foreign air travellers. The full operationalisation of the new CNS/ATM project by June 2016 should enable us to better manage our air traffic system.

In what ways could an open skies policy for ASEAN affect aviation in the Philippines vis-à-vis the current administration’s “pocket” open skies policy?

HOTCHKISS III: An open skies policy can only benefit Philippine civil aviation by making the sector stronger through competition – the driver of liberalisation. The definition of open skies under the ASEAN Single Aviation Market (ASAM) is subscription to the “full fifth freedom” air right, whereby an airline from one country can land in a second country, pick up passengers, then fly on to a third country where the passengers deplane. This condition embodies, in part, the ASEAN goal of a free flow of goods, services and manpower within a single production and marketing block. However, while this air connectivity opens opportunities for aviation enterprises to grow, it also poses the challenge of prudent management to keep their competitiveness. The Philippines can gain a lot of mileage from the ASAM platforms – rationalisation, standardisation, harmonisation and convergence in propelling the growth of the country’s civil aviation sector in a sustainable way.