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If you have access to the Internet you have probably received an e-mail that contains pictures of what are claimed to be the flight attendants’ quarters of various airlines.The e-mail starts with the plush accommodations—complete with airbeds—that several foreign airlines supposedly reserve for their cabin crews. It ends with the picture of an Asian-looking flight attendant dozing off on a crappy jump seat; the picture is captioned “Philippine Airline” (sic).
It is one of those e-mails that a disturbing number of Filipinos seem to enjoy circulating as they engage in their favorite pastime—putting their own country down.
Indications are, however, that the e-mail is nothing but a hoax. For one thing, the “Philippine Airline” stewardess looks more like a malnourished stewardess of one of China’s regional airlines—a number of which are truly crappy, going by their horrible safety records—than a PAL flight attendant.
But even if the e-mail were authentic, it does not tell the whole story.
If foreign airlines are indeed able to make available deluxe accommodations to their flight crews, it is only because their bottom line regularly gets a big boost in the form of hefty subsidies from their own governments.
In contrast, our flag carrier and our other carriers get no such support from the Philippine government.
In our part of the world, many airlines are either partly or wholly owned by the state. For some Asian countries, keeping their airlines at par with the world’s best is a matter of national pride—and they don’t mind spending billions of taxpayer dollars just to be able to do so.
For instance, the charming Singapore Girl who promises to satisfy the fantasies of air travelers is actually a civil servant because Singapore Airlines is owned entirely by the city-state’s government.
Other Asian airlines such as Thai Airways International, Malaysian Airlines, Korean Air and Asiana regularly get infusions of state funds. Practically all of the countries in the Middle East also subsidize their airlines.
In other parts of the world—from North America to Europe to Australasia—governments continue to support their flag carriers notwithstanding admonitions from their own officials and economists that governments have—to borrow the free-traders’ mantra—no business going into business.
State subsidies to airlines are bad because they give unfair competition to those of countries like the Philippines that do not give financial support to their carriers.
What is worse in our case is that the government is giving undeserved advantage—in the guise of an “open skies” policy—to foreign airlines that are heavily subsidized by their own governments.
Despite the lack of government support, our carriers have managed to keep their heads above water. But the question is, for how much longer?
Philippine Airlines, for instance, was able to post profits without subsidies from the government. It registered record net earnings of $140.3 million for fiscal 2006-07—PAL’s third profitable year in a row.
The milestone has emboldened the private flag carrier—the only one of its kind in Southeast Asia—to apply for an exit from receivership from the Securities and Exchange Commission by the end of the year.
PAL, therefore, had good reason to take the moral high ground as it joined the global call for the abolition of all forms of government subsidies to flag carriers—especially those in Southeast Asia and the Middle East—as a precondition to the liberalization of the aviation industry.
PAL executives, led by vice-president for marketing support Felix Cruz, said at a recent press forum that subsidies and all other forms of state support “can seriously distort competition.”
They added that PAL is ready to compete but underscored the need for “equal opportunity” for the “open skies” regime, which certain government officials have long been pressing for.
PAL joins other airlines, such as Australia’s flag carrier Qantas, which has called for a ban on unfair subsidies enjoyed by Emirates, Qatar Airways, Singapore Airlines and other carriers.
