Airlines are quick to identify unfair state support to competitors but are reluctant to describe it using the P word: protectionism. With aviation intrinsically an international sector and often focal point of government strategy, alleging protectionism is considered serious.
United Airlines is entering the fourth month of its campaign against unfair practices in the Philippines. The debate has added weight with United now leveraging Philippine Airlines’ request to start a new Manila-Seattle flight in May, timing that increasingly looks tight due to United’s lobbying. The big P – protectionism – is still not in the lexicon. Instead this debate might be characterized by the next letter of the alphabet: s for serial, scintilla, and support.
Serial. United has objected to a routine regulatory filing from PAL to launch three weekly flights between Manila and Seattle from May 3. United makes clear it has no objection to PAL’s direct request, but instead United’s contention is that if PAL receives approval – as would typically occur with such a banal regulatory matter – PAL would benefit from the US upholding its side of the air service agreement with the Philippines.
United, however, argues the US is not receiving reciprocal support because United has been unable to secure slots and airport facilities at Manila. United does not want the US Department of Transportation to rule on PAL’s request until United’s competition issues are addressed.
This was similar to United last November effectively blocking a codeshare request between PAL and PAL Express. United did not object to the codeshare but took issue with the uneven competition. United’s repeated regulatory filings, often with the same arguments, led PAL Express’ lawyers to bemoan United’s “serial filings”. The codeshare, first requested November 6, has yet to be acted on by DOT – an unusually long wait.
Scintilla. PAL wanting to add a Seattle flight could give momentum – and evidence – to United’s argument. In the PAL-PAL Express matter, United pointed out that while it was rejected for slots at Manila in order to add a new flight, PAL was able to secure slots for more US flights (and more broadly to non-US destinations, too). PAL now wanting to add a Seattle flight furthers United’s claim that slot distribution is uneven.
United has not provided specifics about its Manila slot request, such as what times it needs slots for, or where the slot will be used. United has a Guam-Manila flight but has not explicitly said it wants to add a second Guam-Manila flight or link Manila with another airport. “United still has not presented a scintilla of evidence to support its vague and factually unsupported allegations about alleged slot and infrastructure issues at Manila,” PAL Express’ lawyers wrote. United said its commercial plans are private but it has submitted evidence to the DOT.
Support. In objecting to PAL’s request to start a Seattle flight, United is not introducing new arguments. But United is upping the ante since a new flight and possible delay has higher stakes than a codeshare. Yet by taking its argument to a larger case, United confronts more industry participants, and with heavier weight.
No outside parties commented on United’s issue with the PAL-PAL Express codeshare. But immediately after PAL applied to start a Seattle flight, the Port of Seattle, which owns and operates Seattle-Tacoma international airport, filed a letter in support of PAL’s request. The letter did not give direct hint of possible contention from United, but after United took issue with PAL’s Seattle request, the Port of Seattle filed a second letter.
“While I understand that United Airlines has separate concerns about their ability to receive favorable Manila slot times from the Filipino government authorities, this is not relevant to the matter at hand and should not be used as a tactic to prevent or delay a private air carrier from serving a U.S. market,” Sea-Tac MD Lance Lyttle wrote to DOT Secretary Elaine Chao. “I urge you to consider that deferring action on PAL’s application would penalize our longstanding efforts to serve the public interest by providing service to our largest unserved market.”
United still argues there is precedent for its request for DOT to delay action until United’s competition matters are addressed, although PAL and PAL Express argue doing so would be inappropriate, and the historical matters are different comparisons.
What is certain is that United’s objections are delaying matters. One of the historical examples is American Airlines objecting to a routine Air China application on the basis American could not secure slots. But American withdrew its objection after two weeks. The PAL-PAL Express codeshare is in its fourth month of deliberation and was planned to commence March 5.
United is potentially forcing some transparency on Manila’s opaque slot allocation, which could benefit other airlines at Manila as well as more broadly at other airports. But with higher stakes, United could encounter pressure that sees it lose not based on merit but politics. If United is unsuccessful, it has other channels, albeit lower profile and requiring more time as Manila slots become even more scarce.
Passengers arrive at Manila International Airport in February 2018.
