Air safety costs Philippines billions in lost revenue
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The Philippines has lost an estimated PHP66.3 billion (US$1.6 billion) in tourism revenues over the last two years owing to airline safety standards. The United States Federal Aviation Administration (FAA) downgraded Philippine carriers to category two status in 2009 which has prevented them from expanding route networks and capacity. This means airlines and the travel industry have been unable to capitalise on growth in the US market.
Aileen Clemente, President of Philippine Travel Agencies Association (PTAA), said; “Assuming that Philippine Airlines [PAL], with its six new B777, was able to add 42 new flights to the US weekly, we are looking at 1.4 million lost tourist arrivals since 2009. This is also not yet taking into consideration the potential number of flights Cebu Pacific could actually make to the US.” Instead, PAL is limited to 33 flights weekly to the US.
US travellers accounted for 17% of international arrivals to the Philippines in 2010. That equates to around 600,000 people, spending an average of PHP2,600 per day for stays of up to three weeks. Clemente and other travel agents believe there is potential for expansion in this market and the government has lost an estimated 150,000 new jobs as a result of the downgrade.
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