Philippines reforms aviation sector after FAA downgrade

This is from AFP.
If the government had been doing its work properly this never would have happened. As it is, it will take some while for companies such as PAL to become competitive and gain back lost ground. At least, it sounds as if this reform should work.

Philippines reforms aviation sector after FAA downgrade
18 hours ago

MANILA (AFP) — Philippine President Gloria Arroyo on Tuesday announced the setting up of a new regulatory authority to reform the country's substandard aviation sector.

The new Civil Aviation Authority of the Philippines will replace the Air Transportation Office (ATO), which has been blamed for the nation's air safety rating being downgraded by US authorities.

"Thanks to this new law... the air travel in this country will be liberalised and the obstacles to the entry of tourists and investment will be removed," Arroyo said after she signed a bill setting up the authority.

The US Federal Aviation Administration (FAA) in December reduced the Philippines' rating to Category 2 from Category 1, saying the ATO had failed to meet international safety standards.

"With the passage of this law, we are confident that the US FAA can have a review of our system and come up with a better rating for civil aviation in the Philippines," Arroyo's chief aide Eduardo Ermita said.

The new aviation authority will be allowed to retain earnings from its fees and set its own salaries for employees. It can then address the FAA's concerns by spending more on safety upgrades and offering competitive salaries to retain skilled personnel. Under the ATO, the money from fees went to the government, meaning it had to go cap-in-hand to Manila every time it needed to pay for any projects.

Industry leaders now hope the country's safety status could be raised within four months.

National carrier Philippine Airlines earlier said it may lower its 2008 growth targets due to the FAA's rating, effectively putting its expansion plans on hold.

The FAA decision prohibits PAL from increasing its flights to the US from 33 a week and from changing the type or number of aircraft used on those services.