American And United Spar Over Philippine Airlines

a group of people walking with luggage

I’ve written before about how United Airlines is trying to stop Philippine Airlines from expanding in the USA unless United also gains a new slot in Manila. Now United is trying to block a new codeshare agreement between Philippine Airlines and American Airlines and American is fighting back.

United Wants To Block Codeshare Agreement Between American Airlines and Philippine Airlines

United has been trying to secure an extra slot at Ninoy Aquino International Airport in Manila. It’s not clear if United wants to add an additional flight from Guam or is considering new service from another station.

The Philippines and U.S. do not have an Open Skies agreement. Instead, they have a bilateral agreement that governs air service between the two nations. The agreement promises “fair and equal competition” but new routes are subject to government approval on an individual basis. Over the last year, Philippine Airlines (PAL) has increased service to the U.S. by 29%. It also proposes thrice-weekly service to Seattle utilizing its new A350-900 aircraft and new codeshare agreement with American Airlines.

Lawyers for PAL have insisted that United has not proven its case:

“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.”

United, however, says it has submitted evidence privately to the DOT. Whatever submitted seems to have worked since the new codeshare and new route have not been approved. The circumstantial evidence itself is quite strong. As United has been denied even one slot in Manila, PAL has continued to expand to new U.S. and other international destinations. The new Seattle flight would require an additional slot.

As American Airlines seeks to build up in Seattle to better challenge Delta, it has pursued a codeshare agreement with PAL. United has protested and thus far it has been blocked. In a joint statement to the U.S. Department of Transportation, PAL and AA said:

“Deferring action on American’s and Philippine Airlines’ application would be a disproportionate and asymmetrical reaction.”

They have urged United to produce more evidence, but United refuses to make that public.

CONCLUSION

All of this may be moot in the post-COVID-19 world. At the very least, any action from the DOT will likely be delayed due to more pressing matters. But the DOT cannot kick the can down the road for long; it will eventually need to rule on this.

image: Philippine Airlines