VZCZCXYZ0000
OO RUEHWEB

DE RUEHML #3646 3180733
ZNR UUUUU ZZH
O 140733Z NOV 07
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8858
RHMFIUU/FAA NATIONAL HQ WASHINGTON DC IMMEDIATE
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC IMMEDIATE
INFO RUEHGP/AMEMBASSY SINGAPORE IMMEDIATE 7256
RUEHKO/AMEMBASSY TOKYO IMMEDIATE 3389

UNCLAS MANILA 003646 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
STATE FOR EAP/MTS AND EEB/TRA/AN 
FAA FOR API-1/AFS-50/AGC-7 
SINGAPORE FOR FAA REP 
TOKYO FOR FAA CARL STROMBOM 
 
E.O. 12958: N/A 
TAGS: EAIR ECON RP
SUBJECT:  PHILIPPINES CIVAIR: LETTER FROM PHILIPPINE AIRLINES 
REGARDING AVIATION SAFETY 
 
REF: STATE 149143 
 
¶1.  On November 6, 2007 we met with the Philippine public-private 
task force which was formed in response to the FAA summary report 
regarding aviation safety oversight. 
 
¶2.  We subsequently received a letter dated November 8 from task 
force member and Philippine Airline President Jaime Bautista 
summarizing the meeting. 
 
¶3. Begin text of the letter: 
 
[Greetings] 
This has reference to our meeting yesterday at the Century Hotel to 
discuss the latest developments and chart responses to the US 
Federal Aviation Authority's (FAA) intention to place the 
Philippines under Category 2 status on 29 November 2007 unless 
significant and concrete reforms are instituted immediately by the 
Philippine government in having the Air Transportation Office (ATO) 
effectively discharge its oversight and regulatory function over 
aviation safety. 
All participants in the meeting were in agreement that the 
consequence of a Category 2 status will be devastating to the 
tourism industry of the Philippines and to the local airline 
industry. In so far as PAL is concerned it will adversely affect the 
investment it made in acquiring six (6) brand new Boeing 777-ERs, 
which are to be dedicated in expanding PAL's transpacific route to 
the United States starting 2009. Further, it removes the business 
case for two (2) additional Boeing 777-ERs that PAL is planning to 
add to its fleet by 2008. 
The participants from the US embassy suggested that Philippine 
carriers PAL and Cebu Pacific get together to lobby the Philippine 
government to complete the legislative and administrative reforms 
needed to implement the deficiencies identified by the FAA 
inspection team. 
PAL reported that, more than a month ago, it submitted to the 
Chairman of the Transportation Committee of the House of 
Representatives a comprehensive bill proposing the creation of an 
independent Civil Aviation Authority. The bill had safeguards such 
as fiscal autonomy, security of tenure and non-application of the 
Salary Standardization Law to fortify the Authority's independence. 
The bill also incorporated the FAA model Civil Aviation Safety Act 
to institutionalize and strengthen the regulation and oversight of 
aviation safety. PAL also reported that it engaged the services of 
ex-ATO officials to develop a program of action. During the meeting 
the team of ex-ATO officials led by former ATO Chief Ortega 
submitted to Transportation Secretary Mendoza a program of action 
identifying the corrective actions needed, a complete timetable for 
completion and their availability to help out in any way deem fit by 
the Secretary. 
Transportation Secretary Mendoza promised to integrate all the 
foregoing inputs to the legislative and administrative plan of 
action, which his team is completing in response to the findings of 
the FAA.' He assured that the budget is available to fund the 
resources needed to implement the reforms. He emphasized that 
Philippine President Arroyo has already certified the legislative 
package of reforms in civil aviation as an urgent legislative agenda 
of her administration. Secretary Mendoza advised that he would meet 
with FAA officials to present his program. 
As can be seen from all of the foregoing activities, the Philippine 
public and private sectors are intensely working together to produce 
the institutional reforms that will overhaul and strengthen the 
regulation of civil aviation safety. 
Under the circumstances, a little more forbearance of several months 
will allow the completion of the package of reforms and avert a 
major setback to the economic recovery of the nation. Thus, 
extending the 29 November 2007 deadline for placing the Philippines 
under Category 2 status will go a long way in achieving the 
objectives of the FAA of helping a developing nation like the 
Philippines become a model of transformation in regulating its civil 
aviation industry. 
We deeply appreciate your continuing efforts in helping the cause of 
the Philippine government and the local civil aviation industry. We 
gratefully look forward to your continued support. 
Sincerely, 
JAIME J. BAUTISTA 
President and COO 
End text of letter 
Kenney