Philippines: EAGA transport cluster extends 5th freedom rights to six more areas

Apr. 25, 2007

PUERTO PRINCESA CITY–To push for greater momentum in improving air connectivity within Brunei Darussalam-Indonesia-Malaysia-the Philippines East ASEAN Growth Area, airports in six more areas of the sub-region areadded to the list of designated points to be granted with Fifth Freedom Traffic Rights (FFTR).

In a recently held 4th BIMP-EAGA Transport, Infrastructure and ICT Development Cluster Meeting here, the EAGA working group on air
linkages agreed to grant fifth freedom traffic rights to all passenger and cargo services in the airports of Manado and Tarakan in
Indonesia, State of Labuan and Miri in Malaysia, as well as in Puerto Princesa and General Santos Cityin the Philippines.

These are the new FFTR designated points in BIMP-EAGA in addition to Bandar Seri Begawan in Brunei Darussalam, Balikpapan and
Pontianak in Indonesia,Kota Kinabalu and Kuching in Malaysia, as well as Davao and Zamboanga City in the Philippines.

“The granting of the Fifth Freedom Traffic rights to priority airports in the member countries is one of the breakthroughs in the
meeting here,” said Ang Kian Guan, Head of the Brunei Delegation and concurrent chair of theBIMP-EAGA TIICTD Cluster.

He added that this measure will boost travel and trade by allowing more airlines to undertake more air services in the identified
priority air routes of BIMP-EAGA.

Implementation of the Fifth Freedom Traffic rights have been targeted in the Bandar Seri Begawan-Kota Kinabalu-Davao City, Bandar
Seri Begawan-Kuching-Pontianak, Bandar Seri Begawan-Kota Kinabalu and Bandar Seri Begawan-Kuching air routes as a result of the
signing of the Memorandum of Understanding on the Expansion of Air Linkages in BIMP- EAGA during the 3rd BIMP-EAGA Summit recently
held in Cebu City last 12 January 2007.

Fifth freedom right provides privilege to an airline to bring cargo and passengers from one country to another other than its home
country. The MOU also provides for multiple airline designation, no limitation on frequency,capacity and aircraft type, co-
terminalization and code-sharing schemes.

“Strengthening our air linkages within EAGA and promoting greater movement of people, goods and services across the sub-region
through air connectivity, essentially form part of the policy initiatives laiddown by President Arroyo in committing government
support to thisendeavor,” according to Mindanao Economic Development Council chair Usec. Virgilio Leyreana.

The four countries noted that majority of the designated airports forBIMP-EAGA air services are already compliant with
International CivilAviation Organization’s safety and security standards. A regular exchange of data and information on airports
development and best practices on ICAO safety and security compliance was also agreed.

Since it has been difficult to convince major airlines to serve air routesin the sub-region due to high cost of operations and low
load factor, the cluster has agreed to entice low cost and small airline operators to servethe identified priority air routes and
recommended for code-sharingarrangements among airline operators.

Thus, a BIMP-EAGA Airline Forum will be held back-to-back with the 2nd BIMP-EAGA Transport Ministers Meeting on 25-26 July 2007 in
the Philippines.The forum is intended to invite smaller regional airlines in BIMP-EAGA tointeract and familiarize with the
opportunities in the growth area.

BIMP-EAGA countries have been pushing for the expansion of air links in the sub-region in an effort to promote and enhance intra-
regional trade, tourismand investment cooperation among the focus areas.

The provision of air services in the BIMP-EAGA is envisioned to bring about greater accessibility, facilitate mobility of people,
enhance flow of goodsand commodities and attract investors to locate in the sub-region.

Created in 1994, BIMP-EAGA is a four-country grouping collectively pursuingsub-regional economic growth. With an estimated 50
million people spread outacross 1.5 million square kilometers of land in four countries, the BIMP-EAGA is Asia’s largest sub-
regional cooperation.

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