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Wednesday, June 18, 2003

NOT EVERYTHING FREE UNDER FTA

Red tape hinders Singapore Airlines campaign


Staff writer

Attempts by the SARS-battered Singapore Airlines to offer travelers bargain deals have been stalled here by domestic regulations, despite high hopes for mutual promotion of tourism under a bilateral free trade agreement signed recently.

On June 6, Singapore Airlines unveiled its largest global campaign ever, dubbed Fabulous Offer, featuring discounts of up to 75 percent.

The deals on offer, incorporating airfares, two nights at a hotel and other benefits, are aimed at restoring consumer confidence in Singapore, which has seen its travel traffic plunge amid the outbreak of the deadly severe acute respiratory syndrome.

While the airline touts the offer on its Web site as an opportunity for travelers across the globe, it has been unable to market the campaign in Japan, as travel legislation here bans airlines from selling package tours directly to consumers.

An airline must first register as a travel agent before offering deals of this kind.

Kazuhisa Okamoto, a spokesman at the Japan office of Singapore Airlines, admitted that travelers flying out of Japan might not get the best offer, adding that the airline is currently discussing with several travel agents here the possibility of offering the tours through them.

Okamoto said that, despite the worldwide launch of the campaign by the airline's headquarters in Singapore, local offices in some countries are having to make adjustments in introducing it.

The biggest discounts, of 75 percent, will only apply to the first 15,000 bookings worldwide, for those traveling between last Monday and Aug. 31.

After the first 15,000, similar deals featuring smaller discounts will be offered, he said.

Singapore Airlines Japan has received about 100 inquiries for the campaign since last week.

Marco Solas from the city of Chiba, who learned of the deal via a newspaper article, checked it on the airline's Singaporean Web site and contacted its Japanese branch. He had hoped to use the offer to visit Singapore before moving on to Thailand.

When he e-mailed the airline to ask about the deal, he was told that it did not apply to travelers flying out of Japan.

"I was under the impression that Japan was subject to free trade agreements, but maybe not," he said. "This denial of consumer choice is a rather significant one."

In fact, Singapore is the only nation with which Japan has concluded an FTA. The agreement, which took effect in November, states that signatories recognize tourism as an important industry for promoting mutual understanding and economic growth.

Masato Suzuki, an official with the Asia and Pacific Division in the Ministry of Economy, Trade and Industry, which oversees the Japan-Singapore FTA, said that while he supports the notion of tourism trade liberalization, the regulatory power rests with another ministry -- the Land, Infrastructure and Transport Ministry.

"Frankly speaking, Japan's aviation industry is most heavily protected," he said. "We at METI are all for breaking down trade barriers. We can shout our stance all we want, but it is them (the land ministry) who have the actual authority."

Suzuki added, however, that if the Singaporean authorities take issue with the current rules, it could be taken up by a bilateral committee reviewing the FTA's progress.

The land ministry, meanwhile, remained evasive on whether the current rule contradicts the bilateral trade agreement.

Yasuaki Shimada of the travel promotion division said he could not comment immediately, adding that it is a "policy matter" that requires further consideration.



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