MANILA (Reuters) - The U.S. aviation regulator has upgraded the civil aviation status of the Philippines to let its airlines operate new direct flights to the United States, Manila's transport minister said on Thursday.
The upgrade to category 1 status by the U.S. Federal Aviation Administration (FAA) follows a downgrade to category 2 in 2008 because the Philippines lacked oversight laws for air carriers and fell short of international safety standards.
"This upgrade cements a landmark era in the Philippine aviation sector," Philippine Transportation Secretary Joseph Abaya said in a statement.
The Philippines created an independent regulatory body in March 2008, soon after the FAA downgrade, and pulled its standards into line with international norms set by a U.N. body, the International Civil Aviation Organisation.
Abaya said the upgrade would have a significant impact on the Philippines' economy by allowing its airlines to add direct flights with the United States, boosting tourism and trade.
All Philippine carriers may now apply for flights to the United States, said Capt. John Andrews of the Civil Aviation Authority of the Philippines.
"There are no more restrictions," he said in a television interview. "We are now world-class as far as the aviation industry is concerned."
For example, national carrier Philippine Airlines will be able to launch more routes, and step up its flight frequency in the United States, particularly on the East Coast.
PAL has 28 flights every week to four destinations in the United States - San Francisco, Los Angeles, Honolulu and Guam, carrying 27,000 passengers. There are plans to open new gateways to the U.S. East Coast using Boeing 777-300s.
Shares of Philippine Airlines rose as much as 2.9 percent, while low-cost operator Cebu Air Inc climbed as much as 4.3 percent in early trade after the FAA announcement.
Tony Fernandes, chief executive of low-cost carrier Air Asia, welcomed the FAA upgrade.
"Great news Philippines they have got back category status from FAA," he said on social media site Twitter. "Means Air Asia Philippines can now have access to routes."
The FAA said the Philippines had to maintain its category 1 rating by sticking to safety standards set by the ICAO, a U.N. technical agency that establishes international standards and practices for aircraft operations and maintenance.
The Philippines also expects the European Union to lift a ban on Cebu Air imposed in 2010 over the ICAO's concerns about local aviation safety standards. It allowed Philippine Airlines back to European skies last year.
(This version of the story corrects AirAsia official's title to chief executive, not chairman, in paragraph 11. This version also clarifies that lifting of ban applies to Cebu Air, not local airlines, in last paragraph)
(Reporting by Manuel Mogato and Siegfrid Alegado; Editing by Clarence Fernandez)