The PAL behind Lucio Tan


No photo Humility in high places
PEOPLE By Joanne Rae M. Ramirez
March 31, 2009

Some men never let success go to their heads. Perhaps, that is why they are more successful than others.

On my return flight from Los Angeles to Manila, I was seated in the Mabuhay Class section beside businessman J. Castro of the Kylemed Group of Companies, a pharmaceuticals group. He has offices in both California and Metro Manila, so he shuttles between both places regularly.

California-based, he likes to take Philippine Airlines primarily because of the direct 12-hour flights from Manila to LAX, and back (though there are some flights to Manila that have to make a technical stop in Guam). He also likes arriving in Manila at the crack of dawn, refreshed after a good night’s sleep (the flight leaves LAX at midnight), and ready for a power breakfast meeting in Manila.

But now, he has another good reason for taking PAL.

Last November, he and his wife were traveling to Los Angeles from Manila on PR 102 and were seated on Row 4 of the newly-reconfigured Business Class section of the Boeing 747-400 that was assigned to their route.

After they were settled in their seats and just before take-off, they decided to try out the features of the high-tech seats of the reconfigured Boeing.

Alas, Castro’s seat wouldn’t recline. His wife’s seat also wouldn’t recline!

The flight attendants tried to help out, but it seemed these high-tech seats were not programmed to respond to manual manipulations. They were stuck. The plane was ready to take off and the Castros were faced with the prospect of an uncomfortable flight ahead.

The Castros politely but firmly told the flight purser that they wanted to be reseated.

The purser checked out the seating list but told the couple there were no other available seats that night. The Castros then told the purser that rather than endure a 12-hour flight sitting up straight for the price of a Business Class ticket, they would rather just disembark.

The plane doors were already shut, but the Castros were adamant. I can imagine the purser’s dilemma, because when a passenger disembarks, his luggage has to be offloaded, too, and this could easily cause a delay of one hour. Stuck in an aircraft on the tarmac, the rest of the passengers were going to be more than irate.

The purser had to think fast. He then asked Mrs. Castro if she was willing to take the one empty seat on Row 1, probably one of the best two seats on the house. The seat beside it was occupied.

“No, I want to be seated beside my husband, or we both disembark,” she said, not willing to leave her husband on the immovable Row 4 seat.

The purser was left with one last choice. He then approached the passenger on Seat 1C and respectfully whispered something to him. The passenger on Seat 1C then stood up and walked to the Castros with a very apologetic look on his face.

The purser then told the Castros, “Mr. Lucio Tan will give up his seat for you.”

* * *

By this time the Castros had recognized the PAL chairman. They were stunned by his gesture, and by the expression on his face, which seemed to be more apologetic than annoyed. But since Mrs. Castro was not feeling well and could not really go 12 hours without reclining, they accepted the offer to exchange seats with the man who owned the airline.

Castro told me that each time he went to the toilet he would steal a glance at Tan, who was seating upright during the entire flight, sometimes with his eyes closed. Sometimes he would be scribbling on lined yellow paper. He didn’t use a laptop.

Sources in PAL say Tan gave up his seat because he didn’t want the flight to be delayed. It is said that he abhors delayed flights.

Thus, instead of inconveniencing all 400 passengers on the flight, he opted to inconvenience himself.

Granted that his decision was also a sound business decision — the airline would have lost money and a lot of goodwill with the delay — what was amazing was that he himself was willing to bear the cost (and I’m not just talking about a stiff neck) of his decision.

Tan is among the five richest men in the Philippines.

And the Castros remain among PAL’s many loyal customers.

* * *

Friends of Lucio Tan say that before becoming chairman of PAL, the taipan would fly Economy. The executives of his conglomerate would be on Business Class, and would be stupefied to see Tan on Coach. When his red-faced subordinates tried to convince him to move up to Business Class, Tan reportedly told them, “When we land, we will land in the same place.”

When I related the Castros’ story to Tan’s daughter Gigi Tan Yu, she was not surprised at all. “My father is really like that. He really has a heart that wants to serve. Imagine, he is 74 years old and he usually uses the time spent on long flights to rest. But he was willing to forego that and sacrifice his comfort for a PAL passenger.”

(Castro told me that he has encountered PAL executives who would not give up or exchange seats with a passenger).

Gigi also believes that her father “doesn’t want to erase or mask his humble beginnings. He is not averse to self-sacrifice.”

* * *

Nowadays, you hardly hear people complain that PAL is perennially late (remember when people used to joke that PAL stood for three words other than Philippine Airlines?).

Now, we know one reason why. Its chairman would rather seat upright for 12 hours straight than make one flight late.

I was seated beside Castro by chance and just got to know him on the last two hours of our flight back to Manila. But with his permission, I am sharing his story because it shows that humility still exists in high places — literally and figuratively.

(You may e-mail me at

RP touted to have the best aviation school and MRO facility in Asia Pacific

MANILA - Research firm Frost & Sullivan recently categorized the Philippine aviation industry as a niche segment in Pilot training and aircraft maintenance in Asian Aviation.

Pilot training market in Asia Pacific became a $ 10-billion industry in 2008 with compound annual growth rate (CAGR) at 11 percent, according to Frost & Sullivan.

Subhranshu Sekhar Das, Malaysia-based Frost & Sullivan Asia Pacific director for aerospace & defense, said that "In Asia Pacific, there are requirements in pilot training and I'm not surprised if any of the investment is going to be in the Philippines, recruiting new cadets and giving them the training for PPL (private pilot license), CPL (commercial pilot license), or ATPL (airline transport pilot license) licensing."

There has been an upsurge of aviation school opening in the Philippines with foreign students from India and South Korea taking flying courses due to Western style teaching patterned after the United States and English proficient instructions.

Das reported that while there is a current slump in air travel the aviation industry as a whole has been experiencing a shortage of pilots, which drives the market for training he added during the firm's 2009 aviation summit held in Singapore earlier this month.

There are close to 700 pilots in the Philippines and demand is growing. They may have some shortage by 2013. Pilot requirement may have to grow to almost six percent CAGR.

Frost & Sullivan 2008 data showed that China has most of the pilots accounting 37% of the entire Asia Pacific aviation market, followed by India and Japan at 12% market share, while Australia, Malaysia, and South Korea each accounting for 6 percent. Thailand meanwhile has 5%, New Zealand, Indonesia and Singapore has 4% each while The Philippines and Vietnam accounted for two percent of the total number of pilots in the Asia Pacific region last year.

Also, the Aircraft maintenance business, known in the aviation industry as maintenance, repair and overhaul (MRO), is also emerging as another niche for the Philippines.

In 2008, Frost & Sullivan projected the region's overall MRO business to have generated $ 22.55 billion in revenues. It forecasts revenues to reach $ 66.58 billion by 2030, with the commercial fixed wing segment accounting for 54 percent of MRO business from 45 percent last year. By 2030, the global consultancy firm expects diminished markets for the military rotary and fixed wing segments, as well as for civil rotary wing.

Good MRO Performance

Among the US Federal Aviation Administration(FAA) -certified repair stations in the country are FFC Services Asia-Pacific Operations and Honeywell Ceasa Subic Bay Co. Inc., both located at the Subic Bay Freeport Zone; International Aviation Service Assistance at the Clark Special Economic Zone (CSEZ); Moog Controls Corp. at the Baguio ecozone; Lufthansa Technik Philippines (LTP) headquartered at the MacroAsia Special Economic Zone of Villamor Airbase, with operations in Cebu, Clark and Davao; as well as Nordisk Aviation Services Phils. Corp. located in ParaƱaque City.

The 2008 performance of LTP, a joint venture between MacroAsia Corp. and Lufthansa AG initially formed to service the fleet of Philippine Airlines (PAL), boosts the positive outlook on MRO business in the Philippines. In its 2008 annual report presented in March 12, Lufthansa Technik Group announced LTP revenues for the year at 160 million euros (equivalent to P10.6 billion).

Aviation Week, an industry magazine, noted in its report on the financial results that LTP was among the strongest revenue earners in the global network of the Lufthansa Technik Group last year, next only to its sister plant, Ameco Beijing, the latter's joint venture with Air China, and N3 Engine Overhaul Services, the joint venture with Rolls Royce Plc.

LTP is currently providing MRO services from its facility in NAIA to PAL, Lufthansa Airlines, Singapore Airlines, Cathay Pacific Airways and other international airlines that fly to Manila. It also provides technical ground handling services to Air Niugini, China Airlines, Egypt Air, Eva Air, KLM Royal Dutch, Korean Air, Malaysia Airlines, Silk Air and Cathay Pacific Airways.

The Regional Race for MRO Hub

There is a race between Singapore and Malaysia to become the regional MRO hub. Currently, Singapore corners 90 percent of the region's MRO business, but Malaysia and the Philippines is catching up and may eat up Singapore's share in the future.

Currently, work is underway for the 300-hectare Seletar Aerospace Park in Singapore, which it touts to be a world-class industrial park for a wide range of aerospace activities, including MRO, OEM and training for pilots, aviation professionals and technical personnel. It is expected to be completed by 2018.

Meanwhile, Malaysia plans to transform itself into a global aerospace player by 2015 through its Malaysia International Aerospace Center being developed at the former Subang Airport.

Here in the Philippines, a 2,715-hectare Civil Aviation Complex is being developed at the Clark-Subic Economic Zone (CSEZ). The Clark International Airport Corp. announced last year two major locators at the Civil Aviation Complex. These were Kuwait Gulf and Link, which plans to build 125-hectare logistics park, and Singapore Airlines Engineering Co. (SIAEC), a joint venture between Singapore Airlines and Cebu Pacific ,which will locate a 10-hectare MRO facility at the DMIA that will complement existing operations at Singapore's Changi Airport.

"It's all about the country strength and weaknesses and how they are going to position the country to create that environment. There are opportunities in the Philippines. It all depends on how the government is going to attract the investors to set up the industries," Das said.

Since Asia Pacific region can never be an Original Equipment Manufacturer (OEM), it can be a big OEM integrators [that] could also tap the Philippines for Tier 1 or Tier 2 components or parts manufacturing. Manufacturing industries are definitely China and India. Singapore and Malaysia can drive the research and development in other high-tech jobs. The Philippines can probably continue MRO industries, pilot training schools or maybe create the general aviation potential for the other countries.

Other opportunities would also be presented by the massive airport development in China and India until 2020, which could generate design and build projects for Philippine contractors.

But Das noted the country's strongest suit remains with service-oriented segments of the aviation industry due to its skilled workforce and their English language proficiency.

Emirates Airlines launch A380 service to Bangkok and Toronto

Adds new flight to Manila

March 29, 2009

Dubai- Emirates Airline has announced that it will introduce its double decker A380 aircraft on its Bangkok and Toronto routes as well as add flights to Manila. The new A380 aircraft will debut in Canada while the new Thai route extends the aircraft’s presence in Asia after the successful launch of the A380 on Sydney and Auckland in February.

It will also add one more frequency to Dubai-Manila route effective June 1 and intends to fly double daily by end of the year using high capacity Boeing 777-300ER. The airline also intends to fly its 2 class A380’s to Manila when they arrive next year on a twice weekly service.

“Our Toronto route has had consistently high demand since the thrice weekly service was launched two years ago. The A380 will allow Emirates to address some of the unmet need in Toronto while on Bangkok, the A380 will help support the Thai government’s new tourism initiatives,” said Emirates President Tim Clark.

Meanwhile, Emirates recently pulled the new high capacity A380 aircraft off services to New York JFK, choosing instead to serve Toronto citing dwendling passenger load which can be served best by its smaller Boeing 777-300ER planes.

The airline cited more robust demand from Canada, which hosts a large expatriate population of South Asians, a region to which Emirates is well-connected via Dubai. The airline remains hopeful that the Canadian government will allow additional service to Canada to meet the demand for passenger and cargo traffic.

Air Asia not bent on flying Cebu, Davao

Expands to Medan and Phuket instead

Kuala Lumpur - Malaysia's leading budget airline, Air Asia is not inclined to expand its services to other Cities in the Philippines other than its flights in Clark airport, instead it will focus its planned expansion in Thailand and Indonesia this year where it has a subsidiary.

The airline seeks to establish hubs at Phuket in Thailand, Penang in Malaysia and Medan and Bandung in Indonesia to aid its expansion. It however intends to connect Bangkok via Thai Air Asia, and Jakarta via Indonesia Air Asia to the low cost airport situated north of Manila.

The low-cost carrier's spokesman in its Kuala Lumpur headquarters said that the airline group is taking delivery of 14 Airbus A320s during the remainder of this year. Most will be flying for its Indonesian and Thai affiliate carriers.

AirAsia currently has bases in Kuala Lumpur, Bangkok and Jakarta as well as a hub in Denpasar Bali in Indonesia which it opens last year and hubs in Johor Bahru and Kota Kinabalu in Malaysia.

THE Brunei Indonesia Malaysia Philippines-East Asean Growth Area (BIMP-Eaga) Business Council (BEBC) is already communicating with Air Asia for the opening of Davao-Kota Kinabalu route, Antonio Santos, BEBC chair, told reporters in the Philippines.

But the airline said that it may not be ripe to fly the route considering that it has thin traffic. It even has doubts if it can support Cebu flights judging from the traffic figures of Malaysia Airlines. They however admit seeking rights to fly the route in the future but cannot say for certain when they intend to commence service hinting that its not possible within the next two years.

AirAsia was founded in 2001 and is the biggest low-cost carrier in Asia, with about 400 daily flights from hubs in Malaysia, Thailand and Indonesia to more than 60 destinations in Austral Asia and Indian subcontinent.

The airline flew to London Stansted airport on March 11, 2009 as the next low-cost long-haul flights to the UK this time from Kuala Lumpur. The first plane carried a full load of 286 passengers to London’s Stansted airport. Air Asia says it’s considering upping the frequency of the flights from five a week to daily.

Last year, Oasis Airlines, which flew from London to Hong Kong, went bust in April, while Zoom, which flew to the US and Canada, filed for bankruptcy in August. The airline lasted just 18 months before collapsing last year as high fuel costs and intense competition on the Hong Kong-London route dragged it down.

Narita accident Strands 1,600 pax in Manila

Marooned 2 Boeing 747 as a result of DHL crash

March 24, 2009

Four Boeing 747-400 flights going out of Ninoy Aquino International Airport was cancelled after a FedEx MD-11 cargo aircraft crash at 6:49 am (7:49 Manila time) yesterday in Tokyo's Narita Airport and consequently causing the closure of one of its runway and resulting to cancellation of 38 outgoing flights.

The FedEx cargo plane smashed into the runway and burst into a ball of fire while attempting to land killing the pilot Kevin Kyle Mosley, 54, and copilot Anthony Stephen Pino, 49. Aviation Accident Investigators believed that wind shear, an aviation term for sudden gust of strong wind, may have been a factor in the accident.

The airlines that were unable to leave Manila was Japan Airlines flight JL746 scheduled to depart at 9:10, while JL741 which is supposed to arrive in the afternoon failed to depart from the same airport for a return trip. Northwest flight NW002 which was scheduled to leave for Detroit via Narita at 8 am with about 400 passengers, was also cancelled.

Meanwhile, a Boeing 747 Philippine Airlines flight PR431 from Tokyo failed to arrive at 1:30 pm. Its return flight to Narita, PR432, marooned another 400 passengers at the Centennial Terminal 2.

The accident however strands thousands of passengers, half of it bound for the United States, which was left unattended at Terminals 1 and 2. Its been a practice of airlines that in the case of unforeseen event, such as the FedEx plane crash, that the carrier is not responsible for hotel accommodations of stranded passengers or to take care of their food billings, except when the reason for suspension of flight was when the airplane they were supposed to take experience technical problems.

Airline officials said they are doing their best to address the complaints of the passengers. Special flights were operated by the affected airlines today to accommodate the stranded passengers. Flights to Narita from NAIA returned to normal as of yesterday afternoon.

CIAC announced link to Middle East

But are Middle Eastern Airlines biting?

March 24, 2009

Angeles City — Clark International Airport Corp. (CIAC) recently announced commencement of flight from the middle east, and that the airport authority are currently in negotiations with Middle Eastern carriers to link the Diosdado Macapagal International Airport (DMIA) to their respective hub in the Middle East.

The question is, are the famous airlines of the gulf State banking on the call?

Victor Jose Luciano, CIAC President, said on Friday that they “may be getting a major Middle East carrier to fly out of the DMIA” soon but refused to disclosed the airline pending negotiations.

Clark airport has a terminal that can handle up to 2 million passengers. Currently, the Airport accommodated approximately about over a million passengers in 2008, serviced by the following airlines Cebu Pacific, Seair, Tiger Airways, Air Asia, Asiana Airlines, and other chartered airlines.

Its $142-million terminal 2 expansion project remains suspect as its present terminal merely accommodated roughly above 50% of its Terminal 1 capacity or 1 million less of its current projection for 2008 thus making its construction economically non viable at the present.

Already, the capacity of the Terminal 2 has been reduced to a minimum requirement of 3 million passengers per year instead of the previous 7 million passengers capacity for the new terminal project of the airport but nobody is biting the offer until now.

Even Incheon Airport operator Incheon International Airport Corporation(IIAC), which was recently voted as the best airport operator in the world for 4 consecutive terms, begged off to operate the airport for being too ambitious.

The terminal is supposed to be operated under a 70-30 joint venture program but it suffered a snagged when its expected passenger numbers were not met in 2008 despite more than 5 million airline seat offered to the airport.

CIAC meanwhile announced that it is now evaluating Pacific Avia Group, Inc. (PAGI) as possible joint venture (JV) partner in the project that could cost anywhere from P3 billion to P7 billion. CIAC vice president for administration and finance Romeo Dyoco, who chairs the joint venture-selection Committee (JV-SC), said whoever will be CIAC’s partner will “design, finance, construct and operate” the proposed terminal 2 which will increase the passenger capacity of its terminal to 5 million.

Construction however doesn't make sense as its old terminal is far from reaching its full capacity which judging from current statistics, other than that provided by the corporation, is expected to be breached 7 years later or sometime in 2015, and that is for terminal 1 capacity only.
There is no question that DMIA has one of the best logistics and service hub in Asia Pacific and the soon to be primier airport in the Philippines, but its present passenger traffic is substantially dismal in all respect. Making another terminal at this point is just an illusion of grandeur when it can best be served by expanding Cebu International Airport instead.

Asiana flies daily to Incheon, South Korea, with connecting flights to the US; Tiger Airways flies twice daily to Singapore; Air Asia daily to Kuala Lumpur and Kota Kinabalu; Cebu Pacific daily to Singapore, six times a week to Macau, five times a week to Hong Kong, twice a week to Bangkok, and daily to Cebu; and Seair daily to Caticlan for people who want to go to the world-famous island resort of Boracay.

Luciano said that more airlines are expected to mount flights to more countries, particularly to the Middle East, as CIAC has secured entitlements to Kuwait, the United Arab Emirates and Qatar just this year. But the Philippine Airlines code share partner in Qatar and UAE manifested recently its intention of adding flights not to Clark but Manila.

Piatco criminal case ordered to proceed

By Rey E. Requejo

A Manila regional trial court has paved the way for the criminal prosecution of the officials of the Philippine International Airport Terminal Co. (Piatco) for monopolies and combinations in deals involving services at the Ninoy Aquino International Airport Terminal 3.

In a 38-page decision, RTC Judge Virgilio Alameda of Branch 10 remanded the case to Metropolitan Trial Court Branch 9, to determine whether there was probable cause to prosecute the accused.

“The trial court failed to make an independent evaluation or assessment of the existence of probable cause, much less, an evaluation of the evidence supporting its findings,” he said, adding that “the determination of probable cause after the filing of an information in court is a legal duty vested in the trial court for purposes of issuance of a warrant of arrest.”

Alameda also ruled that the private complainant in the case had legal status to pursue the case, pointing out that “the crime involving violation of Article 186 of the Revised Penal Code is admittedly a crime against public interest and the private complainant has invoked his right to intervene in the criminal case or to bring this appeal before this Court which in his view is necessary to defend public interest.”

Among the accused in the case filed by lawyer Jose Bernas are Piatco officials Dr. Wilhelm Bender, Bernd Struck, Remy Tigulo, Oscar Lopez Dee, Rolando Esguerra, Jefferson Cheng, Stephan Bauchspiess, Cheng Yong, Hiroshi Kanematsu, Lim Kwee Siah, Henry Go, Tony King, Nilo Pena, Antonio Pacis and Jose Perpetuo Lotilla.

The suit was filed in 2003 after investigators found that Piatco officials agreed to monopolize catering, cargo-handling and other airport-related services at the terminal.

The firm also wanted only its affiliates to be Terminal 3’s service providers.

The case was filed before the lower court after state prosecutors initially found enough basis to go to trial.

But after the Department of Justice overruled the finding, the public prosecutor moved to withdraw the case, which was granted.

Is Manila Recession Proof?

Manila Bound Airlines buoyed by low yield strategy

March 22, 2009

Decisions of Philippine Airlines to drop its first class service might now be seen as blessing in disguise as Asian heavyweights grapple for dwindling premium traffic which plummeted to almost 25% International Air Transport Association (IATA) figures showed. Within Asia, IATA found that premium travel was down 23.4 per cent while there had been a decline of 24.7 per cent across the Pacific.

Premium airlines in Asia Pacific may cut more flights as demand from high-value passengers continues to decline sharply. IATA said there was a 16 per cent decline globally in travellers flying premium classes in January and the drop in Asia was the steepest - at 23 per cent.

According to Tony Tyler, chief executive of Cathay Pacific, has warned that the Hong Kong carrier might need to take “very difficult decisions” to be sustainable. Mr Tyler told staff in a newsletter that revenue outlook was “very poor” and it could take a long time before the carrier reached the bottom of the market.

Cathay Pacific, which reported the biggest annual loss this month in its 63-year history, has cut capacity, grounded flights, delayed the construction of a cargo terminal and offered staff unpaid leave.

Peter Harbison, executive chairman of Center for Asia Pacific Aviation (CAPA), said Cathay Pacific was not alone in contemplating wholesale changes to its strategy as the global economy struggles. Singapore Airlines saw a 20 per cent decrease in passenger numbers in February compared to a year ago. These dropped more than 20 per cent or by nearly 300,000 passengers in February compared with the same time last year.

He said that airlines may have to reschedule their equipment needs. Basically, “there will be a fundamental re-examination of the entire network model.” Grounding of aircraft may not be the best option as it would cost more than $400,000 a month to ground a single commonly used aircraft.

In contrast, Philippine Airlines, which adopted a different model, by taking off first class altogether continued to enjoy its traffic boom by registering a healthy load factor, this time announcing more flights to Vancouver while Singapore suspended it. In fact, majority of the airlines operating out of Manila are growing as new and additional flight schedules are announced, yet Manila is and never was a premium destination, having the lowest of the yields next to Indonesia among Asia Pacific countries. None of the legacy airlines operating in the Philippines announced suspended or reduced flights up to this date.

Having low yields is not however a cause for concern as airline operators flying out of Manila always managed to fly its aircraft full which make it a profitable destination, only that its not that big as having premium passengers on board. Tyler previously said that 1 premium passenger is equivalent to 5 economy class passengers, and as long as they can fill all the economy class they will continue to earn and to do that they have to reduce fares just to compete with low cost carriers.

Mr Harbison said that Cathay and Singapore airlines were particularly vulnerable because of their much heavier reliance on the premium market and its over reliance with Europe where bulk of premium passengers came. Premium travel between Europe and Asia was down 21.2 per cent.

Middle Eastern airlines continue to ride the wave because like, PAL, it too does not offer first class service to Manila and it always got its aircraft full when its leaves the Philippines. Even Europe bound KLM was not affected by the decline since it carried non premium passengers which may now include business travellers on travel downgrade. Data from Civil Aviation Authorities in the Philippines showed positive growth with more outgoing passenger traffic than incoming ones. Its projection of zero growth this year is even better than Bangkok, Hong-Kong and Singapore which expects a further decline.

It remains to be seen whether other airlines in the Asia-Pacific region can continue to survived the downward trend. Some may only be weeks away from grounding more aircraft from its fleet. It is projected that as much as 10 per cent of their aircraft will be grounded by the second half of the year as they grapple with weak revenues, falling load factors and excess capacity.

Meanwhile, Philippine Airlines suffers an acute shortage of its fleet, unable to ferry passengers whenever one of its Wide-body jets for long haul destinations, particularly the United States, suffers an unexpected problem that needs to be grounded for repair. Its expansion to the US was also constricted by its category 2 status of the FAA. It remains to be seen whether their new aircraft that is slated for delivery in November can ever fly to the US as originally planned. PAL intends to fly double daily by November to Los Angeles, and new service to San Diego as well as Chicago in 2010.

The International Air Transport Association, the international trade body representing 230 airlines, this week found that Asia was the worst affected region in terms of premium traffic reductions in the month of January.

Etihad finds code sharing opens up a new world

The Philippine Airlines PR

By Ivan Gale

A wide variety of code-sharing agreements has enabled Etihad Airways to position itself for growth over the next few years. Andrew Parsons / The National

If doing more with less is the mantra of the business world nowadays, then Etihad Airways should win high marks for using aircraft and networks of other airlines for its own advantage. It is using one tool – the airline-to-airline code share – to not only bypass restrictive bilateral air rights, but also to minimise risk in these uncertain times, and put it on more solid footing in rivalling Emirates Airline.

In the past two years Etihad has whipped up a blizzard of code-sharing alliances, growing from three deals to 14. The focus on these tie-ups is largely due to James Hogan, who joined as chief executive in October 2006.

A code share is an agreement between two airlines that allows them to share resources. It lets them both put their code numbers on a single flight. Both can sell tickets for the flight, regardless of which carrier’s aeroplane and crew are being used. Both are also able to offer frequent-flier miles to their customers, and the two also share the revenues.

With existing code-sharing arrangements with Middle East Airlines, bmi and Brussels Airline forged by previous management, Mr Hogan has ratcheted up the pace. New partnerships were formed with Aer Arann, Bangkok Airways, Jet Airways, Kuwait Airways, Malaysia Airlines, Philippine Airlines, Royal Air Maroc, Saudi Arabia Airlines, Sri Lankan Airlines, Yemen Airways and, last week, Qantas.

The real advantage for Etihad is that it is able to use other airlines to feed travellers into its high-yield flights to Europe, Australia and the US. In Ireland, an Aer Arann customer would be able to book one ticket to Sydney flying from Cork to Dublin on Aer Arann and from there using the Etihad network.

While deals with small outfits arouse little mention in the press, the Qantas deal has caught the imagination in Australia due to the implications that Qantas and Eithad are joining forces to compete with Emirates Airline.

Qantas has no service to the Middle East, while Etihad is just tapping into the Australia market with flights to Sydney, Brisbane and, from next week, Melbourne. Instantly, the two are able to offer to their customers destinations that were previously available only on Emirates.

With the tie-up, Etihad customers can fly to Melbourne and then hop on a Qantas flight to Auckland, and rack up Etihad frequent-flier miles in the process. Qantas customers can now fly to Amman and Beirut on Etihad while gaining their own loyalty miles. “The announcement addresses a weakness in the flying kangaroo’s network that Emirates has aggressively exploited,” said one newspaper article, referring to Qantas by its popular nickname.

Etihad is also using code sharing to circumvent restrictive landing rights that foreign governments have placed to protect their own airlines. The Abu Dhabi-based airline’s stated aim used to be flying several flights a day to Mumbai, as Emirates does. But India and the UAE are yet to agree on the increased air rights. So what Etihad did was turn to Jet Airways for a code share and feed more Indian travellers onto its flights to Europe and the US.

The same goes for its tie-up with Philippine Airways. At the time, Etihad had rights for only five flights a week. With the code share, Etihad is able to sell tickets on two additional flights, operated by the Philippine carrier, and offer its customers the all-important daily service.

The tie-ups work especially well in these uncertain times, with passenger demand falling sharply in recent months. Etihad can offer more flights while using fewer resources and aircraft. It has less to lose in a down market when the seats go empty, although it also has less to gain in an up market when it shares revenues with the other airline.

Emirates’ strategy of launching non-stop, direct services on wide-bodied aircraft to points all over the globe meant it profited hugely from the recent global economic boom to earn US$1.37 billion (Dh5.03bn) in net profits in 2007-2008.

However, Etihad has 100-plus aircraft on order, which will give it the muscle it needs to fly its own routes when demand returns. At only five years old, Etihad is a relative newcomer to global aviation. It has grand aspirations to increase its passenger numbers from six million last year to 25 million by 2020, but growing an airline is fraught with risk.

Adding new routes depends on government-to-government talks on air rights and the availability of expensive aircraft. Since new routes take three to five years to become profitable, there is a real risk of overextending yourself due to the cyclical nature of air travel.

Etihad’s mix of new aircraft deliveries, plus an active code-sharing policy, will help it in the fluctuating times ahead.

Airbus 380 in Focus

Airbus racks up 200 orders for the A380

Airbus reached an important milestone for its A380 programme in February when the addition of Korean Air's deal for two more aircraft brought total firm orders for the giant to 200 aircraft.

The double-decker has had a bumpy ride over the past eight years to achieve this tally, with production problems resulting in an 18-month delay and contributing to the suspension of the freighter, costing 22 orders. But Airbus is satisfied with its showing so far, says head of A380 product marketing Richard Carcaillet: "The 200 orders from 16 customers is a good base. We are well on the way to occupying this market segment with a big majority compared with our competitor."

Launched in December 2000 to compete in a potential market over 20 years for 1,200 very large airliners, the (then) $10.7 billion programme secured its first firm contracts in March 2001 and a flurry of sales saw orders break the 100 mark two years later. However, the order rate has slowed since then as the birth pains combined with the traditional airliner sales cycle, where there is a lull in order activity during the transition through flight-test and service-entry phases.


While the A380's order pace since launch has been slower than that of the Boeing 747 four decades ago - the original Jumbo Jet reached 200 orders within four years of its 1966 go-ahead - the new "queen of the skies" is competing in a very different sales environment, says Carcaillet. "Remember that was the 'swinging 60s', while we had 9/11, which is part of the equation. But compared with the 747 at the beginning, we've had larger commitments and bigger votes of confidence right from the start from major airlines."

Despite the freighter setback, Airbus has maintained a positive order flow and destroyed any threat from Boeing's 747 - in the passenger market at least - and production is sold out until 2014.

Boeing ultimately sold over 1,400 of the original 747 (prior to the stretched -8 family), and there are around 400 747-400s flying in the passenger role. Airbus has already captured nine of the 16 leading -400 operators, including British Airways, which has the largest fleet. The A380's success in this hard-fought campaign dealt a crushing blow to Boeing's struggling 747-8I programme, which still has just one airline customer to its name.

"Our long-term forecast of 'open demand' predicts that just the existing A380 airline customers alone will have a need for 400 large aircraft over the next 20 years, in addition to the 189 A380s already on order," says Carcaillet. "The market will be bigger than today's 747 market."

But despite its orders double-century, some analysts remain unconvinced that the A380 is a success: "It turns out that everyone, even Boeing, overrated the appeal of large airliners," says Teal Group's vice-president analysis Richard Aboulafia. "Since the A380's launch there have been 200 orders, plus about the same number of 747 orders [including freighters], and nearly 3,000 smaller twin-aisle jets. This is no longer a debate. The market has been quite eloquent."

Although Airbus has racked up a good spread of customers for the A380, it concedes that it has been more reliant than it had predicted on one customer - Emirates - which alone accounts for more than a quarter of all orders (58 aircraft). "You always have airlines like that, which play a pivotal role in an aircraft programme, like Pan Am did with the 747," says Carcaillet, who predicts that "definitely more than two or three airlines" will eventually have A380 fleets totalling around 50 aircraft.

But Aboulafia thinks the heavy reliance on Emirates and its local rivals should be a concern to Airbus: "One-third of the orderbook comes from a region that depends on very high growth rates yet has just seen a negative month and six slow growth months.

"Some Middle-East deliveries will certainly get stretched out. The current ramp-up schedule might soften further due to deferrals and production issues."

Airbus's chief salesman John Leahy said in January that, given the current environment, near-term demand for the A380 would be sluggish with only around 10 new orders coming through this year. With All Nippon Airways having suspended its large aircraft evaluation, it is difficult to see where any major new business will come from in the near term - for either the A380 or 747-8I.

Although Carcaillet insists Airbus is engaged with "some serious new prospects", Aboulafia believes the best it can hope for "is incremental purchases from existing customers. This is basically a two a month programme after they ramp up to deliver some, but not all, of the up-front orderbook."

Etihad Announces additional flight to Manila

Expects to carry 7 Million passengers in 2009

March 20, 2009

Abu Dhabi - The national airline of UAE intends to carry more passengers to the Philippines this summer as additional aircraft arrives to join its fleet of more than 40 jets.

"The airline will expand its global flight network to 55 destinations as well grow its fleet to 52 aircraft in 2009," said James Hogan, the airlines Chief Executive Officer.

He added that "11 new passenger aircraft are set to join Etihad's fleet in 2009, which would enable it to launch services to Melbourne, Istanbul, Athens, Larnaca and Chicago, as well as increase frequencies on many existing routes across its network of international destinations".

A total of 900 flights will operate this summer which is 20% more than the current 750 fligts. Manila and Kuala Lumpur maintains a load factor of more than 90% despite the economic slowdown and another Boeing 777ER will be flown there when it arrives.

Currently Etihad has a fleet of 44 narrow and wide-body aircraft which will rise to 52 by the end of 2009. The new additions consist of two Airbus A330-200s, one A330-300, two A340-600s, five A320-200s and one Boeing 777-300ER.The airline will fly to Melbourne on March 29 and the route will be flown by an Airbus A340-600, configured to carry 292 passengers and 15 tonnes of cargo. The addition of Melbourne, will joins Sydney and Brisbane, as its destination in Australia. Larnaca in Cyprus is slated to be open in June.

The introduction of flights in June to Istanbul, Athens and Larnaca, as well as increases in frequency to Brussels, Geneva, Milan and Moscow, means that Etihad will offer its customers a choice of 98 weekly flights into 14 European countries.

"We are bullish about our prospects this year even though the market is very tough. We will be monitoring the market every week, month and quarter and will evolve appropriate strategies to meet our targets" Hogan said.

The first commercial flight operated by Etihad was in November 2003. The 6 years old airline operates 50 international destinations in 2008.

The Philippines and United Arab Emirates recently amended its Air Service Agreement in January to handle and accommodate increase traffic from both countries.

Mactan airport suffers drop in international passengers

But enjoys domestic boom

March 19, 2009

CEBU CITY – The Mactan Cebu International Airport (MCIA) recorded a 4% drop of International flights compared to previous period last year, said Danilo Francia, MCIA general manager saying further that the airport is starting to feel the heat of the economic global crisis.

The figure is the first officially recorded report of the slow down that was predicted by the International Air Transport Association (IATA) to hit this year.

Francia note that the decline in international arrival was however compensated with a 20-percent increase in domestic flights at the airport for the same period in January. There were 3,013 inbound and outbound domestic flights at the MCIA, which translates to about 303,412 serviced passengers.

The international flights on the other hand showed 688 inbound and outbound flights at the MCIA. This means that 89,518 passengers were serviced by the airport in January, according to the traffic movement statistics made by MCIA statistician Eric Briones.

In contrast, tourism figures painted a different statistics. The number of foreign tourists directly arriving at the Mactan-Cebu International Airport last January grew 5% year on year to 36,653.

“We were surprised at the figures because of the very significant increase,” said Department of Tourism Undersecretary Phineas Alburo.

Foreign tourists from mainland China arriving in Cebu last January increased 204%, while visitors from Hong Kong rose 163%. In addition to the growing number of Chinese visitors, Russian tourists also increased 133% and Indians by 108%. Russians come during their winter period to stay for 12-15 days, while Indian tourists stay for an average of 20 days.

The figures are based on the records of the Bureau of Immigration regarding the number of tourists who landed at the Mactan-Cebu International Airport, said Alburo. “The industry has not been affected that much. The tourism industry in Cebu continues to be vibrant, and tourism-related businesses continue to hire people,” said the Cebuano undersecretary.

The airport and tourism statistics can however be reconciled, as majority of the foreigners arrived on domestic flights from other regions in the country that their entry can be attributed either to Manila International Airport, Clark International or Kalibo International airport, which all registered positive growth. All airports have flights going to Cebu and vice versa.

Alburo continued that Philippine Airlines will launch a direct Manila–New Delhi flight by August to capitalize on the growing Indian market. The flights could be accelerated depending on the response of the market, he said.

In 2008, the airport served 21,969 domestic flights carrying about 2.997 million domestic passengers while international flights totaled 6,436 flights which carried 994,136 passengers. MCIA handled about 3.991 million passengers in total. It also service 52,691 aircraft in the airport in all categories. The airport terminal has a designed passenger capacity of 5 million passengers, with 3.5 million devoted to domestic operations.

In 2007 it handled 3.14 million passengers and served a total of 48,364 aircraft for domestic, international, general aviation, and military planes.

Despite the global economic crisis of year 2008 aircraft movements recorded a growth rate year on year of 13% for domestic and 3% for international over 2007. The volume of domestic passenger grew by 8% and 3% for international. But international cargo volume declined by 9% and 8% for domestic compared a year ago.

Qatar Flies Double Daily

Introduces new Boeing 777ER to Manila starting March 29

March 19, 2009

Doha - National carrier Qatar Airways upgrades its service to Manila earlier than expected as it start to fly its new Boeing 777-300ER to Manila on a double daily service starting March 29 amidst wordwide recession on air travel.

“Qatar Airways’ robust expansion is continuing undeterred by the current economic climate,” said Chief Executive Officer Akbar Al Baker, addressing a packed press conference on the opening day of ITB Berlin.

The Philippines remained the only Asia Pacific country that registered positive growth in 2008 despite a 24% slump in aviation travel in the region based on IATA figures.

Qatar Airways is the second airline to announced earlier than planned operations to Manila. Earlier, Afriqiyah Airways of Libya was the first airline to announced 2 months earlier flight than what was originally scheduled citing tremendous backlog of OFW traffic to the middle east. But Qatar Airways will be the first airline to expand in Asia Pacific this year amidst slump in the aviation industry and the first airline to expand its operation out of Manila. Dubai based Emirates Airlines and Abu Dhabi airline, Ethihad, of the UAE is also expected to announce double daily service within this year.

The airline is gradually stepping up capacity from March 29 to eight cities – Geneva, Kuala Lumpur, Manila, Lagos, Muscat, Mashad (Iran), Tunis and Algiers. The frequency increases will see the Philippines capital of Manila being served with two daily flights, up from the current 11 services a week; Nigeria’s commercial capital of Lagos going from five services a week to daily; and capacity to the Omani capital of Muscat rising from 15 to 21 flights a week, said Al Baker.

The triple seven ER plane has a seating capacity of 335, with 42 in business and 293 in economy class. The aircraft is the 10th triple seven plane which is scheduled for delivery on the last week of March from Boeing factory in Seattle.

Australia agrees 6,000 new seats for the Philippines

Jetstar ready to meet Cebu Pacific

Canberra, Australia - Australian regulators agreed to expand its bilateral air service agreement with the Philippines allowing 6,000 a week passengers from 2,500 per week which is more than twice as many as that approved in 1996. Australia and the Philippines has its first bilateral in 1947.

Transport and Communications Secretary Doroteo Reyes II said that the draft air services agreement was signed by Philippine and Australian transportation officials on March 13. The agreement, he said, updated the deal originally signed in 1996.

According to Civil Aeronautics Board Executive Director Carmelo Arcilla, the new deal allows the government to distribute the 6,000 seats among airports in Manila and Clark, Pampanga to Sydney, Melbourne, Brisbane, and Perth.

"The 6,000 is the total allocation for Manila and Clark combined. We can set how many airline passenger seats each airport will get. But the cargo tonnage was set. It's 300 tons for Manila and 1,300 tons for Clark," Arcilla said. The new agreement can accommodate 2 daily B747 on each side or 3 B777/A330, 0r 4 B767, respectively.

Flights between other regional airports in Australia and airports in the Philippines as to capacity or frequency remains unrestricted. Philippine Airlines and Qantas has rights to fly Darwin and Davao in the previous bilateral but remained unserved.

In the agreement, local airlines were also given fifth freedom traffic rights, with right to pick up passengers in Australia before flying to another destination in another country particularly New Zealand, except Singapore and the United States. Philippine Airlines intends to use Sydney and Melbourne for its new flight to New Zealand under the new bilateral.

Australian carriers can pick up passengers from the Philippines en route to Port Moresby and another point, but the final destination must be any of the following: Hong Kong, Japan, India, Bahrain, Iran, Greece, Austria, France, the United Kingdom, and two additional points to be nominated, except the US, Canada and China. Flights going to Japan, however, were restricted to 2,500 seats each per week.

Qantas on the other hand is interested to commence another kangaroo route from London to Sydney alternate days Melbourne via Manila. The airlines kangaroo route currently fly to Singapore, Bangkok, and Hong-Kong. The Philippine government used to close access to Hong-Kong and London in the previous bilateral. Qantas is also reviving its plan to fly to Paris via Manila. Currently, there is no airline in Manila that flies to Paris after the Air France-KLM merger in 2004, and London after British Airways suspended flight in 2001.

With the additional seats, Arcilla said more airlines will be given an opportunity to fly to Australia. In the previous arrangement, only the Philippine Airlines was the designated carrier for the said route. Currently, both Philippine Airlines and Qantas held 2,500 seats from points in Manila to Sydney, and Melbourne. Philippine Airlines has yet to resumed its service to Brisbane while its negotiating for access to Perth.

"Cebu Pacific and Zest Air are interested (in getting entitlements)," he said, adding that foreign carrier Jetstar has also expressed interest in mounting Philippine flights to Australia. Jetstar subsidiary, Jetstar Asia flies Manila and Singapore daily with connections to Darwin.

"We welcome the developments in the recent RP-Australia air talks. We are always looking for new destinations that we can include in our route network expansion," Candice A. Iyog, vice-president for marketing of the Gokongwei-led Cebu Pacific, said.

Both Cebu Pacific, which is negotiating a Boeing 777, and Zest Airways which is also negotiating for Boeing 767 manifested its intent to fly wide-body aircraft if their application to fly to Australia is approved.

Australia is one of the top sources of tourists in the Philippines. Successful air talks are helpful in boosting the economy as it paves the way for more tourists and investments in the country.

The Philippine negotiating panel, led by Transportation and Communication Undersecretary Doroteo A. Reyes II, included representatives from the departments of Foreign Affairs, Trade and Industry, and Tourism, as well as the Civil Aeronautics Board and airport authorities.

The Australian air panel, meanwhile, was headed by Iaian Lumsden, director of the bilateral aviation and airports division of Australia’s Department of Transport and Regional Services.

Zest Air spends $400 Million for new capital investments

Adds Five new Jets to its fleet

March 18, 2009

Los Angeles, CA. - Zest Airways, Inc., formerly Asian Spirit, is investing $150 million more this year for the acquisition of five brand new aircraft to beef up its existing seven aircraft as the company adds new local destinations and regional routes.

The Zest-O group of companies, owned by businessman Alfredo Yao, acquired Asian Spirit, a small airline company based in the Philippines last year, and is carrying out an aggressive expansion program amid worldwide economic downturn.

The airline seeks to have 3 brand new Airbus 320 and 2 Boeing 767-300 aircraft as part of its second wave of expansion that will bring Zest Air fleet to 11 aircraft by yearend, flying major tourist destination areas in the country. The investment is on top of the $170 million capital expenditure made last year by the company.

Chairman Alfred Yao is anticipating a business boom in the tourism industry within the next two years. He cited the advantages of the Philippines as a regional tourist destination. He said that it’s cheaper for tourists coming from China, Korea and Japan to travel to the Philippines than to the USA and Europe. ‘Within the year the company is expected to launch its regional routes that may include Hong Kong, Macau, Beijing, Xiamen, Kota Kinabalu, Kuala Lumpur, Singapore and Japan" he said.

Donald Dee, president of Zest Airways, Inc. said the new airbuses will be serving existing and new destinations. The Boeing planes will service the Middle East and Australian market. ‘We have a good fighting chance, we are competing head-on already with the two big market players for Caticlan and Cebu" Dee added.

Zest Air currently flies to Caticlan, Busuanga, Calbayog, Catarman, Marinduque, San Jose and Virac from Manila. It started flying new routes to Iloilo, Legaspi, Naga, Puerto Princesa, Davao, Kalibo, Tacloban and Tagbilaran.

Zest Air application for rights to fly the Middle East, particularly Kuwait and UAE is pending approval by foreign governments while its request to fly to Australia is currently applied following new bilateral agreement between Australia and the Philippines.

RP’s aviation safety still below FAA standards

March 17, 2009

By Conrado Ching

The country’s international civil aviation safety standards remain below those of the US Federal Aviation Administration, more than a year after the FAA downgraded the Philippine’s rating to Category 2.

The drop in the country’s rating to Category 2 from Category 1 means the country’s civil aviation authorities do not provide safety oversight of its air carriers in accordance with the minimum safety oversight standards of the International Civil Aviation Organization (Icao).

The Icao is a specialized agency of the United Nations created in 1944 to promote the safe and orderly development of international civil aviation throughout the world.

While the Air Transportation Office was renamed Civil Aviation Authority of the Philippines (CAAP) in a bid to improve the local aviation industry, the CAAP still failed to implement improvements in aviation safety.

An airport source said they have not seen any improvement in the country’s aviation industry since the country’s rating fell to Category 2.

Manila International Airport Authority (MIAA) general manager Alfonso Cusi, however, said that despite the rating, the Ninoy Aquino International Airport (NAIA) terminals continue to remain a world-class international airport in terms of management, operations and services.

“The NAIA is compliant with the standards prescribed by the ICAO. There is no cause for alarm because the NAIA remains capable of efficiently and safely servicing local and international carriers,” Cusi said.

He said that flight operations at the NAIA Terminals 1, 2 and 3 remain normal and safe to the public, especially to passengers.

“It’s business as usual and we will continue to maintain all amenities and courtesies due to airline passengers, especially tourists, returning residents and expatriates,” Cusi said.

“NAIA was not downgraded. What was re-categorized was the rating of the country’s international civil aviation safety standards, which falls under the responsibility of the CAAP,” he said.

“Like all other international airports worldwide, the NAIA undergoes periodic assessment by the Icao and the US Transportation Security Administration, and it has passed all tests for security and efficiency,” the airport chief explained.

The MIAA official said they are extending all kinds of support to the CAAP with regards to its operational, financial and strategic concerns with the hope of raising the FAA rating back to Category 1.

Under the Government Quality Management Program the NAIA has reportedly institutionalized the standards and qualities required by the International Organization for Standardization (ISO) for the structure, mechanism and procedures of international airports the world over.

The so-called ISO 9001-2001 Quality Management System at the NAIA is by far the world’s most established quality framework, now being used by nearly a million organizations in 161 countries, Cusi said

“It sets the standard not only for quality management systems, but management systems in general to enable organizations to succeed through improved customer satisfaction, staff motivation and continual improvement,” Cusi added.

Driving lessons


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Eighty passengers on a domestic flight narrowly escaped disaster in Bicol over the weekend. Only the deft handling by the pilot of the Cebu Pacific flight kept the plane from colliding with a Lite Ace van on the tarmac of the Legazpi City airport Saturday afternoon. French pilot Christopher Nowioki managed to make the plane climb back up moments after it touched down.

What was the van doing on the tarmac? An airport VIP, the son of the head of the local office of the Civil Aviation Authority of the Philippines, was teaching his girlfriend how to drive, according to reports from Legazpi. For Luis Sto. Domingo Jr., nothing less than an airport tarmac would do for the precious driving lessons. The younger Sto. Domingo also reportedly used the tarmac as access road to his home.

There was no immediate comment yesterday from the privileged driving tutor’s father, Frisco Sto. Domingo, probably because Legazpi City Mayor Noel Rosal was fuming over the incident. Rosal was at the airport to welcome Tourism Secretary Ace Durano, who was on the Cebu Pacific flight, and was surprised when the plane took off as soon as it touched down.

Apart from vans where private driving lessons are given, it would not be surprising to see cattle, dogs and goats on Philippine airport tarmacs. In several airports, children can enter the airport grounds from shanties straddling the perimeter walls. As the case in Legazpi showed, tarmacs can also be used as access roads to private residences.

Mayor Rosal is seeking immediate sanctions on the elder Sto. Domingo. The driving tutor must also be held liable for entering a restricted area and endangering the safety of a commercial flight. Unless sanctions are imposed, this dangerous incident will be dismissed as Pinoy comedy and may be repeated. And the next time, disaster may not be averted.

CAAP vehicle crossed runway unauthorized, Endangered ATR final approach

Mayor wants entire Civil Aviation Authority office in Legazpi City sacked

By: Rhaydz B. Barcia

LEGAZPI CITY: Following a near-disaster incident at the Legazpi City Domestic Airport on Saturday afternoon involving the son of Civil Aviation Authority regional director Frisco Santo Domingo Sr., Mayor Noel Rosal recommended to Department of Transportation and Communications Secretary Leandro Mendoza the removal of the entire CAAP personnel immediately here.

Besides 72 CAAP personnel the Philippine National Police (PNP) aviation security group (PNP-ASG) personnel are also in hot water due to their negligence and inefficient security measures for allowing the son of director Frisco Santo Domingo Sr., to drive a car and cross the airport’s runway despite the regulations set by the air transportation authority.

The PNP-ASG led by Supt. Emma­nuel Talento is a support unit overseeing the security and other procedural matters to ensure safety measures within the airport premises.

“I was fuming mad. If not for the alertness and presence of mind of the French pilot, it could have been a major and catastrophic air disaster in the country specifically in Legazpi City for the first time,” Rosal said.

The Cebu Pacific flight 5J172 was fully loaded with 88 passengers that included Tourism Secretary Ace Durano and members of his family.

Mayor Rosal and Tourism director of Bicol Maria Nini Ravanilla were then at the arrival area of the domestic airport to welcome Secretary Durano.

Mayor Rosal said that manager Santo Domingo was not in the office when the incident occurred.

“I talked to the pilot of Cebu Pacific, he told me that it could have been a major air tragedy. It was the pilot’s split second decision that aborted the landing. I recommended the immediate removal of Santo Domingo and his staff for negligence and poor management,” Mayor Noel Rosal told The Manila Times.

Mayor Rosal who had witnessed the near air disaster along with Tourism director Maria Nini Ravanilla of Bicol said Santo Domingo is liable for his serious negligence. Despite strict policies, a Lite-Ace van with his son driving crossed the runway of Legazpi airport.

“How could he allow his son to use the runway as access road? I am the mayor here and I respect the airport’s policy,” said Mayor Rosal.

Unconfirmed reports said that Frisco Santo Domingo Jr., suddenly crossed the airport runway to show off to his girlfriend that he could use the airport runway as access road on their way to the civil aviation office. But local authorities here neither confirmed nor denied the report.

SPO1 Romulo Letada Jr., said the gray Lite-Ace van with plate number RBX103 driven by Frisco Santo Do­mingo Jr. crossed the runway shortly before the arrival of the Cebu Pacific flights from Cebu-Legazpi vice versa.

Capt. Christopher Nowicki, a French pilot of the Cebu Pacific aborted and maneuvered the landing plane upwards to evade a gray Lite van that suddenly crossed the runway to prevent major air tragedy.

Immediately after the incident, Nowicki proceeded to the aviation security police office and filed a complaint. An unverified report stated that a lone employee was in charge of the control tower instead of three personnel working altogether at the time Nowicki went to the civil aviation authority office to file his complaint.

It was pointed out that had Nowicki’s plane been a jet, not a propeller-driven one it could have been very hard to abort the landing.

San Fernando Airport Reopens

GMA inaugurates expanded airport

March 16, 2009

San Fernando City, La Union -- San Fernando airport officially re-opens to the public today with President Gloria Macapagal-Arroyo inaugurating it, after undergoing Php 478 million upgrade aimed to accommodate international flights from the Asia-Pacific region namely China, Taiwan, Japan, Hongkong, Thailand, Malaysia, Singapore, Indonesia, Vietnam and Korea.

Bases Conversion and Development Authority (BCDA) President and CEO Narciso Abaya, said the resumption of operations of the San Fernando airport will further strengthen Poro Point’s appeal in attracting more investments and tourists, thereby generating more job opportunities for the people of La Union. “Increased investments and tourist spending augur well for the economy of La Union,” Abaya said.

The San Fernando Airport is part of the Poro Point Special Freeport Zone (PPSFZ) being managed by the Poro Point Management Corporation (PPMC), a subsidiary of the Bases Conversion Development Authority (BCDA) which bankrolled the P565-million airport upgrade project.

It sits on a land area of approximately forty (40) hectares situated on barangays Canaoay and San Francisco, of San Fernando City. Among the phase I components that were completed under contract with SATRAP Construction Company, Inc. includes:
1. the removal of hill obstruction;
2. strengthening, extending and widening of the runway from 1320 meters by 36 meters to 2100 meters by 45 meters;

3. strengthening of existing apron and construction of taxiway;

4. construction of drainage lines;

5. construction of control tower;

6. rehabilitation of the Fire Station building;
7. construction of water receiving station;

8. construction of Power House building;

9. completion of perimeter fence;

10. provision of utilities such as power supply, water supply system and fire water supply system; and

11. provision of Air Navigation and Support Facilities such as Aeronautical Ground Lighting System, Automated Weather Observation System, Air Traffic Control Equipment.

The airport project was designed by Scheme Konsult, Inc. and was completed on February 1, 2009, a total of 615 calendar days, or almost 2 years of construction. Phase II involves construction of the terminal building.

PPMC president Felix Racadio said that the new international standard airport facility complies with relevant standards and recommended practices of the International Civil Aviation Organization(ICAO), the International Air Transport Association (IATA) and the U.S. Federal Aviation Administration (FAA), and is certified to be capable of handling aircraft as big as Boeing 737 and Airbus 320.

The upgrading of the aerodrome at the airport aims to support the development plan of the Poro Point Freeport Zone, consisting of the Wallace Air Station, San Fernando Seaport and Airport and other contiguous areas, as an alternative international gateway to northern Luzon.

PPMC executive vice president and chief operating officer Anthony C. Manguiat said the resumption of airport operations was expected to further increase passenger and cargo traffic which, in turn, would boost the economy of La Union and neighboring provinces.

“The San Fernando airport will complement the already existing international seaport, thus making Poro Point an ideal site for commerce and tourism,” Manguiat said.

PPMC vice president for airport operations Catherine Bada said that at present, all flights to San Fernando are chartered planes. She revealed that negotiations are going on with commercial airlines for regular domestic flights between Manila and San Fernando, A Manila-San Fernando averaging about 50 minutes.

She added that 15 flying schools are currently using the airport for cross-country training flights.

Asian Spirit (now Zest Air), used to fly 3x per week service before the airport was closed for upgrading.