PAL's Best Deal went Kaput!





A sweet deal turns sour

Who says people are cutting back on unnecessary expenses these days, particularly on foreign travel? Not the people at Philippine Airlines, who were so swamped with passengers who wanted to buy tickets to their two-day, online-only seat sale that their Web site all but shut down.

If you’re one of the few who actually purchased a PAL “Real Deal” half-price promo ticket, consider yourself lucky. Those who didn’t get in on the sale, which started last Monday and ended yesterday, are still railing at the airline for limiting the promo to those who booked flights to PAL destinations using their credit cards through the company’s Web site—which by yesterday was virtually, pun intended, inaccessible due to the number of people who still wanted to buy tickets through the Internet.

It was an offer many thought they could not refuse. Round-trip tickets from Manila on PAL were sold at $38 to Taipei, $58 to Hong Kong and Macau, $78 to Bangkok, Saigon and Singapore, $108 to Beijing, Jakarta and Shanghai, $148 to Guam, $162 to Tokyo, Fukuoka and Nagoya, $318 to Sydney, Melbourne and Honolulu, and $418 to Las Vegas, Los Angeles, San Francisco and Vancouver.

There were the usual restrictions, of course. Taxes and airport fees still had to be paid and confirmed seats could only be used from June to December this year —effectively ensuring that those who wanted to make a last-minute hop to Las Vegas for this Sunday’s Pacquiao-Hatton fight, for instance, would have to stay at home and watch TV instead.

But it was still a tempting offer, especially for Filipinos (and there are still many) for whom Lucio Tan’s airline is top-of-mind whenever they make travel arrangements. These Filipinos, who make up PAL’s bread and butter, were obviously the target of the sale, since the “Real Deal” tickets were available only to passengers originating from Manila.

The sale began after midnight on Monday and ended last night, leaving hundreds and possibly thousands asking why, if the flag carrier really wanted to sell more seats, it made it so hard to buy them. PAL may have considered its “Real Deal” offer a success, given the response it elicited, but since the airline hasn’t said yet how many seats were sold (or how many were turned away, or even why its Web site wasn’t able to handle the traffic), that’s not really for the company to say right now.

What PAL must do right now is assure its loyal passengers that glitches like the overloading of its Web site don’t happen again. And that it is not unfairly shutting out passengers who still go to the brick-and-mortar offices of the airline or of their travel agents to buy tickets whenever it has a hot deal like its “Real Deal” promo.

* * *

To be sure, PAL did try to help the passengers who were able to get bookings but who weren’t certain that they had confirmed reservations or if their credit card payments had been accepted after the company’s Web site got inundated by “hits” from prospective buyers. A poster on the Skyscrapercity.com online chat room who goes by the name “Swahi” recounted how PAL personnel tried to make it easier for these lucky few who got in.

Swahi told the story of a cousin who was online the whole morning just to book a flight, but only got as far as sending her credit card details. Then the PAL site would send her an “error” message, leaving her unsure if she already had a confirmed booking or not since it was unclear if payment had actually been made.

“I told her, considering the circumstances, that’s OK,” Swahi said. “Your booking is now in the system. [She called] PAL to verify, and true enough, it was there. The problem is, PAL ticketing didn’t see payment confirmation. So PAL instructed her to call up the credit card company. It was a good thing [a] friend was already waiting in line in the ticketing office the whole morning. So she asked her friend to pay for the tickets, and gave her friend the booking reference.”

“PAL was accommodating, with the PAL telephone hotline confirming [the booking] and even giving her up to 12 noon [today] to confirm and pay,” Swahi wrote.

On the GMA News Web site, an unidentified PAL official confirmed that the airline was “implementing measures to get in touch with these customers to assist them in completing their transactions.” At the same time, the PAL official admitted that the promo had apparently become “too attractive” to prospective passengers, and that “the system did not expect the deluge of customers.”

However, PAL’s assurances did nothing to assuage the anger of those who didn’t get in before the promo ended last night. And even those who weren’t able to complete their transactions over the Internet complained that it was “standing room only” yesterday at many PAL offices, where the people who had booking problems were advised to go.

It didn’t help when the PAL official quoted by the network, in response to the complaints it was getting, said: “There are different ways of booking a flight and getting a ticket. You can call a landline for reservation or go to the ticket office.”

“I hope he is aware that Real Deal fares can only be availed online. If we were given that option before, I would have [gone] to a PAL office instead,” retorted another poster on the Skyscrapercity site.

The Real Deal fiasco mars what is otherwise being predicted to be another banner year for the flag carrier, which only last month announced that it was increasing domestic and international flights in the teeth of the financial crisis that is also being felt on these shores. Here’s hoping that PAL does better by its customers, who have stood by it through good times and bad, next time around.

World Aircraft Survey


Airliner census of 2008






By Max Kingsley-Jones

Our annual survey of the world's airliners shows an increased number of Western-built aircraft in operation at the expense of an ageing Russian fleet

The size of the world's airliner fleet has increased by 2.5% over the past year, with the expansion of Western-built aircraft driving growth as the count of Russia's ageing airliners declined further.

Compiled from Flight's ACAS database, this year's edition of our annual World Airliner Census comprises 26,675 aircraft - 663 more than a year ago.

The Western-built fleet totals 24,034 aircraft, having increased by 840 (a 3.6% rise) over the past 12 months. This growth is the highest for several years, surpassing the 2.9% in 2007, itself a marked increase on the previous census, when growth was less than 2%.

World fleet by western manufacturer

The overall fleet growth is partly offset by a decline in the Russia/CIS count, which has fallen by 177 aircraft to 2,641. The increasing availability of cheap pre-owned aircraft from the West - as well as new-build deliveries - is seeing the number of Russian/CIS types in service decline as they are replaced by European and North American-built airliners.

Top 10 Fleets - Russian/CIS types

Altogether, 1,229 deliveries have been completed in the past 12 months - and unsurprisingly all but 16 of these are from Western manufacturers as Russian/CIS production runs at a trickle. Overall, deliveries were up by more than 15% on the previous 12 months, and despite their low tally, the Russian/CIS airframers recorded a major boost in output to 16 from just three deliveries during the preceding period.

With the number of aircraft operated by North/South American carriers remaining stable, the market leader by fleet distribution has seen its share decline to less than 41%. The big gain is with the Asian, Australasian and Middle East carriers, which have seen their fleets grow by 300 aircraft, pushing their share up by one percentage point to 22%.

OLDEST AIRCRAFT

African airlines again operate the oldest airliners on an average-age basis, with Europe having the youngest. The Middle East and South America have seen their airliners' average ages improve by a year since the 2007 census. The overall world fleet average age remains 14 years, as it was in 2007.

The top-10 airliner ranking is again led by the Airbus A320 family and 737 Next Generation models, between them accounting for almost 6,000 aircraft. The 737 is the single most populous type, with more than 4,760 -200s, Classics and NGs in service, while the latter family also recorded the single biggest fleet growth - at almost 14%.

Average age by region - Western built fleet

The big mover this year is the A330 - only the second Airbus type to register in the top 10 - which has seen its fleet grow by over 12% and enter straight in at No 9, up from No 11 last year.

While the Bombardier 50-seat jet family continues to head the regional ranking, the fleet has declined for the first time - to 950 aircraft. Meanwhile, the two in-production turboprop types - the ATR 42/72 and Bombardier Q Series - have seen another year of strong growth, with their fleets expanding by 7.9% and 6.8%, respectively, to 680 and 723 aircraft. Embraer's E-Jet family has made a dramatic entry in the top 10, with the fleet increasing by a whopping 63% to 390 aircraft, ranking it sixth (from 13th last year).

The big loser in the Russian/CIS top 10 is the Tupolev Tu-154 trijet, which has seen its fleet decline by more than 20% to 354 aircraft, dropping it to third in the rankings. Otherwise the listing is similar to last year's, with most types recording slight reductions in overall fleet counts. Two types have seen their fleet sizes increase (the An-12 and An-24), because aircraft previously with non-commercial operators have been switched to civil roles.

With record airliner sales in 2007, the world order backlog has risen by 25% to over 7,400 aircraft (commercial operators only). The bulk (6,268) are for Airbus and Boeing types.

Orders backlog

The single biggest market is Asia, Australasia and the Middle East, which accounts for 43% of the total orders - up from 40% last year. In this sector Airbus has the lead share. North/South America - where Boeing is ahead - has seen its overall share decline by five percentage points from 28% last year to 23%. Europe - where Airbus leads - has also seen its share decline slightly, from 26% to 25%.

Despite continued dominance of the manufacturers' ranking with 10,900 units, Boeing's fleet growth has slowed this year to below 1%, compared with 2.3% last year. This is the result of the increasing number of retirements of the older types offsetting new deliveries.

Airbus, meanwhile, has seen its fleet grow by almost 9% to more than 4,840 aircraft and looks set to break the 5,000-aircraft threshold in 2009. Another big mover is fourth-placed Embraer - which has seen its fleet grow by 10%. ATR's fleet grew by almost 7% to 680 aircraft, enabling it to displace Fokker, which saw a 1% decline, in fifth place.

NAIA Properties declared not Taxable





Supreme Court finally exempts NAIA from city taxes


By Edu Punay

MANILA, Philippines – The Supreme Court (SC) has cleared the Manila International Airport Authority (MIAA) of over P1 billion in tax liabilities on lands and structures occupied by Ninoy Aquino International Airport (NAIA) in Pasay City for 1992 to 2001.

Voting 14-1, justices of the High Court ruled that the NAIA properties of MIAA in Pasay are exempted from real property tax charged by the city government, reversing decisions of the Court of Appeals in 2002 and 2004.

The SC declared that the MIAA is not a government-owned or controlled corporation but a “government instrumentality” that is not subject to any kind of tax by local governments under Section 133 of Republic Act 7160, the Local Government Code.

“Hence, MIAA is not liable to pay real property tax from the NAIA Pasay properties,” the SC said in the decision penned by Associate Justice Antonio Carpio.

The Court also stressed that the airport lands and buildings of MIAA are properties of public dominion intended for public use and should be exempted from taxes under Section 234 (a) of RA 7160.

The SC also nullified the real property tax assessments, including final notices and real property tax delinquencies, issued by city government in August 2001.

But the High Court clarified in its 12-page ruling that the portions of the NAIA properties in Pasay of the MIAA, which are leased to taxable persons like private parties, are subject to real property tax of the city government.

These were the same grounds raised by the SC in clearing the NAIA properties of MIAA in ParaƱaque City in 2006.

Chief Justice Reynato Puno and 12 other justices concurred with the decision. Only Associate Justice Consuelo Ynares-Santiago dissented.

The MIAA tax exemption covers some 600 hectares of land, including the runways, the airport tower and airport buildings, which straddles the border of Pasay and ParaƱaque.

In October 2001, the MIAA asked the CA to stop Pasay from collecting taxes on the properties, but the appellate court denied the petition and classified the MIAA as a government-owned corporation on Oct. 30, 2002.

The MIAA then filed an appeal but the CA also denied the petition on Mar.19, 2004. A petition for review of the CA decision was then filed with the SC.

PAL Website crashed

Overloaded due to online fare promo





By RUBY ANNE M. RUBIO


MANILA, Philippines -
The Philippine Airlines’ (PAL) Web site was unable to handle the huge volume of transactions from travelers wishing to avail of an online promotion that halved ticket prices.

As a result, complaints regarding the Web site have already reached the company, sources familiar with the matter told GMANews.TV on Monday morning, hours after the two-day promotion was launched.

The complaints involved Internet users’ failure to access the Philippine Airlines’ home page, make and hold an online flight reservation, and pay for these through a credit card, a source said.

The system “reached the maximum and was unable to handle the volume," a separate source told GMANews.TV through email on Monday, adding that the Web site has been “experiencing an unusual number of visitors who want to avail of its online promotion."

This was disclosed by the source on the first day of the two-day online promotion called “The Real Deal," which began twelve midnight of Monday, April 27.

The promotion covered local and international routes, encouraging travelers to flock to its Web site, PAL said, failing to disclose the number of average visitors its Web site receives in a day.

The company “is implementing measures to get in touch with these customers to assist them in completing their transactions," the source said.

Customers who may want to verify results of their transaction may get in touch with the PAL Reservations Center through telephone number 855-8888.

They may also send an email to onlinebooking@pal.com.ph for assistance.

Despite this assurance, an official said that the company has “no way of determining who were affected," the executive told GMANews.TV in a telephone interview.

Since the promotion became “too attractive" to prospective passengers, “the system did not expect the deluge of customers," the official said. “They all visited the Web site at the same time.

Until 12:00 PM of Tuesday, April 28, PAL will be offering roundtrip flights to Taipei from Manila for $38 and $418 roundtrip flights to its US and Canada destinations.

These rates are about half off current non-promo rates.

In its Web site, PAL said the prices are exclusive of government taxes and other fees collected at the airport.

Travel to US and Canada are valid for outbound travel from June 1 to December 25, 2009.

Travel to Asia and Guam are valid from June 1 to October 15, 2009.

Given the response, the source nevertheless admitted it was a successful promo for PAL.

PAL is not a stranger to this kind of marketing strategy as it usually offers attractive promos.

"There are different ways of booking a flight and getting a ticket. You can call a landline for reservation or go to the ticket office," he added.

DOH guards NAIA

Passengers of an international flight pass by thermal scanner as they arrive on Monday at the Ninoy Aquino International Airport.
Photo by Rene Dilan

NAIA Respond to Swine Flu Outbreak


Manila - Quarantine Bureau of the Department of Health (BOQ) has installed heat surveillance sensor devise and biosecurity measures at the Ninoy Aquino International Airports yesterday as the world pandemic caused by swine flu virus reached the shores of the United States according to the World Health Organization (WHO).

In a statement Monday, the Department of Health (DOH) clarified that “there are no reports yet of swine flu among humans in the Philippines in relation to the outbreak that originated from Mexico and other affected countries.”

"Although Manila has no flights to Mexico, it has a connecting flight from Los Angeles which necessitate screening of passengers for flu-like symptoms in an effort to contain the spread of the virus" said Health Secretary Francisco Duque III. Particularly affected are those coming from the United States because it is a transit point from Mexico City and that cases of infections have already been reported in the U.S.

There are currently 11 thermal scanners in international airports and some local airports to identify arriving passengers with fever.

“Thermal scanning is 100-percent effective when it comes to the detection of passengers with fever,” said Dr. Edgardo Sabitsana, Director of the Bureau of Quarantine.“We have somehow perfected using the device since the time of SARS.”

Meanwhile, the swine flue virus outbreak already affected airline traffic to and from Mexico and the US after passengers were advised to defer or delay trips to Mexico City.

The World Health Organisation has warned that the virus has the potential to develop into a pandemic. Mexico's health minister Jose Angel Cordova has told journalists the number of deaths in Mexico has already risen to 108 from 81 and there are 1614 cases of swine flu reported in the country with about 400 of those people now in hospital.

There are also 20 confirmed cases in the USA and suspected cases in France, Spain, Israel, New Zealand and the UK.


Land Acquisition readied for Legaspi-Daraga International







Albay airport on track


By Mar Arguelles

DARAGA, Albay—The government is speeding up the acquisition of 200 hectares of land in Barangay Alobo, to build the P3.4-billion Southern Luzon International Airport in Daraga town, Mayor Cicero Tiumfante said Friday.

He said officials had consulted 216 landowners to be affected by the airport’s construction in Alobo village, and he was optimistic they would agree to sell.

The airport’s 2 km runway which sits on a plateau will cover 187 hectares and affect 194 landowners, and its 1.5-kilometer-long access road is expected to dislocate 22 more.

The government is also negotiating to acquire 10 hectares to resettle residents who will be affected by the airport’s construction, according to officials.

Albay Gov. Joey Salceda said the feasibility study for the airport had been completed, and that the bidding for it would be held on April 30 and May 15.


Amadeus forged Seair deal

Amadeus and SEAIR increase travel choices in Asia to include exotic Philippine destination

April 25, 2009
Amadeus SEAIR agreement

Amadeus, a leading global technology partner to the travel and tourism industry, has signed an agreement to distribute the flights of South East Asian Airlines (SEAIR), a leading leisure travel carrier in the Philippines, on its Global Distribution System (GDS).

The deal will see Amadeus GDS distribute the content of all 13 of the airline’s domestic destinations, giving SEAIR the opportunity to sell its flights to more than 1,500 travel agency locations across the Philippines and 100,000 travel agency locations worldwide. This will allow more travellers across the globe to visit exotic paradise locations in the Philippines, such as Boracay, Batanes and Puerto Princesa, that are serviced by SEAIR flights.

This comes at a period when tourism in the Philippines is gaining ground rapidly, despite the decline in travel globally. According to the Philippine’s Department of Tourism (DOT), the country saw a 1.5% year-on-year increase in tourist arrivals in 2008, even with fewer arrivals from recession-hit source markets like Japan and the United States.

“The Philippines has successfully built a reputation as one of the world’s most exotic and culturally rich countries, and tourist traffic in the country has correspondingly increased over the past few years,” said Albert Villadolid, General Manager, Amadeus Philippines.

“This presents a perfect opportunity for travel providers like SEAIR to grow their business, by accessing new markets and building awareness of their brand. Selling flights via the Amadeus GDS, with its unrivalled reach and booking volumes, will help them achieve this objective and ultimately contribute to the growth of the Philippine travel sector as a whole.”

Mr Avelino Zapanta, President and CEO of SEAIR, said, “As one of the leading airlines servicing the Philippines, SEAIR focuses on giving holidaymakers access to off-the-beaten-track destinations. Selling our flights via Amadeus’ GDS, which has unsurpassed global coverage and the most advanced booking technology, is part of our strategy to expand our customer base globally while also remaining a leader in the domestic travel market.”

“Through Amadeus’ proven technology, we are able to turn adversity into opportunity by growing our bookings and strengthening our business even during the economic crisis,” he concluded.

PAL joins Boeing's deferral Bandwagon

As Boeing reveals more deferral discussion from Airlines


NEW YORK -- Boeing announced that 60 aircraft deliveries in 2010 and 2011, 32 of them 787's, have been deferred 1-2 years into the future, and at least another 60 more deferrals are in discussions with cash strapped airlines, among them Philippines flag carrier Philippine Airlines, PAL Holdings Inc (PAL.PS) .

Boeing chief executive Jim McNerney says the deferrals affect all aircraft types and are dispersed across all geographic regions. There has not been a "meaningful" number of deferrals so far in 2009, says McNerney, although he adds there has been at least one or two.

PAL is currently in talks with Boeing for the deferment of its 777 orders slated for delivery in 2010 due to financing problems, rapid drop in air-traffic demand and FAA Category II status which prevents them from expanding their route to their intended North American market.

Philippine Airlines is scheduled to announce a full year net loss on its 2008 operation ending March 31, primarily due to costly fuel hedges and high fuel prices. It already incurred a net loss of $113.8 million for the first half of its fiscal year as compared to its booked income of $22.7 million in the same period a year ago which prompted it to delay refurbishment program of its Boeing 747 and Airbus 34o fleet which should have been all done by now. Its plan to refurbished all A330 is also shelved.

The airline fired recently its Chief Finance Officer, Andrew Huang for the fuel hedging contract mess that cost the airline massive loss in 2008 which derailed its growth plans. He was replaced by Jose Gabriel Olives from Asia Brewery from April 1.

The Boeing Company said that the PAL delivery for 2009 which has already been deferred for 3 months will not be affected as no B777 orders have been cancelled this year, but its next scheduled delivery might be pushed back further. The Company has offered up to $1 billion in financing to bridge a gap for airlines seeking loans from banks amidst a global credit crisis.

However, Jaime Bautista, PAL President, is wary that they may end up with airplanes with no routes to fly to as they are not prepared to enter Europe at this stage when American doors are close for them to expand. Bautista said that having two new planes is manageable as they can find routes easily for them but the third one will be more difficult at this stage of their finances. The airline intends to fly the triple seven to Canada, Japan and Australia for the time being and will transfer the A340 to Los Angeles by November.

"There's more airlines moving orders out than moving forward," McNerney said. For one, Cathay Pacific opted to delay delivery of its triple seven. Singapore Airlines and Emirates Airlines are also talking to the company for the same plan.

Even with more 777 deferrals coming, Corporate President and CFO James Bell said the company is not anticipating a 737 production cut, citing an "oversell" of the 737s and "what we're seeing in terms of deferral discussions with our customers give us reasonable confidence that we'll get through the year without a rate adjustment." The company announced earlier this month that it would slow the build rate for its Everett-built 777.

The company anticipated "someday there may be a softening," McNerney says. "We're working through the over ordered portion of the backlog. We still think we're in good shape on the production rates."

Boeing Commercial has a backlog of more than 3,500 airplanes, but it plans to reduce its work force by 10,000 positions, with more than 4,500 job cuts from its commercial airplanes division to save on cost. The aerospace company reported a 50 percent drop in profit over the same quarter in 2008, due to previously disclosed aircraft production cuts and to lower airplane prices. Boeing's customers are grappling both with declines in air traffic and with finding funding for new airplane purchases. [ATI]

For Cebu Pacific,The time is right!

As it seeks new frontier far from its shores

Singapore - The global aviation meltdown has caused catastrophic financial returns to world leading Airlines around the globe, particularly the Asia Pacific region.

Qantas Airways Ltd., Australia’s largest airline, has eliminated 1,500 positions globally. Air France-KLM Group, Europe’s biggest airline, plans to cut 2,000 jobs.

Hong Kong’s Cathay Pacific Airline registered a loss of US$1 billion in the second half of last year, while Singapore Airlines’ passenger numbers slumped 20 percent to 1.18 million, the biggest decline since June 2003, according to Bloomberg.

But with every crisis comes opportunity and Cebu Pacific’s CEA Gary Kingshott is anxious to cash on it by following Tony Fernandes footstep at AirAsia. Fly the Airbus 330.

The Center for Asia Pacific Aviation (CAPA) reported that as the global downturn bites, low-cost carriers would outpace traditional airlines “in terms of traffic growth and earnings in 2009. So it did.

Cebu Pacific has outpaced Philippine Airlines as the industry leader in the Philippines by flying 5.4 million passengers in 2008 and it seeks a modest goal of carrying 7 millions more passengers in 2009 despite the global recession when its legacy counterpart which was forced to adopt a convergence strategy contends to carry only 6.5 million this year.

Recruitment for AirAsia and Cebu Pacific was also on the upswing in sharp contrast to the legacy airlines retrenchment program. Both Airlines with pending delivery orders from Airbus continue to roll its new planes to fly new routes despite short on cash due to hedging problems.

Tony Fernandes said that “The crisis is actually an opportunity for low-cost carriers or any low-fare model of business. If you look at America which is in a very bad situation, Best-Buy is doing very well, Wal-Mart is also doing very well. We are obviously seizing this opportunity when some of the other premium airlines are cutting back on their growth and people are transferring their business from legacy airlines to low-cost carriers.”

Both Gary and Tony sang the same tune after they saw each other in Singapore two months ago during the Low Cost Airlines World Asia Pacific Summit, and got a little word on the long haul choice as Cebu Pacific intends to introduce wide-bodies on its fleet. Narrow body is not the most economical way of flying to Australia especially the Airport charges which bills 30% of the fare.

Jetstar Airways, a low cost Qantas subsidiary was the first airline to introduced wide-body aircraft on its fleet as it launched Tokyo and Hawaii to its map. Qantas Group has done a commendable job of launching and nurturing JetStar as a successful internal low-cost, without contaminating it with big airline issues plaguing Qantas itself.

Philippine Airlines strategy of doing the same synergy hopes to duplicate the same success story after its plan with Air Philippines suffered a snag. Meanwhile, Malaysia Airlines did it with Firefly and Singapore Airlines with Tiger Airways.

History has shown that the "airline within an airline" model rarely works well, particularly for low-cost carriers. Low-cost development is equally problematic and the airline graveyard is virtually littered with failed "internal low-costs": Tango and Zip at Air Canada, CALite at Continental, Delta Express and Song at Delta, Shuttle by United and TED at United, to name a few. It remains to be seen whether PalExpress, its turboprop service, would be an exception to the rule as Philippine Airlines adopts to a convergent type of operations amidst impressive growth of low cost carriers. All its ordered B777 aircraft as well as its reconfiguration program has adopted a bi-class system.

Former EasyJet and Go executive Michael Coltman, from consultancy firm Mango Aviation, records history and flags up airlines which have capitalized on adversity. He said that over the past 40 years, the vast majority of successful low-cost airlines started and grew during downturns. The early 1970’s marked by recession, a fuel crisis, and stifling regulation, has spawned Southwest Airlines which now plans to go Long haul.

For Ryanair and EasyJet, the September 11, 2001 crisis allowed massive aircraft orders at greatly discounted rates, ensuring competitive cost advantage for years to come. The market turmoil at this time also allowed it to place an aircraft order that helped it secure a lower cost base than would otherwise have been possible.

During downturns, aircraft financing becomes much more affordable. Buying or leasing an aircraft in today's market can be done at near-historic lows.

Gary Kingshott thinks that now is the time to invest. This would allow the creation of a long-term cost advantage while targeting a market that will deliver meaningful revenue. This time Airbus makes sure that it lends a helping hand as it did before. After all, it was CEO Lance Gokongwei who said that he preferred Boeings yet ended getting Airbus for its fleet in 2003.

Airbus already established a Watchtower Committee to monitor its customers and financing needs, which Nigel Taylor, senior vice-president, customer, project and structured finance for Airbus says an operation similar to the War Room established by Boeing Capital in August 2007.

The purpose of the Committee is to analyze the "real" needs of airlines over the next two years, seeking to determine if any carrier may not need the equipment this year and moving the aircraft around if necessary. It also analyses pre-delivery payments and surveys the banks in line to finance customers. Cebu Pacific’s dream perfectly fits the bill.

The Toulouse based manufacturer is currently planning on about $1.3 billion in customer financing this year as compared with $1 billion for Boeing.

Investing now will require significant cash outlay. A sufficient war chest, which is still doubtful considering the losses posted by JG Summit in 2008, would allow the airline to secure aircraft at a long-term cost advantage, while having enough cash to cope with weaker near-term demand, fend off any competitive challenge and hedge fuel at current prices. This, combined with the right route network, would make for a strong carrier during the next economic upturn. But at the end of the day, it would still be JG Summit’s call.

Already, the legacy airline, particularly Cathay Pacific, now boast massive no-frills discounts or restricted fares across their networks as a means of fending off their budget rivals, at the same time keep their customers to continue flying with them and generate much needed revenue to sustain its big fleet as passengers are shifting their preference to fly low cost. [ATI]

New flight rules eyed in Baguio


By Vincent Cabreza

BAGUIO CITY – Civil Defense experts are exploring an afternoon no-fly rule for Baguio’s Loakan Airport, in the aftermath of the April 7 helicopter crash that killed eight aides of President Gloria Macapagal-Arroyo.

In Ifugao, where the Bell 412 had crashed, the weather bureau has been constructing a weather observation outpost to help make sense of the region’s intemperate weather patterns, according to Salvador Olinares, Baguio weather observer.

Olive Luces, Cordillera director of the Office of Civil Defense (OCD), said these were developments that surfaced from an April 15 emergency meeting of the regional disaster coordinating committee here.

Aftermath

The meeting was called following the Holy Tuesday crash that claimed the lives of Brigadier General Carlos Clet, MalacaƱang senior military assistant; Press undersecretary Jose Capadocia Jr.; undersecretary for Presidential Engagements and Appointments Malou Frostrom; three aides and the chopper’s two pilots.

Luces said the RDCC did not discuss the details of the crash because the meeting was to evaluate the rescue efforts.

But she said the Philippine Air Force Tactical Operations Group (TOG) offered the RDCC a few operational reforms for the airport.

Lieutenant Colonel Domingo Palisoc, TOG 1 group commander, had suggested that the airport tower be manned beyond office hours, Luces said.

No commercial flights

Operations at the Loakan Airport have slowed down because no commercial airlines used this route due to concerns about the restricted flight hours because of the afternoon fog.

“Here [in Baguio], even at 10 a.m., there is fog [and mist],” Luces said.

Asian Spirit was the last airline to operate here. The opening of an international airport at Poro Point in San Fernando City in La Union, a two-hour drive from Baguio, has also imperiled the continuous operations of the Baguio airport.

Luces said the TOG also wanted to deregulate the protocols for clearing pre-departure flights. Last-minute flight instructions, including the latest weather forecasts, are still radioed from Manila, she said.

Airport authorities said there were no specific prohibitions for afternoon flights in Baguio, but the OCD was exploring such a rule because of the city’s extraordinary climate patterns, she said.

Olinares said the weather bureau has state-of-the-art weather technology but needed to secure better data from “blind spots” like mountain regions.

New Aviation school to rise in Clark

Philippine conglomerate to start pilot training school at Clark






By Leithen Francis

Philippine conglomerate Citadel Holdings later this year plans to establish a commercial pilot training school at Clark airport outside Manila.

Citadel, which already has other aviation businesses, has an undisclosed Japanese investor for the new venture which will be established in Clark later this year in partnership with a US university, says Citadel vice chairman Jovino Lorenzo.

The new flying school's name will leverage off the US university's brand, says Lorenzo, adding that it has short-listed the University of North Dakota and Embry-Riddle Aeronautical University in Florida.

These two already have a reputation in the field of pilot training.

Lorenzo says the new school aims to capitalise on the shortage of pilots in Asia, particularly in China and India, and having the backing of a US university is important to demonstrate it will be of an international standard.

Citadel decided to establish the business because there is market demand and a flying school complements its other aviation businesses, says Lorenzo.

These include ground handling, catering and aircraft maintenance firm Miascor.

Citadel is also a general sales agent in the Philippines for 12 overseas airlines, says Lorenzo.

Citadel chose Clark because it is near Manila, has plenty of space, a good runway and businesses that set up there receive government tax incentives, he says.

Citadel already has a flight catering business at Clark so this catering firm will provide the students' meals, he adds.

The school plans to get 24 propellor aircraft for ab initio training as well as multipurpose simulators and later look to add two to three jets, says Lorenzo.

But it will refrain from adding simulators for type-rating, he says.

Graduates will qualify for a pilot's licence and a commercial pilot's licence, says Lorenzo, adding that it is considering offering multi-crew pilot licence (MPL) courses.

Cathay pacific cuts capacity

.
Manila and Cebu frequency retained

Hong Kong - Cathay Pacific has announced that it will reduce its passenger capacity by 8% and overall cargo capacity by 11% from May 2009 in response to “deteriorating” business conditions. At the same time, it will introduce a four-tier, top down special leave scheme where staff will be asked to take unpaid leave varying from one to four weeks according to their seniority.

The airline said that it has already deferred delivery of two Boeing 777 aircraft to 2010 and is in talks with manufacturers on delaying other orders as the carrier seeks to conserve cash in the market downturn.

Cathay Pacific chief executive Tony Tyler says, “We anticipate an extremely challenging year in 2009 and a toxic combination of low fares, a big drop in premium travel, weak cargo loads, poor yields and a negative currency impact is making it more important than ever to preserve cash.”

He says the first quarter of 2009 saw a “marked deterioration” in Cathay Pacific’s business compared to the same period last year; turnover was down 22.4%. “We have no option but to take measures that will help us weather the current storm and maintain the long-term sustainability of the business.”

According to Tyler, there will be a reduction in flight frequencies or seat capacity to London, Paris, Frankfurt, Sydney, Singapore, Bangkok, Seoul, Taipei, Tokyo, Mumbai and Dubai. At the same time, additional flights will be routed to Denpasar, Sapporo, Bahrain and Riyadh. While flights to the Philippines and New Zealand will remain on status quo.

Dragonair, a subsidiary of Cathay Pacific, will also reduce its capacity by 13%. Flight services to Bengaluru, Busan, Sanya and Shanghai will be reduced, while services to Fukuoka, Dalian, Shenyang, Guilin and Xian will be suspended. The weekly freighter frequency will fall to 84 flights, down from 124 a week during 2008.

The company is also negotiating the sale of five aircraft and will park two more of its Boeing 747-400BCF freighters, taking the total to five, and wet-lease one BCF to subsidiary Air Hong Kong.

Under the special leave scheme, all of the 17,000 staff working for the airline in Hong Kong and overseas will be asked to take unpaid leave of one to four weeks, depending on seniority, over a 12-month period from May 1, 2009 to April 30, 2010.

Mr Tyler says the global economic meltdown is “hitting the aviation industry hard”, and that, unlike many of its competitors, Cathay Pacific gets no government financial support or subsidy. “Our staff are being asked to make sacrifices that will be needed to see the company through this violent storm. The pain will be shared from the top down.”

Tyler added that “We anticipate an extremely challenging year in 2009 and a toxic combination of low fares, a big drop in premium travel, weak cargo loads, poor yields and a negative currency impact is making it more important than ever to preserve cash…We have no option but to take measures that will help us weather the current storm and maintain the long-term sustainability of the business.”

The company is already offering low roundtrip business class fares to Asia to compete with low cost operators. Sample roundtrip fares including fees are $3,791, for JFK-Manila; $4,622, San Francisco-Hong Kong; and $5658, JFK to Hong Kong. The JFK to Manila fare however requires a seven-day advance purchase and that outbound travel must occur by June 30, 2009. The fare shown is valid for Monday through Thursday departures and available on Flights CX888/889 flights.

Top 100 Airlines of the World 2009







Top 100 Airlines by Number of Flights
Ranking Airline Code Airline Name Frequency
1 DL DELTA AIR LINES 25,279
2 AA AMERICAN AIRLINES 24,476
3 US US AIRWAYS 22,673
4 WN SOUTHWEST AIRLINES 22,551
5 UA UNITED AIRLINES 22,157
6 CO CONTINENTAL AIRLINES 17,927
7 NW NORTHWEST AIRLINES 16,226
8 LH LUFTHANSA GERMAN AIRLINES 13,755
9 AF AIR FRANCE 10,893
10 AC AIR CANADA 10,030
11 CZ CHINA SOUTHERN AIRLINES 9,701
12 MU CHINA EASTERN AIRLINES 8,304
13 FR RYANAIR 7,810
14 NH ALL NIPPON AIRWAYS 6,606
15 U2 EASYJET 6,600
16 IB IBERIA 6,348
17 JJ TAM LINHAS AEREAS 6,232
18 CA AIR CHINA 6,153
19 BA BRITISH AIRWAYS 5,736
20 SK SAS SCANDINAVIAN AIRLINES 5,726
21 AS ALASKA AIRLINES 5,682
22 JL JAPAN AIRLINES INTERNATIONAL 5,168
23 G3 VARIG-GOL AIRLINES/ VRG LINHAS AEREAS S.A. 4,936
24 QF QANTAS AIRWAYS 4,907
25 FL AIRTRAN AIRWAYS 4,808
26 B6 JETBLUE AIRWAYS CORPORATION 4,392
27 KL KLM-ROYAL DUTCH AIRLINES 4,178
28 NZ AIR NEW ZEALAND 4,064
29 TK TURKISH AIRLINES 3,843
30 AB AIR BERLIN 3,656
31 AM AEROMEXICO 3,510
32 AZ NEW ALITALIA 3,257
33 BE FLYBE 3,252
34 IT KINGFISHER AIRLINES 3,045
35 DJ VIRGIN BLUE 3,014
36 MX MEXICANA DE AVIACION 2,856
37 ZH SHENZHEN AIRLINES 2,839
38 LX SWISS 2,779
39 HU HAINAN AIRLINES 2,778
40 OS AUSTRIAN AIRLINES AG 2,763
41 WS WESTJET 2,701
42 MH MALAYSIA AIRLINES 2,690
43 SV SAUDI ARABIAN AIRLINES 2,661
44 KE KOREAN AIR 2,622
45 9W JET AIRWAYS INDIA 2,547
46 SA SOUTH AFRICAN AIRWAYS 2,463
47 IC INDIAN AIRLINES 2,229
48 F9 FRONTIER AIRLINES INC. 2,204
49 EK EMIRATES 2,147
50 AK AIRASIA 2,116
51 AV AVIANCA 2,108
52 WF WIDEROE'S FLYVESELSKAP 2,023
53 ZK GREAT LAKES AIRLINES 1,990
54 TP TAP AIR PORTUGAL 1,976
55 MF XIAMEN AIRLINES COMPANY 1,918
56 9K CAPE AIR 1,900
57 DY NORWEGIAN AIR SHUTTLE 1,894
58 GA GARUDA INDONESIA 1,859
59 OZ ASIANA AIRLINES 1,847
60 LA LAN AIRLINES 1,839
61 FM SHANGHAI AIRLINES 1,804
62 TG THAI AIRWAYS INTERNATIONAL 1,772
63 2F FRONTIER FLYING SERVICE 1,762
64 MS EGYPTAIR 1,743
65 OA OLYMPIC AIRLINES 1,731
66 AY FINNAIR 1,709
67 CM COPA AIRLINES 1,676
68 5J CEBU PACIFIC AIR 1,661
69 PR PHILIPPINE AIRLINES 1,647
70 SU AEROFLOT RUSSIAN AIRLINES 1,603
71 3U SICHUAN AIRLINES 1,568
72 EI AER LINGUS 1,566
73 LO LOT - POLISH AIRLINES 1,523
74 SC SHANDONG AIRLINES 1,521
75 SN BRUSSELS AIRLINES 1,520
76 CX CATHAY PACIFIC AIRWAYS 1,505
77 OK CZECH AIRLINES 1,474
78 BD BMI BRITISH MIDLAND 1,464
79 JK SPANAIR 1,438
80 SQ SINGAPORE AIRLINES 1,426
81 QR QATAR AIRWAYS 1,412
82 JQ JETSTAR AIRWAYS 1,404
83 HA HAWAIIAN AIRLINES 1,392
84 VN VIETNAM AIRLINES 1,353
85 AP AIR ONE 1,335
86 JT LION AIR 1,313
87 YX MIDWEST AIRLINES 1,310
88 X3 TUIFLY 1,295
89 4U GERMANWINGS 1,221
90 A3 AEGEAN AIRLINES 1,193
91 AR AEROLINEAS ARGENTINAS 1,180
92 ZL REGIONAL EXPRESS 1,175
93 NT BINTER CANARIAS 1,084
94 GS GRAND CHINA EXPRESS 1,068
95 MA MALEV HUNGARIAN AIRLINES 1,066
96 PK PAKISTAN INTERNATIONAL AIRLINES 1,052
97 4C AIRES 1,043
98 NK SPIRIT AIRLINES 1,024
99 UX AIR EUROPA 1,019
100 6E INDIGO AIR 1,016
Source:OAG MAX Online
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