Aggressive pricing boosts domestic passengers by 21% in Q1

With Cebu Pacific carrying the most number of passengers

by Lenie Lectura

Manila - DOMESTIC passenger air traffic from January to March this year rose by 21 percent to 3.40 million compared with 2.76 million in the same period a year ago aided by the airline’s aggressive pricing strategies, data from the Civil Aeronautics Board (CAB) showed.

Philippine Airlines (PAL), Cebu Pacific, Air Philippines, Zest Airways and Seair all transported a total of 3,403,699 passengers out of the possible 4,294,678 seats for domestic travel during the period.

Of the total number, Cebu Pacific, the airline unit of conglomerate JG Summit, recorded 1,609,405 passengers compared to Philippine Airlines 1,512,614.

Cebu Pacific recorded a load factor of 81 versus PAL’s 80 percent during the period out of a possible 1,961,324 seats for Cebu Pacific and 1,897,118 seats allocated by PAL.

Air Philippines, the low-cost partner of PAL, recorded 124,516 passengers out of the possible 198,292 seats; Zest Airways, formerly Asian Spirit, reported 114,611 passengers and 193,236 allotted seats; and Seair transported 42,724 passengers as of end-March this year with 94,709 seats.

Air Philippines reported a load factor of 74; Asian Spirit with 59 percent; and Seair with 78 percent.

Air Philippines is 99 percent owned by the Lucio Tan Group. PAL, however, is 95 percent owned by Tan.

The total load factor or the number of seats occupied during a flight rose to 76 percent in the first quarter from 75.6 percent in the same period last year.

CAB deputy executive director Porvenir Porciuncula said the airlines continued to offer aggressive pricing strategy and search for and opening of new domestic routes.

Traffic from US and Korea on Downswing

Aviation board says passenger and cargo demands directly affected by global decline

By Jeremiah F. de Guzman

Airport officials said on Friday that the Philippines is also affected by the worldwide decline in international passenger and cargo demands as reported by International Air Transport Association (IATA).

Civil Aviation Board (CAB) deputy executive director Porvenir Porciuncula told BusinessWorld in a phone interview that the devaluation of the Korean won against the dollar has impacted travel especially in the country since Koreans comprise a significant chunk of international passenger traffic.

"Other airlines such as Northwest Airlines and Philippine Airlines have also experienced major drops affecting the Philippine international traffic in general," he added.

International passenger traffic went down to 2.9 million compared to over 3 million last year.

"The decline is more substantial in international cargo traffic, reflecting trade slow down," Mr. Porciuncula said. Cebu Airport General Manager Danilo Francia said in a separate phone interview that "in Cebu Airport alone, there was a 38% and 8% decline year-on-year recorded in international cargo and passengers, respectively."

However, he said that domestic passenger traffic went up by 45% as local carriers continue to offer lower rates, while domestic cargo only experienced a 10% drop.

"We expect that international traffic will only experience flat growth, if not continuous decline this year," Mr. Francia said.

Meanwhile, IATA released international traffic data for April showing a 3.1% decline in passenger demand and a 21.7% fall in cargo demand compared to April 2008.

"The demand improvements that we saw in April are welcome. But the 3.1% decline in passenger demand still outstripped the 2.5% cutback in capacity. The worst may be over, however, we have not yet seen any signs that recovery is imminent," IATA’s Director General and CEO Giovanni Bisignani said in a statement on Wednesday.

Asia Pacific carriers continued to see the most significant demand deterioration with 8.6% and 22.3% drop in passenger and cargo demand, respectively.

Recession finally hits PAL

launches $98 promo for international routes

Manila - In a bid to fill its planes during the lean season and match the growing popularity of low cost carrier, Philippine Airlines is launching again another promotion to stimulate the market dubbed "Way to Go" promo on Monday, June 1, by offering round-trip, economy fares for 20 trans-Pacific and regional routes starting at US$98.

The promo fare, which excludes government taxes, will be available for sale from June 1 to 5, 2009. The travel period is September 1 to Dec. 25, 2009 for five trans-Pacific destinations (San Francisco, Los Angeles, Las Vegas, Honolulu and Vancouver) and July 1 to Nov. 30, 2009 for 12 regional destinations, including Australia.

The trans-pacific and Australian market has been heavily hit by recession as passenger traffic finally registered a negative growth for 3 consecutive months despite previous promotional offers.

Civil Aviation Board (CAB) Deputy Executive Director Porvenir Porciuncula said that Northwest Airlines and Philippine Airlines have experienced major drops in Philippine international traffic going to the United States after world recession finally hit the Philippine market. International passenger traffic went down to 2.9 million compared to over 3 million last year.

"During these difficult times, we are offering our loyal passengers the opportunity to travel at much lower prices, without sacrificing quality of service, safety and comfort," said PAL President Jaime J. Bautista said in a statement.

The promo covers Manila outbound tickets, as well as Narita-bound flights from Cebu. It requires that return flights should be dated no more than 21 days after departure for tickets to the US , Canada and Australia . For other destinations, trip must be completed within eight days.

The regional points covered by the promo include Hong Kong, Macau, Taipei, Bangkok, Singapore, Saigon, Jakarta, Shanghai, Osaka, Beijing, Fukuoka, Nagoya, as well as Sydney and Melbourne in Australia.

This time, the customers can avail of the promo through PAL's web site, any PAL ticketing office or accredited travel agents. Conditions require that tickets must be purchased within 24 hours after getting a confirmed booking, but not later than June 5, 2009.

The airline recently faced a barrage of customer complaints after its internet-based ticketing system bogged down during a recent launch of a similar fare promo. Travel agents was also not happy with the previous promo on allegations that it undercut them. But company officials, in a statement, explained that the system glitches have been solved and new deals were offered to the travel agents for this promotional sale.

Philippine Airlines is not however alone on the promo deal as Singapore Airlines, Cathay Pacific, Lufthansa and British Airways are also offering deep discounts to travels in Asia to stimulate the market and entice people to fly.

Pilot, Saudi student survive crash

By Jaime Laude and Dino Balabo

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Rescuers examine the two-seater Cessna 152 which crash-landed in a ricefield in Plaridel, Bulacan yesterday. Mike Amoroso

MANILA, Philippines – A trainor pilot and his Saudi Arabian student escaped death yesterday when their light plane plunged into a ricefield in Plaridel, Bulacan.

Senior Superintendent Allen Bantolo, Bulacaan provincial police director said Capt. Danny Yumol and his student pilot Abdul Moran were rushed to the hospital for body injuries.

The two were on a trainor’s-trainee flight aboard a two-seater Cessna 152 plane with Body No. 8201 of the Delta Flying School that crash-landed at Barangay Lalangan, at about 11:30 a.m. yesterday.

Bantolo said the air mishap occurred shortly after the light plane took off from the airstrip at Barangay Lumang Bayan. “The student pilot and his teacher suffered injuries and were brought to a hospital for treatment,” Bantolo said. He said that the Air Transportation Office (ATO) is now conducting an investigation to determine what caused the mishap.

The training plane was heavily damaged, but its passengers only suffered minor injuries and were rushed to a nearby hospital.

Iberia to extend wings to the far east

Going East!

Madrid- Spain may once again be connected with its long time colony in the far east as it embarks its broad plans to mount flights to its bustling capital Manila despite the global downturn, and could be its only connection in Asia.

The national airline of Spain, Lineas Aereas de Espana (Iberia) intends to introduce its sole long haul flight from Madrid to the far east on a thrice a week Airbus 340 service after the Philippines and Spain amended its 1951 treaty on air services recently upon request by Iberia Airlines.

The Philippines and Spain agreed to make 28 direct flights available for their respective airlines to serve weekly, with seven flights between Madrid and Manila and Barcelona and Manila. Low cost airport Manila-Clark also got 14 weekly flights to and from Madrid and Barcelona as representatives of both countries wrapped up bilateral air services negotiations in Madrid.

Fernando Conte, chairman of the Spanish flag carrier said that they are very much interested of flying to Manila soon as there are plenty of passengers on that sector based on the figures they have. Iberia has ticketing office already set up in the Philippines.

"There are more than 50,000 Filipino migrant workers in Spain and they are currently being serviced by gulf-based airlines and almost 30% of them go home every year to the Philippines and were trying to service the market and provide direct service flights for them "says Conte.

Angel Moratinos, the Foreign Minister of Spain, confirmed that the estimated 50,000 migrant Filipino workers in Spain are growing and unscathed despite the global financial crisis.

"Most Filipinos work in the service sector and live in the big Spanish cities of Barcelona, Bilbao, Madrid and Valencia" says Moratinos.

Meanwhile, a Philippine Airline representative says that they have no plans to fly to Spain but they are open to the idea of having a code-share deal with Iberia to promote tourism of the Philippines.

Manila was granted rights to service 200 tons of cargo per week while Clark got 300 tons per week. Both points of origin were allowed daily cargo flights to and from Spain.

Cebu Pacific resumes service between Manila and Catarman


Runway View.

MANILA, Philippines - Cebu Pacific (CEB) will resume its four-times weekly Manila-Catarman flights starting June 2, after airport safety issues had been addressed by airport and local authorities.

“The runway has been cleared of vehicles and people 24/7. This is our green light to fly again to Catarman and bring back CEB’s affordable fares that other airlines must again try to match,” Candice Iyog, CEB vice president for marketing and distribution, said.

Iyog said airport safety had been improved after additional security personnel were deployed on the runway and the perimeter fence put up is ongoing.

“Airport authorities have also blocked the entry points around the airport’s perimeter fence used by residents,” Iyog said.

Local authorities said they are committed to beef up the facility’s safety by removing encroaching residential structures.

CEB praised the efforts of CAAP and local authorities who worked closely with CEB’s Safety Department to address the issues at Catarman promptly and comprehensively.

CEB early this month suspended its Manila-Catarman service despite its full loads after several runway intrusions by both people and vehicles during flights.

“Safety remains to be a priority for CEB and we will not compromise this over revenues or loads.” Iyog added.

After CEB temporarily suspended its operations in Catarman, other airlines operating this route started charging as much as P5,000 per way.

Now on its 14th year, CEB is now Asia’s third largest low-fare carrier and flies to 14 international cities and 32 domestic destinations with the addition of Cauayan (Isabela) starting next month.

RP, Spain seal air deal

By Riza T. Olchondra

MANILA, Philippines—The Philippines and Spain agreed to make 28 direct flights available for their respective airlines to serve weekly, as representatives of both countries wrapped up bilateral air services negotiations in Madrid recently.

The two parties allocated daily flight entitlements from Manila to Madrid and Barcelona, and vice versa.

Clark’s Diosdado Macapagal International Airport got 14 weekly flights to and from Madrid and Barcelona.

Other points in the Philippines, except Manila and Clark, were allocated daily flights to and from other points in Spain, except Madrid and Barcelona.

Manila was granted rights to service 200 tons of cargo per week while Clark got 300 tons per week. Both points of origin were allowed daily cargo flights to and from Spain. “The original agreement was signed in 1951 without frequencies,” Civil Aeronautics Board executive director Carmelo Arcilla, who is a member of the Philippine air panel, said.

Currently, there are indirect flights from Madrid and Barcelona to the Philippines and back. The routes are served by Asian airlines such as Singapore Airlines and a number of Middle Eastern carriers such as Qatar Airways.

Philippine aviation officials have not disclosed whether any airline, including flag carrier Philippine Airlines and Spain’s Iberia, expressed interest in serving the direct flight entitlements agreed upon.

This is the eighth air services deal entered into by the Philippines this year.

The Philippines has completed aviation talks with Qatar and United Arab Emirates in January, Kuwait and Bahrain in February, and Brunei and Australia in March, and Singapore earlier this month.

The International Air Transport Association has projected that world travel may decline by 3 percent in 2009.

The Philippines’ transport department views air deals as part of preparations for the eventual recovery of the global economy and the resurgence in air travel.

Transportation Secretary Leandro Mendoza said having more air service agreements would be good for the country.

Philippine Airlines and Travelport sign global marketing agreement

Philippine Airlines and Travelport have signed a three year global marketing agreement that enables Galileo, Apollo and Worldspan connected travel agents to access automated market fares and take advantage of additional functionality until the end of 2011.

The Travelport deal includes two strategic solutions for Philippine Airlines’ customers with the implementation of Octopus Travel hotel content on the airline’s website and the deployment of Travelport Rapid Reprice, an automated ticket repricing product.

Octopus Travel, Travelport’s online travel company, provides hotel content on Philippine Airlines’ website giving customers’ access to more than 21,000 hotels in 129 countries. The expanded hotel offering provides customers with a wide mix of properties at affordable prices ranging from one to five star hotels, international chains to small boutique hotels. Customers can also compare prices, view hotel locations and evaluate hotel amenities.

In a separate initiative, Philippine Airlines has also become the first carrier in Asia to implement the industry leading automated ticket repricing product, Travelport Rapid Reprice.

The product enables Philippine Airlines to recalculate a ticket reflecting the appropriate taxes, additional collections, refunds, penalties or administrative fees.

The automated product minimises revenue leakage from miscalculated collections and fees that remain inherent in a manual repricing process. It also significantly decreases the instances of airline debit memos due to superior data integrity and repricing accuracy. The product facilitates repricing of tickets irrespective of the booking system that the ticket was issued on.

“We are glad to be working with Travelport in offering new cutting-edge, automated services to our customers, enhancing the features of our website through Octopus Travel as well as the convenience of an automated repricing tool and refund for our sales offices through Rapid Reprice,” said Enrique Javier, Vice President for Sales, Philippine Airlines.

Brad Holman, President and Managing Director of Travelport GDS – Asia Pacific added, “We are celebrating three “firsts” in the Philippines. This signing represents the first marketing agreement between Philippine Airlines and Travelport. It also marks Rapid Reprice’s first airline customer in Asia as well as Philippine Airlines’ expanded hotel choice for customers with its tie-up with Octopus Travel.”

“Airline ticket reissue headaches can be a thing of the past with Rapid Reprice. The product dramatically reduces the number of key strokes involved in repricing a ticket from around 500 strokes to less than 10, thus improving the airline’s productivity, efficiency and accuracy,” Holman said.

Travelport’s Rapid Reprice is used by airlines to automate the complex, time-consuming itinerary repricing function. Rapid Reprice automatically integrates fare and rule categories from SITA and Airline Tariff Publishing Company (ATPCO) including voluntary changes, net fares, private fares and fare-by-rule.

The product was first launched in 1999 via the Worldspan GDS platform and more than 27 million transactions were processed using Travelport Rapid Reprice last year. More than 100 million fully automated transactions have been processed since launch, demonstrating the product’s unique functionality and scalability.

Fernandes eyes Seair as Philippine affiliate

Paris - World's best low cost airline in the world AirAsia Bhd., based on skytrax standards, a Britain-based consultancy that rates commercial airlines, is bent on establishing its foothold in the Philippines by setting up a local affiliate airline Seair Asia that will have the AirAsia brand access to an air traffic volume of more than 12 million passengers.

AirAsia now has a 49 per cent stake each in affiliate airlines Indonesia AirAsia and Thai AirAsia. It intends to do the same with local Philippine carrier Seair after its deal with Temasek's Tiger Airways lapse without the agreement lifting off.

AirAsia has been wrestling with Tiger Airways for more than 5 years now as to forging a strategic alliance with Philippine operator Seair controlled by German entrepreneur Iren Dornier, due to its landing rights in other Asean countries, a deal which is objected to by Philippine Airlines, Cebu Pacific, and Asian Spirit. The airline just obtained a congressional franchise to operate airline business in the country last year.

"We wants to have new associate units in the Philippines and Vietnam to strengthen its footprint in the Asean region. It will be great to have operations in the Philippines and Vietnam, the two biggest countries in Asean that we have yet to establish a base in," group chief executive officer Datuk Seri Tony Fernandes said in an interview at the Bi-annual Airbus symposium held in Paris recently.

Air Asia has just been awarded by Airbus for Operational Efficiency Award in the use of its A320 aircraft besting Philippines Cebu Pacific.

By setting up affiliate airlines in the two countries, AirAsia will have access to a combined population of roughly 180 million.

"We have been offered a lot of joint ventures around the region and this shows the power of our brand and while we expect a smoother sailing with the Philippines, Vietnam may likely take more time," Fernandes said.

However, he has not set a time frame for the expansion of AirAsia in Vietnam as they are still working with its local partner.

The planned venture with Vietnam's shipbuilding giant Vinashin to form a Vietnamese low-cost carrier was frozen by the Vietnamese government.

AirAsia had signed a letter of intent in 2007 for a 30 per cent stake to set up its third affiliate airline, Vina AirAsia, which was to have been operational by the middle of last year.

According to a Vietnamese daily, its government has since told state-owned companies, such as Vinashin, to focus on their core activities.

Furthermore, the Civil Aviation Administration of Vietnam has proposed to its Transport Ministry not to issue new airline licences in Vietnam until 2011.

Fernandes meanwhile said that in contrast the Philippines Seair already has a license to fly, the problem is just the capitalization and control issues which can be easily remedied and they are working on it with its future partners as fast as they could before Temasek knocks on Seair's window again. He plans to put either 3-4 airbus 320 planes initially with the joint venture airline if the agreements pushes through.

"But we are very patient. After all, we waited seven years to get the Kuala Lumpur-Singapore route. So I'm sure it will happen," Fernandes said.

He added that his ultimate vision was for all the AirAsia affiliates in Asean to become a single entity as an Asean Airline even proposing to the extent of using the Asean logo for its tail.

"My dream, without sounding like Martin Luther King, is that we are one airline in the end. Basically, for us to become one quoted company in Asean."

Air Asia is the largest low cost airline in Asia. It placed an order for 175 Airbus A320 aircraft in 180 seat configurations to which 59 have already been delivered. All of them are powered by CFM 56 engines. It will start servicing Jakarta via its subsidiary to Manila soon.

Tony Davis of Singapore based Tiger Airways is not however ready to hand in the towel just yet. Tiger has 56 A320s on order and has already accelerated some deliveries for next year and 2010. Two of the airline deliveries were supposed to be intended to Seair.

Asked about the airline's unsuccessful move to set up joint ventures in The Philippines and Korea, Mr Davis said the big opportunities were now in new agreements between Singapore and Malaysia and increased liberalisation with Indonesia.

"We're now flying to Jakarta and Kuala Lumpur," he said. "We weren't flying either of those routes 12 months ago."

While not releasing specific figures, Mr Davis said growing an existing business was more cost effective than starting up a new one thats why they are still talking with the Philippine carrier but are not discounting talks with erstwhile Asian Spirit now Zest Air.

"The fact that those opportunities are there for us in our existing businesses probably means we'll get a return on investments quicker than we would on a brand new start-up," he said.

"Brand new start-ups generally lose money in the first couple of years while you build up volume and economies of scale and get the business bedded down."

"And we're saying we're looking to accelerate further deliveries of aircraft as we are looking for double daily between Manila-Clark and Singapore this year as well as hiking frequencies to other destinations particularly in Australia," Mr Davis said.

Seair as Tiger Airways subsidiary would have flown from Manila-Clark to Hong Kong, Singapore, Bangkok, and Macao as well as major domestic points in the Philippines.

Philippines' Seair shelves plans to add A320s

By Leithen Francis

Philippine carrier Seair has shelved plans to operate Airbus A320s on domestic and international routes.

Seair had been aiming to add its first A320 in late March but the airline's director, Nick Gitsis, says it has put its A320 plans on hold because of the global economic situation.

"We want to sit it out and wait for the recovery," he says, without giving a new time-frame.

Seair announced in September 2006 it would be operating A320s from Clark in the Philippines to domestic and international destinations.

Singapore was to be its first international destination so it could link up with Singapore's Tiger Airways, which was planning to lease it the first two A320s.

The change in plan means Seair is now focused on its domestic turboprop business.

Gitsis says on 17 May Seair will be launching a twice-weekly service from Manila to El Nido in the southern Philippines using Let 410s.

He also says next month it plans to launch a service from Manila to the central Philippines island of Masbate, which has a privately-owned airport that is being upgraded.

A resort company controls the airport and until now the only airline operating there regularly has been charter airline Island Transvoyager which operates Dornier 228s, says Gitsis.

Seair operates a fleet of six Let 410s, three of which it is trying to sell, and it has four Dornier 328s and is looking to acquire two more, adds Gitsis.

Holdings firm set to prepay PAL notes, debt

By Riza T. Olchondra

MANILA, Philippines—Philippine Airlines unsecured zero coupon notes and bilateral loans due in 2011 are set to be prepaid through the controlling shareholder of its parent company, PAL Holdings Inc.

In a disclosure to the Philippine Stock Exchange, PAL Holdings said its controlling shareholder, Trustmark Holdings Corp., “proposes to buy a combination of notes and other [debts] up to an aggregate principal amount of $143 million, at its sole discretion.”

The buyback will be undertaken through a so-called Dutch auction, or an open descending price auction.

The aggregate principal amount of notes and loans combined is about $220 million.

The early tender is set on May 19. Those who will tender their notes by this time will receive their purchase price plus an early tender premium.

The offer expires on May 22 at 4 p.m. (GMT). The transaction is expected to be settled on May 29, PAL Holdings said.

JP Morgan Securities Ltd. is the sole dealer and manager of this transaction.

As part of the transaction, Trustmark will become the beneficial owner of the purchased notes and other debts.

PAL Holdings said that Trustmark would use the proceeds for future equity subscriptions.

Trustmark is controlled by PAL chair Lucio Tan.

It is the primary shareholder of PAL Holdings Inc. which, in turn, owns 84 percent of the issued share capital of the flag carrier.

Kuwait Airways told to pay PAL $1M

For unpaid contract obligations

By Tetch Torres

MANILA, Philippines—Despite the backing of two governments, Kuwait Airways Corp. was ordered by the Supreme Court to pay the country’s flag carrier Philippine Airlines over $1 million in contract obligations between the two airlines.

The case stems from PAL’s claim that Kuwait Airways should pay for the uplift of passengers and cargo from April 13 to October 28, 1995, after the governments of Kuwait and the Philippines signed a confidential memorandum of understanding granting exemptions to royalty payments effective on the signing of the agreement, April 12, 1995.

In a 23-page decision of the high court’s second division penned by Associate Justice Dante Tinga, the high court dismissed the appeal filed by Kuwait Airways seeking a reversal of the decision by the Makati City Regional Trial Court dated October 25, 2002.

The bilateral agreement, Kuwait Airways had argued in its appeal, in effect terminated the commercial agreement it entered into with Philippine Airlines which specified that the third and fourth freedom traffic rights will be observed, along with the revenue-sharing agreement that go with it.

Freedom traffic rights are the so-called five freedoms in the International Air Transport Agreement (IATA) signed in 1944; each signatory country agreed to grant each other five freedoms. The third freedom is the privilege to disembark passengers, mail, and cargo taken on in the territory of the flag carrier’s country while the fourth freedom is the privilege to take on passengers, mail, and cargo destined for the territory of the flag carrier’s country.

PAL does not dispute the provisions of the confidential memorandum of understanding, but told the court it cannot take effect immediately. It said the termination date of the commercial agreement is October 31, 1995 or the last day of the traffic period for that year.

On the other hand, Kuwait Airways argued that the bilateral agreement is superior to the commercial agreement having signed by both governments. It maintained that the government-to-government accord terminated the airline-to-airline contract soon after the former was signed in 1995.

But the Supreme Court said not even the two governments could immediately terminate the commercial agreement between the two commercial airlines.

The high court explained that even if PAL is subject to the limits of the law, still, the government has to respect the property rights of the airline and cannot arbitrarily confiscate or appropriate any property without due process of law.

“There is nothing to prevent the Philippine government from utilizing all the proper channels under the law to enforce such closure, but unless and until due process is observed, it does not have legal effect in this jurisdiction,” it said.

“Even granting that the ‘agreement’ between the two governments or their representatives creates a binding obligation under international law, it remains incumbent for each contracting party to adhere to its own internal law in the process of complying with its obligations,” the high court said.

It added that the commitment made by the government or its alter ego cannot be considered “divine” so as to exclude the legal rights of private persons.

The high court added that had PAL remained a government-owned and -controlled corporation, it would have had no choice but to abide by the bilateral agreement. In 1992, a private consortium acquired 67 percent of PAL shares.

In its decision, the Supreme Court said that while it sympathizes with Kuwait Airlines for relying on the commitment made by the Philippine government, everyone still needs to “respect the segregate identity of the government and that of a private corporation and give due meaning to that segregation, vital as it is to the very notion of democracy.”

At the same time, the high court faulted the executive department, particularly the Civil Aeronautics Board, for its failure to resort to legal remedies such as annulment or reformation of the contract between PAL and Kuwait Airlines.

PAL refurbishes B747 with world-class amenities

Rolls out second reconfigured cabin

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The refurbished B747’s state-of-the-art cabin amenities may be viewed even without boarding the aircraft by accessing the 36ยบ virtual tour of the B747 at PAL’s website —

MANILA, Philippines – Philippine Airlines (PAL) recently rolled out its second reconfigured Boeing 747-400 that features brand new and luxurious cabin amenities rivaling some of the world’s best airlines.

The upgrading is part of PAL’s US$50-million aircraft refurbishment program. It started last year after the airline management decided to reconfigure its long-haul aircraft to bi-class – taking out the First Class section – in keeping with the trend of major airlines worldwide.

The latest PAL B747-400 to undergo a facelift completed its three-month refurbishment on April 9, 2009 at PAL’s maintenance service provider in Taipei. New business and economy class seats, state-of-the-art inflight entertainment system and a new cabin design were installed in the aircraft.

The new cabin amenities and interior look can be viewed even without boarding the aircraft by taking the B747 cabin virtual tour at PAL’s website ( where an interactive 360 degree view of Mabuhay (lower and upper deck) and economy class can be accessed. The virtual tour is available on the website starting May 18.

Renowned aircraft seat manufacturer Recaro of Germany supplied the 391 seats (56 in Mabuhay and 335 in fiesta), offering generous seat pitch (60 inches in Mabuhay and 32 to 34 inches in economy). Luxurious Mabuhay seats are ergonomically designed and can be transformed into a lie-flat bed complete with a cocoon-type privacy shell.

Each seat has audio/video on-demand capability, including a personal TV (10 to 15-inch monitors for Mabuhay and nine-inch monitors for economy). The state-of-the-art inflight entertainment system allows passengers to choose from a library of video and audio content, including 18 movies, 8 TV programs, 12 radio channels and 50 CD albums. Digital games are also available for young passengers while in-seat power for laptops is provided in Mabuhay class.

Passengers are also welcomed by the cabin’s new look and feel – coastal-themed interiors characterized by palm-tree landscape design at the fore and aft sections of the aircraft, deep-blue seat upholstery with silvery-copper threads in Mabuhay class and undulating wave-pattern of blue, aqua and terracotta palette in Economy. To complete the airy, spacious feel, curtains, carpet and surfaces are in shades of blue, white, gray, silver and tan.

The refurbishment/reconfiguration of the B747s is capped by a new type of Mabuhay Class meal service called “One-by-One” – a la carte service where passengers select their own meal from a variety of choices. Each dish is individually plated, giving each meal a tailored touch, in the tradition of fine-dining restaurants. On-demand service means passengers can take their meals anytime during the flight.

Refurbishment of the first PAL B747-400 was completed in October 2008, signaling the start of a $50-million refurbishment program of PAL’s flagship aircraft. RP-C7471 was also equipped with the same world-class amenities.

Cebu Pacific now Asia’s 3rd largest

Also the largest carrier in the Philippines

Manila - Cebu Pacific (CEB) was classified as Asia’s 3rd largest low-cost carrier operator after Air Asia of Malaysia and Lion Air of Indonesia. The airline also became the 22nd biggest LCC in the world in terms of number of passengers carried.

CEB flew 6.7 million passengers in 2008—up 23% from 5.5 million the previous year—making it the fastest-growing airline in Asia among the top 25 low-cost carriers world-wide in terms of passenger carriage and revenue passenger per kilometer, the Airline Business magazine on its May issue said.

Last April 2009, CEB again broke its record for number of passengers in one month by carrying 823,419 passengers to 15 international cities and 31 domestic destinations.

“Our continued growth can be attributed to the increase in our seat capacity and trademark low fares, which are big factors especially during these difficult economic times,” CEB president and CEO Lance Gokongwei said.

“We expect to fly an estimated 9 million passengers this year as we expand our route network in the country and in Asia. The public can expect that we will continue to offer our trademark low fares,” Gokongwei said.

Affordability has been a CEB trademark and the airline has always been looking for ways to make flying more convenient and easier on the pocket.

It recently pioneered the all-inclusive fares, removing the “plus, plus,” to make the public immediately know how much needs to be paid for an airline ticket, and introduced the unparalleled ‘Go Lite’ fares that give discounts to travelers without check-in luggage.

CEB, the country’s leading domestic airline, has a fleet of 10 A319 and 11 A320 Airbus aircraft and eight turbo-prop ATR 72 aircraft. It expects to take delivery of two more ATR aircraft this year allowing it to open more inter-island routes.

Airbus to fly XWB to Manila

Another Preview of the things to come

Toulouse - In a similar note to its A380 route proving development programme, Airbus revealed that it will fly its 5th A350-900 frame to Singapore, Manila, Ho Chi Minh, and Bangkok in South East Asia as part of its long flight demonstration and promotions tour in 2012.

The -900 is the lead XWB variant and final assembly of the first aircraft is due to start in Toulouse by mid-2011, with first flight scheduled to follow "eight to nine months" later in the first quarter of 2012, says A350 Programme Chief Didier Evrard.

The A50 XWB's flight test programme will involve five aircraft flying about 3,000 hours. The airframer intends to begin flight-testing a cabin-equipped aircraft early in the programme to understand the interior's behaviour in the carbonfibre fuselage.

Certification and service entry is due to follow a 15-month flight-test programme in mid-2013. Meanwhile, development of the smaller -800 and -1000 stretch continues in parallel, with service entry of these two variants due to follow one and two years, respectively, after the A350-900.

"All five aircraft will run in parallel to achieve a short flight test and certification time," says Evrard. "We are planning to put them all into the programme very quickly - within a couple of months."

Evrard says No 5 frame will be used for "early long flight" demonstrations to Asia and Australia, with non-simulated and simulated passenger flights, along similar lines to the A380 route proving test programme.

Although 15 months have been allocated to the flight-test programme, Evrard says the exercise could take as little as 12 months.

Two aircraft, No 2 and 5, will be equipped with a cabin, and No 6 will be the first delivered to a customer, he adds.

Only Singapore Airlines, Vietnam Airlines and Bangkok Airways has pending orders for the A350 variants, with 20 -900's for the former 10 for Vietnam, and 4 -800's for the latter. Philippine Airlines is currently in discussions with Airbus for 12 -900 frames on a two-class configuration for delivery in 2015.

Airbus Chief Salesman John Leahy hinted that they are close to sealing a deal with another Southeast Asian carrier but refused to divulged further details and directed instead to wait for the airline to make the formal announcements soon.

Continental Bullish on Manila

May 13, 2009

Adds 2 new Guam-Manila extra flights

Hagatna, Guam-Continental Micronesia has added a new flight service between Manila in the Philippines and Guam for the peak summer travel.

Beginning June 6 until July 11, the airline has added Saturday morning flight service to Manila from Guam. Flight 893 departs Guam at 7:10am and arrives into Manila at 8:50am. Flight 894 departs Manila at 10am and arrives into Guam at 3:40pm.

“The additional flight frequency is in response to customer demand and will enhance the packages offered through our Continental Holidays product,” said David Kendell, Sales and Marketing director.

Continental also operates daily evening service to Manila with a 155-seat Boeing 737-800 aircraft.

“The benefit of the extra flight service on Saturday morning is also to accommodate our customers who flow through to Southeast Asia destinations for their summer travel and for those who look to Manila as a weekend getaway,” Kendell said.

Celebrating more than 40 years of service in Guam and Micronesia, Continental Micronesia is headquartered in Guam and operates a Pacific hub from the A.B. Won Pat International Airport.

Continental Micronesia and its code share partner Cape Air operate 86 weekly commuter service flights between Guam and the Commonwealth of the Northern Mariana Islands. The airline also intends to re-introduce flights between Saipan, the US Commonwealth of Northern Marianas, and Manila that was suspended in July 16 last year.

Continental Airlines is the world's fifth largest airline.

Philippines ready for FAA upgrade

As Philippine Airlines flexes its wings!

—The US Federal Aviation Aviation (FAA) has announced that it will be conducting another safety audit to the Republic of the Philippines in October 2009 after diplomatic request was made in Washington by Philippine President Gloria Arroyo. The request was favorably endorsed by US President Barack Obama to FAA Administrator Lynne Osmus who ordered the re-audit. The Philippines aviation safety rating was downgraded 15 months ago.

Department of Transport Secretary Leonardo Mendoza said that the government is confident that it will pass the safety audit of the FAA this time as most of its recommendations as to aviation safety standards are already complied while the rest are to be made ready when inspection is made.

Safety audit was already made by International Civil Aviation Organization (ICAO) last February and got a good remarks from Geneva based institution.

The safety audit report will determine whether the country is eligible for safety upgrade and the process usually takes a month after re-assessments has been made, according to the FAA Associate Administrator Margaret Gilligan.

The Country was downgraded after inspections were made by the US FAA on Air Transportation Office (ATO) record books, and it failed to monitor and properly check pilot performance, inadequate training programs for technicians, incompetent flight instructors and breaches in record keeping that affect safety regulations.

The upgrading will allow the country's airline to expand flights to US airports, an FAA official said Friday.

Only Philippine Airlines flies to mainland United States with points in Los Angeles, San Francisco, and Las Vegas. It plans to expand service to San Diego and Chicago after the safety upgrade rating.

Department of Transportation spokesman Thompson Lantion said the creation in 2008 of a new agency, the Civil Aviation Authority of the Philippines, to oversee safety standards, was a major step in reforming the aviation sector.

"We are very confident that we'll be able to achieve the FAA approval with all the efforts being done now," Lantion said.

He said the FAA's scheduled audit of its aviation sector would include a check on safety and the standards of aircraft mechanics and pilots.

Lantion expressed optimism that the Philippines would be able to hurdle it old status of Category 1 safety rating, after the Washington based FAA reduced it to Category 2 in December 2007 after a safety audit conducted 3 months earlier.

Lantion said there was always the risk the Philippines would be downgraded further and its airlines not be able to fly to US airports anymore, but was optimistic that such scenario is so remote as the government could easily remedy those safety concerns raised by US inspectors.

FAA Safety Rating is expected to be released in the first week of December 2009.

Fire hits ZIA

May 10, 2009

Airport firetruck failed to douse blaze

Zamboanga - A Fire of unknown origin hit the employees quarters of Zamboanga International Airport at at around 4:30 a.m. yesterday reducing it to the ground while injuring one of its employees who helped put out the blaze. The terminal was saved from the fire.

The blaze which started at the employees sleeping quarters adjacent the terminal building failed to be controlled by the airports fire department prompting it to call for reinforcement from the City's Fire Department which controlled the fire more than three hours later, Celso Bayabos, airport manager said.

The fire caused slight disruption of airport operations particularly the morning arrival flights as it caused chaos around the terminal's vicinity. Damage to property was initially estimated at 5 million pesos.

BFP fire investigation team together with CAAP operatives are still investigating the cause of the fire, which the spokesman from the BFP said to be due either to faulty electric wirings or leaky LPG tank.

Airport services returned to normal operations around 9am says Bayabos.

Singapore expands Philippine Air Treaty

May 9, 2009

Manila is still close for Open Skies with Singapore

Opens Clark instead

Singapore - The government of Singapore and the Philippines officially announced expansion of its bilateral air service agreement Thursday culminating the two-day air talks resulting in each side getting a threefold increase in seat entitlements.

Under the expanded agreement, carriers from both countries can launch an extra 16 weekly services between Singapore and Manila. The airlines will also be allowed to increase services to other destinations in the Philippines particularly Davao, Cebu and Clark, Civil Aeronautics Board (CAB) Deputy Executive Director Porvenir P. Porciuncula said.

Weekly seat entitlements between the two countries were increased from 17,500 to 26,200. They were broken down as follows:

* 11,200 seats between Manila and Singapore;
* 10,000 seats between Clark and Subic free-airports to Singapore;
* 5,000 seats between Cebu and Davao cities to Singapore.

Mr. Porciuncula said that their counterpart in Singapore wanted the early implementation of the Open Skies Agreement between the two state capitals but the Philippines declined to open Manila borders further this time considering the limitations of NAIA airport in Manila.

The Philippines was however able to grant more frequency to Manila-Clark with extra spices for 5th landing freedom rights to almost all destinations except Canada and the United States.

Singapore’s Ministry of Transport Deputy-Secretary (international) Lee Yuen Hee, who led the Singapore team in the negotiations, said that “The expanded agreement between Singapore and the Philippines demonstrates the commitment of both countries to develop closer aviation ties. The increased air services would further promote people-to-people ties, boost tourism and enhance bilateral economic relations.”

Lee Yuen Hee further said that “This is no mean feat considering the decline of 2.2 per cent in international passenger traffic across the Asia-Pacific region.”

Meanwhile, Clark International Airport Corporation (CIAC) President and CEO Victor Jose I. Luciano announced that the granting of 10,000 weekly seats, or the equivalent of 50 flights per week and with Fifth Freedom Rights privilege equivalent to 14 flights per week will make Manila-Clark (DMIA) a future hub of Singapore registered carriers.

Singapore Airlines and its subsidiary Silk Air, and its low cost subsidiary Tiger Airways together with Value Air and Jetstar Asia, a low cost Qantas subsidiary operates businesses in Singapore’s Changi Airport.

Currently, no Singapore based airline flies out of Manila-Clark as most of them operate from Manila, and points in Cebu and Davao. Only Philippine based Cebu Pacific flies to Singapore from Manila-Clark.

Luciano stressed that at the rate of 14 flights per week for a start, “They can go from Singapore, to Clark and onward to Japan, Europe, the Middle East, China and beyond, a development which boosts the DMIA’s position to being the premier gateway of the country as envisioned by President Gloria Macapagal Arroyo.

"The results of the air consultation talks were based mainly on the demand of RP and Singaporean carriers to add more services. For travellers, this should result in more choices and hopefully, lower fares," Mr. Porciuncula said.

Under the new agreement, Singapore carriers will be able to fly an additional 16 weekly Airbus 320 services to and from Manila. The same entitlements have been accorded to Philippine carriers.

Mr. Porciuncula explained further those local carriers, namely: Philippine Airlines and Cebu Pacific Air, have already expressed interest in adding more flights, while Zest Airways also plans to mount flights to Singapore.

Philippine Airlines now flies 20 times a week between Manila and Singapore. A spokesman said the company would not comment until it receives the report of its representative in the air talks. But a company official said they intend to take 7 of the new flight entitlements equivalent to a new daily frequency.

Cebu Pacific Vice-President for marketing distribution Candice A. Iyog said that they are looking forward for a thrice-daily Manila-Singapore service from the current 18 weekly flights. They also intend to make a daily Cebu-Singapore service for the upcoming peak season and reintroduce Davao-Singapore service again.

Zest Airways President Alfredo M. Yao said in a phone interview confirming that they are applying for Manila-Singapore flights but waits for its delegates to decide on the frequency.

Singapore Airlines (SIA), which currently services the Singapore-Manila market three times a day, using the bigger Boeing 777s announced that it will take coefficient equivalent to additional daily flight while subsidiary Tiger Airways will restart Singapore-Clark-Bangkok and Hong Kong flights. Silkair will also double its flights to Cebu and Davao by serving daily flights to both Cities this year.

Mr Leslie Ng, who heads Jetstar's commercial division, said the airline, which has a daily flight to Manila, is keen to increase frequency. He said: 'Demand is strong on the route, so we are definitely looking to mount a second daily flight.'

With the expanded air agreement, both Jetstar and Tiger Airways said they would consider any new opportunities that come along.

Currently, airlines on both sides together operate more than 100 weekly services between the two countries, maximizing the number of flights allowed under the previous air deal which was signed in August 2001.

Traffic between the Philippines and Singapore has grown by an average of 17 per cent annually since 2004. Despite the global economic and traffic downturn, traffic grew last year by 12 per cent.

Cebu Pacific adds 4 times weekly Manila-Ozamiz direct flight

Offers P1,188 all-in fare

May 9, 2009

Manila - Low cost carrier Cebu Pacific (CEB) has announced that it will offer a direct Manila-Ozamiz service starting June 16 2009.

The one-way ‘Go Lite’ seat sale fare of P1,188 runs from May 7 to 12 and is good for travel from June 16 to July 31. The four-times weekly Airbus A319 Manila-Ozamiz service departs for Ozamiz at 5:55am and lands at 7:20am. It leaves Ozamiz at 7:50am and arrives in Manila at 9:15am.

“The introduction of our trademark low fares to travelers from Manila to Ozamiz will spur more business and tourism activities in Ozamiz and its neighboring areas. We hope to further boost growth in this area, as we have done in other parts of the country where we currently operate,” said Candice Iyog, CEB vice president for marketing and distribution.”

Iyog added, “This new service will also offer travelers a more convenient travel option with our fast 1-hour and 25 minute flight as compared with a three-day ferry boat ride.”

“We are relieved that Cebu Pacific now has an Ozamiz-Manila route. This will provide quality air travel service to the public, and will make Ozamiz City more accessible to more travelers around the world. Our sincerest congratulations and appreciation to Cebu Pacific Air and we look forward to this development,” Hon. Mayor Reynaldo Parojinog Sr., City of Ozamiz.

Go Lite’ fares are for passengers traveling with no check-in baggage. Passengers with check-in bags just have to add P200 to the fare.

Meanwhile, Cebu Pacific is also introducing new flights Manila to Cauayan, Isabela on June 8, 2009 using brand new ATR 72-500 service. The 3 times a week schedule will fly Monday, Wednesday and Friday at 9:30am for Cauayan and will arrive at 10:30. It will leave at 10:50am for Manila and expected to arrive at 11:50am at NAIA Terminal 3.

The airline flies to 15 international cities across Asia and 31 domestic destinations.

CAAP urged to close Catarman airport over safety concerns

May 8, 2009

By Recto Mercene

SUGGESTION has been forwarded to the Civil Aviation Authority of the Philippines (CAAP) to consider the temporary closure of Catarman Airport if the local government will not cooperate in enforcing an aviation rule prohibiting vehicles and people from using the runway for their various activities.

The proposal has been made by several aviation groups, saying that safety is always the paramount concern when it comes to airport operations.

It also came in the wake of the suspension of Cebu Pacific’s (CEB) four-times- weekly Manila-Catarman flight, after the air carrier had to abort several landings in the past owing to people and vehicles on the runway.

In an earlier incident, the landing of a Cebu Pacific ATR-72 turbo-prop plane at the airport in Legazpi City had to be aborted after a vehicle was found running around the runway.

Subsequent investigation showed that the son of the Legazpi airport manager was teaching his girlfriend to drive.

CAAP director general Ruben Ciron suspended the Legaspi airport chief.

Ciron said CAAP has sent five security personnel to Catarman to enforce the rule preventing residents from using the runway as playground, or crossing it willy-nilly aboard their cars, but to no avail.

A few years back, the then Air Transportation Office constructed a perimeter fence around the runway, but residents, whose houses sit cheek-by-jowl with the runway’s edge, have destroyed the infrastructure.

It was gathered that the residents were encouraged by the local government, which filed a petition for a temporary restraining order (TRO) to stop CAAP from enforcing the rule that forbids trespassing on the runway and its immediate environment.

A Catarman official said that since the TRO was filed, the runway has often been used by residents to congregate, treating it as a playground, a park and a lover’s lane, all rolled into one.

“At night, it becomes a convenient motel,” the Catarman official said, adding that the paved runway make for an ideal trysting place for lovers, because it is dark and has concrete pavement that makes parking easier.

Keeping the runway free of obstacles is an overriding concern of the CAAP, even if there are no longer regular scheduled flights in that airport.

In an incident some years ago, the pilot of a distressed light plane was forced to ditch in the sea after seeing people and vehicles on the Catarman airport’s runway. The pilot thought that the runway was a provincial road.

CAAP and CEB officials met on Tuesday to resolve the issue.

CEB officials asked Ciron to act decisively in enforcing security measure at the Catarman airport before a serious accident happens.

As a result, Ciron sent a team to Catarman to talk to local officials and convince the residents to avoid congregating on the runway, especially during daytime.

A short-term solution is the reconstruction of the perimeter fence, but funds for that project are not available.

Ciron said the long-term solution is to relocate the runway far from the town so that it would be inaccessible to those who wanted to use it for their personal pleasure.

Part of the runway abuts the Catarman National Park.

Although CEB suspended flights to Catarman, Philippine Airlines and Zest Air continue to fly there.

Another Reason to fly Emirates to Europe

May 7, 2009

Adds 10kg. more of Baggage allowance in all classes

Dubai - Emirates unveiled today a 10kgs increase in its free checked baggage allowance, giving it one of the most generous baggage policies of any airline today.

Economy Class passengers now have a baggage allowance of 30kgs – up from 20kgs, the Business Class allowance has increased from 30kgs to 40kgs, and First Class from 40kgs to 50kgs.

These new, generous allowances, which are effective for all tickets issued on or after 4th May, have been implemented across the airline's extensive global network of over 100 destinations.

Carriers such as British Airways have an Economy Class checked luggage allowance of 23kgs per passenger, whilst the Economy Class allowances on Singapore Airlines and Cathay Pacific are from 20kgs per passenger.

Nabil Sultan, Emirates Divisional Senior Vice President Revenue Optimisation, said: "Emirates has moved to these new free baggage levels to further demonstrate our commitment to putting the passenger first. By offering travellers the flexibility to carry significantly more baggage we will be allowing them to take more gifts for family and friends or take advantage of the outstanding shopping in Dubai and across the extensive network of Emirates destinations."

Gold and Silver Members of Skywards, Emirates frequent flyer programme are entitled to an additional baggage allowance of 16 kgs over their ticketed allowance for Gold members and additional 12 kgs for Silver.

Codeshare passengers from Philippine Airlines travelling on Emirates operated flights are also eligible for the revised free baggage allowances. Emirates' regular rates will be applied to baggage in excess of these new allowances.[ATN]

The Usual Excuse

Cebu Pacific's On-Time Reality

By Katrina Legarda

Before I discuss anything legal, allow me to vent. I do not think I will ever travel on Cebu Pacific again. Cebu Pacific has taken the place of the once-well- entrenched-plane-always-late position of PAL.

We booked on Cebu Pacific as their fares seemed so much cheaper than PAL. It was only when the ticket was printed out that I saw all the hidden costs. Not cool.

There was chaos in terminal 3. Once that was suffered through, we had to wait (and wait and wait) in hot holding areas, like pigs in pens. Worse, we received only extraordinarily inaccurate information from ground staff about times of departure. The staff assure that the plane will leave on time, only for us already harassed travelers to be told, less than 2 seconds later, that we have to wait another two hours.

I want to know: how difficult is it to know when a plane left a destination and when it is due to arrive in Manila? Do not tell me, two hours later, that the “turn-around flight was delayed.” Even more heinous, you check in a little late, and you are fined. Do you get the fine back if that flight is delayed? Take a good guess.

Anyway, we arrived safe and sound, but because of the delay, could not find a place open to serve dinner. (Unlike PAL, that immediately arranges a little snack when the plane is delayed during breakfast, lunch or dinner times).

I could not believe it when, on our journey back, we bumped into Raul Manzano of Metro Society who was forced to pay for a coaster for his crew and who was forced to travel FIVE hours from Caticlan to Iloilo as Cebu Pacific was not going to fly them out of Caticlan that day. Sigh…. I bet you have worse stories.[abs-cbnnews]

5J suspends Catarman flight due to runway incursions

But PAL Express and Zest Air stay put!

May 6, 2009

Catarman—Low Cost airline Cebu Pacific (CEB) announced that they will suspend its four-times weekly Manila-Catarman service starting May 9 because of unresolved runway incursions at the provincial airport, but other operators are unperturbed by safety issues as they intend to continue serving its flights there. Catarman is the capital of Northern Samar province.

“Since we started operations last February there had been three runway incursions by both people and vehicles. Since these incidents remain unresolved despite our repeated request for action by government agencies we have decided to suspend our flights to Catarman in the interest of passenger safety,” says Candice Iyog, vice president for marketing and distribution, for Cebu Pacific. She said further that the Catarman operations would resume soon if flight safety were assured and if the runway were properly secured for commercial operations.

The Civil Aviation Authority of the Philippines (CAAP) had vowed to tighten its security measures at the Catarman airport.

But airport manager Dante Lulu admitted that they are having hard time preventing residents and vehicles from passing through the airport's runway, hinting that the best possible and only reasonable remedy would be regulating access to the runway when in used because closing it will just make matter even worst. A regulated access is better than sealing it off altogether because residents keep on destroying the fence for a short cut route going to town.

"We set up security fences close to residential areas but people tore it down. We’ve been asking for help from the local government units both in the municipal and barangay levels," Mr. Lulu said. However, due to political considerations nothing happened.

Merla Negradas, Eastern Visayas area manager of the Civil Aviation Authority of the Philippines, said that they are aware of the problem and closing the runway to public use may not be the best solution now although ideally it should be the case.

The solution would have been the opening of new circumferential road but the local government is plagued with right of way problem. And even if its open, residents would likely continue using the runway as shortcut because its the nearest point going to the town.

To remedy the deficiency, more security guards were hired by the agency recently to secure the runway particularly its road crossing says Negradas.

"From only four, we have added five security personnel to secure the runway. It’s not even enough but due to budgetary constraint we have to maximize our resources, and some of them have to be in the terminal building during arrival and departure time to secure the area, but we are fairly managing it well" said Negradas.

Philippine Airlines low cost arm PAL Express which flies daily to the airport and Zest Airways are aware of the safety issues but recognized the peculiar limitation of the airport on the right of way issues and closing it may not be the best option for now as the road crossing is the only link on the community opposite side of the runway.

As safety precaution airport tower usually sounds the alarm for incoming and outgoing aircraft to notify pedestrians of the incoming traffic.

The Inexorable rise of Middle East airlines

The Philippine Monopoly

In a rumbustious speech to the Aviation Club of Great Britain last week, James Hogan, CEO of Etihad Airways, said opportunity was knocking for Middle East carriers.

While others suffered, airlines like Etihad, Qatar Airways and Emirates were actually benefitting from the global downturn and sharp fall in demand. More travellers, especially those who travel first or business class, were choosing to fly with these carriers.

Mr Hogan said Middle East airlines were showing an "increasing ability to win and retain first and business class travellers" which would benefit the region's carriers.

"Until today, the first choice of many travellers to the Middle or Far East is to pick their national airline or one of the Asian ‘service brands'. That trend has started to shift - and the current downturn gives the Gulf carriers the chance to become the world's new ‘service brands' and reshape the sector."

This feeling that Middle East carriers are on an unstoppable rise was echoed, although more as a warning, by Dr Michael Whitesage, president of the Prism Group. Writing in an American business travel magazine, he said: "Flying a Middle Eastern airline gives us an idea of the competition to come: new equipment, motivated staff and enviable service."

The figures more than back up this upsurge. Over the last six months, statistics from the International Air Tansport Association (IATA) have consistently reported that the Middle East was the one region bucking the global trend of falling demand, capacity and loads.

The latest figures for March, issued this week, are no different. A continuing decline in capacity had spearheaded an 11.1% drop in passenger demand and a 4.4% fall in load to 72.1% compared with March 2007.

But the figures for the Middle East were a 4.7% rise in passenger traffic, compared with 0.4% in February, and a 13.1% rise in capacity. The load factor fell by 7.6% to 69.7%. IATA noted: "Middle Eastern carriers were the only ones to experience growth in March. This ....represented an expansion of market share. But this was out of balance with the 13.1% increase in capacity."

There are two points here which should give other airlines reasons to ponder. While just about every major airline in the world is cutting capacity, those in the Middle East are relentlessly increasing theirs. This growth in a soft market is enabling them to take more of the market share.

This growth has taken place in the middle of a recession which gives the ominous impression that the downturn is of no consequence or concern to airlines propelled by countless billions of oil money.

Emirates, the national airline of Dubai and wholly owned by the Dubai government, announced in February that it planned to increase its flights by 14% in 2009. This included new services and increased frequencies. It now runs, as an example, a service to Auckland in New Zealand and 63 flights a week to Australia. Its passenger figures rose by 11% from 2007 to 2008 with the airline now carrying 22m passengers a year.

Etihad, the airline of the United Arab Emirates, launched in2003 under a royal decree, said it planned a 20% increase in its 2009 summer programme compared with 2008. It has also launched new services from Abu Dhabi to Melbourne and added extra flights to Kuala Lumpur.

Gulf Air, the national carrier of Bahrain, also announced a larger programme including increased frequencies to Kuala Lumpur and Manila, capital of the Philippines.

Qatar Airways, the national carrier of Qatar, announced plans to start flights this year to Melbourne, Sydney, Goa and Amritsar. It also increased frequencies to Kuala Lumpur and Manila.

There is a pattern here with the Middle East carriers, along with many air analysts, seeing the Asia and Pacific as the regions with the most potential for growth. Their assault is well timed as some carriers in the region are suffering enormously in the downturn.

Singapore Airlines (SIA) reported a 23% drop in passengers in March compared with the same month in 2008 with its load factor falling from 80.8% to 69.4%. The airline has cut capacity by 11% and reduced services to the UK, India, South East Asia, mainland China, Japan, Australia and North America.

Qantas, expecting its worst results for six years, has cut frequencies, staff and capacity as well as postponing the purchase of new aircraft.

Cathay Pacific, which reported a record loss of $1.1bn for 2008, is cutting capacity by 8%, laying off staff and deferring spending projects.

The growth of low cost carriers in the region is also hitting the legacy airlines. One AirAsia is even running a long haul service from Kuala Lumpur to London.

At the Pacific Asia Travel Association Conference in Macau earlier last month, Andrew Herdman, director general of the Association of Asia Pacific Airlines, said: "It (low-cost travel) is doing extremely well at the moment as passengers move to the back of the plane to save on flight costs."

He also pointed out low-cost carriers are bucking the trend among full-service airlines by adding frequencies and routes.

In the past several weeks, budget carriers have been aggressive not only in coming out with new low fares but have also began increasing flight frequencies and adding new routes.

Singapore-based budget carrier Tiger Airways, which has 56 aircraft on order, kicked off its new Singapore-Jakarta service a month ago, as air routes across the Asean region opened up. It is set to introduce its Melbourne-Sydney route in July.

With legacy carriers reeling, the Middle East airlines, which seem to suffer no such financial problems, are well placed to pick up passengers who can no longer get the flights they want from the likes of SIA or Cathay.

The Middle East's move into Asia is a trend that is likely to continue as the Far East has a huge number of potential passengers. Mr Hogan in his London speech made pointed reference to the region's hundreds of millions of passengers.

No other airlines, at least at the moment, seem able let alone willing to step up their operations in the area which gives the Middle East carriers a clear run. The next few years could see them taking an increasingly prominent position in aviation.

The Boeing International Corporation certainly thinks so. Just recently, it upwardly revised its forecast of expansion by Middle East carriers, estimating it will grow by 40% in the next two decades.

Three years ago the Boston Consulting Group, remarking on the rise of the Middle East "juggernaut", advised other airlines to see which routes they were likely to move in on. If the advice was heeded, it does not seem to have made much difference as Middle East carriers are strikingly stronger now than they were in 2006.

The Boston Group also predicted that if Emirates continued expanding at its current rate, it would become the "world's largest long-haul carrier by 2012". That is another forecast that might need revising.[ABT]

Al Kharafi wants all LCC transferred to Clark for $1.2 Billion Deal

Low Cost Operators in danger of losing NAIA entitlements

May 4, 2009

Kuwait City - The Philippine government is walking on thin red line similar to the path of PIATCO on the NAIA Terminal 3 project, as it seeks to finalize a deal with Kuwaiti construction giant Al Kharafi and Sons Group to build and develop a new $1.2-billion airport terminal Complex at the Clark Freeport Zone in Pampanga north of Manila.

In Exchange for the deal, Ex-Kuwaiti Prime Minister and Billionaire Sheikh Nasser Al Kharafi, disclosed that it wants the closure of Low Cost Airline Operations in Manila out to Clark airport to make their project more viable, according to a senior officer of Al Kharafi group who doesnt want to be named pending approval of the agreement.

CIAC President Benigno N. Ricafort said that under the proposed joint venture deal with Clark International Airport Corporation [CIAC], whoever gets the contract must design, build, finance and operate the new airport.

According to Trade Secretary Peter B. Favila, the project will involve an initial investment of about $100 million-$300 million which is enough to finance the new terminal which will add 3 million capacity to the airport.

The request if approved by the Philippine government, will automatically add an instant 3 million capacity of the proposed terminal project to make it more financially viable, the officer said, stating further that with the present 1 million capacity, they will have 5 million capacity by 2012, the proposed project date of completion.

CIAC is targeting to open the new airport facility by the middle of 2010 with a capacity of at least three million passengers a year, but the unnamed officer disclosed that its not possible even if they have to start constructing now. The reason on the need for 2010 opening is not even a justifiable necessity yet to call it as such considering that the present terminal accommodates 60% only of its design capacity. Clark airport accommodated close to 1.1 million passengers in 2008 and based on statistical data will breach the 2 million mark in 2014 at the earliest.

The officer further disclosed that the proposed Phase 3 plan will also start construction in 2012 to accommodate transfer of legacy airlines to the airport around 2018 but calls for the closure of NAIA airport similar to what was done at Don Muang Airport in Bangkok Thailand.

The agreement however infringed on various bilateral Air Service Agreements with different Countries as NAIA-Manila and Clark-Manila are two different airports in the IATA registry. Likewise, Low Cost Airlines are expected to protest such move and will likely challenged the agreement to the highest court in the Philippines.

The proposed investment is being considered under a Build-Operate-Transfer (BOT) agreement
following a failed bidding of this project in September last year.

The DMIA is a 2,367-hectare aviation complex inside the former American military facility known as Clark Air Base in Pampanga north of Manila which was turned into and developed by the government as Clark Freeport Zone.