Caticlan airport conversion bad for the environment

Land specialist warns of ecological disaster

September 30, 2009

A land form specialist of the Department of Environment, Natural and Resources (DENR) warned on Tuesday that leveling the hill in the Caticlan Airport in Aklan will lead to ecological disaster in the world famous beach of Boracay island. The airport is the gateway to Boracay resort.

Dr. Ric Javellosa, of the Mines and Geosciences Bureau under the DENR, made the assessment after learning that the government will remove the hill as part of the expansion and upgrading of the Caticlan Airport into an international airport worth P2.5 billlion.

Javelosa also explained that the disaster would lead to “micro-climatic change” or disappearance of the entire white beaches around Caticlan and Boracay reportedly within 20 years.

Governor Carlito Marquez earlier welcomed the improvement of the Caticlan airport, but expressed concern about what he said was the lack of consultations on its being converted into an international airport facility.

Marquez told reporters that while he is not against the upgrading of the Caticlan airport – which is just a 10-minute boat ride to Boracay – he said it should “remain as a domestic airport,” just like what the Department of Transportation and Communications had briefed provincial officials last August.

He said it was alright for the Caticlan airport to accommodate bigger aircraft like 60-seater planes, instead of smaller ones, provided, however, that these are only for domestic flights.

Javelosa explained that leveling of hill and earthworks for expansion of airport lead to land and water quality deterioration, erosion and sedimentation.

“The existing domestic airport and proposed expansion into international airport rest on environmentally sensitive landforms,” the morphology expert said.

Seair turns Caticlan crisis into opportunity

By Daxim Lucas


September 28, 2009

MANILA, Philippines—Just a few months ago, niche carrier South East Asian Airlines was struggling on the ropes in a mismatched fight against larger competitors, which unceremoniously and progressively entered its “home turf” of Boracay over the last two years.

Long used to a virtual monopoly in the lucrative Manila-Caticlan air route, Seair suddenly found itself looking for a new business model after the “invasion” of other airlines, according to its president Avelino Zapanta.

New approach

“We had to think of a new approach,” he said in a recent interview with the Inquirer. “We would run out of money if we competed with them head on.”

The airline diversified its operations to give more emphasis on developing routes to less popular destinations which had the potential to become travel hotspots in the future.

But then, the unexpected happened.

A string of accidents in Caticlan involving one of its competitors forced aviation regulators to rethink operations at the small airport (which is, ironically, also one of the country’s busiest) that serves as the main gateway to the world-famous Boracay Island.

In the first incident, a turboprop MA60 aircraft of Zest Air crash landed when it undershot Caticlan’s 900-meter runway. A few months later, another MA60 of the same airline overshot the same runway.

After an investigation, aviation officials declared Caticlan a “one-way takeoff and landing” airstrip—meaning that flight operations could only be conducted in one direction—effectively preventing larger aircraft from using it.

This left Seair, with its relatively smaller, 32-seat Dornier Do 328 turboprops as the only airline able to operate under the new restrictions.

All of a sudden, the airline that was reeling on the ropes was back to its virtual monopoly status. Seair soon began to reap the financial rewards of being the only operator to service the popular route.

During the interview, Zapanta showed no glee at having been the beneficiary of the tightened regulations. But he did reveal that the airline had taken advantage of the situation, in part, to meet the consistently strong demand for flights to the resort island.

“Even before the July 9 [2009] announcement that the other airlines would be pulling out [from Caticlan operations], we have already added flights,” he said. “Before this, our flights had become very infrequent, maybe only nine or 10 times a day. Now we have been able to raise that to 18 flights a day.”

But the response from the flying public has been enthusiastic, prompting Seair to acquire a third Do 328 aircraft from Germany last July.

“When we input the new aircraft that came in, our flights [to Caticlan] would go to 20-25 a day, and as many as 27,” he said.

Toward the traditional peak travel season, Zapanta said Seair will raise the number of Manila-Caticlan flights to as many as 32 a day.

“That was our old frequency before the ‘invasion,’” he said. “So it’s really just going back to our old level, and perhaps a bit more.”

Growing demand

Last month, the airline also relaunched flights between Caticlan and Cebu to meet the growing demand for direct services from tourists in the country’s second largest city.

So enthusiastic has been the public’s response, in fact, that Seair now intends to acquire a fourth Do 328 by next month.

“It will be the same [aircraft] type,” Zapanta said. “That’s because that’s the most suitable type of aircraft for Caticlan. All other turboprops in the market today will have to have a payload penalty.”

“Ever since, our pricing has always been at a premium,” Zapanta said. “We have differentiated our product, because the cost of transfers are included—from the airport all the way to the island so the passenger won’t be hassled anymore.”

Fastest flights

More importantly, Seair also has the fastest flights to Boracay, even when its competitors were still serving the same route.

With or without the presence of larger rivals, however, Seair maintains a loyal following in a niche market of leisure travelers.

“We also had a loyal high-end market that would stick with us through thick and thin,” Zapanta said. “They didn’t want to be associated with low-cost carriers. So we would like to strengthen our capacity here.”

To do this, Seair has begun to “divert” these clients to other routes using a “blue ocean” strategy that, it is hoped, would make competition “irrelevant.”

“We found new destinations like Basco in Batanes, Masbate and Marinduque,” he said, adding that Seair is now working closely with local governments and the private sector in these locales to develop their potentials as tourism destinations.

New routes

“We’ve already started charter operations for Marinduque,” he said. “After an observation period, we may start scheduled service.”

Nonetheless, the Boracay market will remain Seair’s “bread and butter” for the foreseeable future, despite having priced itself at a premium to its former rivals.

The Seair chief also acknowledges that the party will not last forever. At some point, the airline will lose its virtual monopoly status, especially with government having promised to expand Caticlan airport to be able to accommodate larger aircraft.

“We don’t know the timetable of the government, but I think we have some time. That should give us a head start,” according to Zapanta. “It’s best for us not to worry about it and concentrate on improving the service so that we are able to strengthen our position.”

Manila remains a profitable destination for JAL

But cuts 21 other International Routes

September 26, 2009

Tokyo - Asia's biggest airline announced this week that it intends to keep its operations in the Philippines amidst recent announcement of cutting 21 of its unprofitable international routes as part of the company's massive re-structuring program after reporting $ 1 billion in losses for the period of April-June this year.

Japan Airlines operation to the Philippines has been downgraded since July 1, 2009 with its afternoon flight serviced by Boeing 767's due to economic downturn says the JAL Group in a statement. But in August both services were downgraded from Boeing 747 to 767 service or a capacity reduction of about 30%.

The airline said that in accordance with the FY2009 management plan, drastic adjustments are being made to the network and fleet size so as to more closely match capacity to demand, and allow the Group to improve profitability. However servicesis expected to be upgraded back slowly when traffic to and from Manila improves particularly during the peak months of December and January.

A downsizing strategy will be implemented in most of JAL's route network affecting 15 flights on 14 international routes, where jumbo 747-400s will be switched to medium-sized 777s and 767s, and medium sized 767s will be switched to even smaller 737s.

As part of its corporate reconstruction plan presented on Sept. 15, JAL will cancel all of its loss-making routes both at home and abroad within the next 3 years totaling 50 unprofitable routes that is 29 flights to cities in Japan and 21 to overseas destinations.The company also plans to completely withdraw from seven domestic and nine overseas airports.

The international routes to be abolished includes flights from Narita to Rome, Amsterdam, Brisbane and Sao Paulo, as well as those from Kansai to Singapore and Hangzhou.

JAL secured a 100 billion yen ($1.1 billion) loan from the Japanese Development Bank in June to keep flying until the end of the year but needs more money from the State to fund a restructuring plan. It seek as much as 250 billion yen ($2.5 billion) more through a mixture of equity and debt financing. It already cuts 6,800 jobs from its payroll to stay afloat.

PAL must downsize to be competitive

DEMAND AND SUPPLY
By Boo Chanco

September 25, 2009

At last, Philippine Airlines is recognizing the realities of the times by preparing to downsize its staff. The labor union is up in arms and is threatening legal action but even the Supreme Court cannot overturn the new rules of airline finances.The International Air Transport Association (IATA) is predicting an $11 billion loss for world airlines in 2009 and most of these losses would be borne by so called legacy airlines like Philippine Airlines.

It happened to the American car industry just a few months ago. General Motors and Chrysler had to file for bankruptcy and get government financial assistance because their labor costs are no longer competitive to the Japanese brands who are also manufacturing cars in union-free operations in some Southern states.

In the case of the car companies, the labor union had to become extremely reasonable. GM’s Bob Lutz called Ron Gettlefinger, the UAW president, a labor statesman. Indeed, the UAW agreed to a lot of demands that meant cuts on such legacy costs as lifetime health care and pensions for retired workers, massive lay offs and changes in shop rules to bring down labor costs to competitive levels with Toyota, Honda and Hyundai, among other foreign brands. Being intransigent was not an option because that would mean closure and total job losses.

In the airline industry, the same thing is starting to happen. Recently, British Airlines got into trouble with its unions because of plans to trim operations and staff in line with a drastically reduced demand for airline passenger seats. The unions are acting tough but it is likely that they will have to give in sooner than later.

In addition to tough economic times, British Airlines also faced fierce competition. The budget airlines such as Ryan Air, Easy Jet and Virgin are attracting the more budget conscious passengers these days. And let us not forget the pummeling the airline finances got from soaring fuel prices.

In Asia, the situation is the same. The mighty Singapore Airlines was forced to mothball a considerable number of planes in its fleet for lack of passengers. It is also cutting down on unprofitable routes and all these steps mean they are laying-off staff too. Malaysian Airways, Thai International and even Cathay Pacific are all in the same predicament.

Japan Airlines, the flag carrier of the country with the world’s second biggest economy is in danger of going under. JAL is desperately negotiating with American and other foreign airlines for assistance in exchange for equity stake and a large say in management. It is thus not surprising that Philippine Airlines, a legacy airline, is now saying they have serious financial problems that need drastic solutions.

“The bottom line of this crisis ... is larger than the impact of 9/11,” said Giovanni Bisignani, IATA’s director general and CEO. Industry losses for 2001-2002 were $24.3 billion. IATA attributed the worse ever loss to declining demand, rising fuel prices and exceptionally weak yields. Passenger traffic is expected to decline by four percent and cargo by 14 percent for 2009. Yields are expected to fall 12 percent for passenger and 15 percent for cargo.

Though “the global economic storm may be abating,” Bisignani warned that airlines “have not found safe harbor” and that “the crisis continues.” IATA predicted that the industry would post a loss of $3.8 billion in 2010. Industry revenues in 2009 are expected to be $80 billion less than 2008.

Bisignani predicted that “revenues are not likely to return to 2008 levels until 2012 at the earliest.” Asia-Pacific carriers will likely post a loss of $3.6 billion, roughly in line with the previous forecast of $3.3 billion.

Here at home, Philippine Airlines has finally snapped out of its state of denial. Among other things, they are now admitting their old business model is no longer viable. They have too much staff at 8,000 compared with Cebu Pacific at just 2,000. And to top it all, Cebu Pacific is now flying more domestic passengers than Philippine Airlines and presumably presents a better bottom line as well.

For PAL to be more competitive, it has to adopt the same business model of Cebu Pacific. It must have less full time staff. They need younger staff that is paid less and more fuel efficient planes. They have to get rid of other legacy costs that make the airline less nimble. PAL has acquired newer and more fuel efficient planes but is hamstrung to act decisively on the staffing problem.

The other negative of PAL these days is the threat of a labor strike. I got stranded in Los Angeles the last time they had a strike. Now that there is a threat of a strike, I am having second thoughts buying a PAL ticket for use two or three months forward. I don’t want the problems of being stranded.

Frankly, if I had my rathers, I would rather fly PAL than Cebu Pacific because PAL has better seats. For short flights, I can suffer the seats at Cebu Pacific. But for a flight of over two hours, I would choose PAL. Many others, it seems, don’t mind some discomfort in exchange for the cheap fares of Cebu Pacific.

The way it looks to me, the plan of PAL to rationalize its staffing is not a legal issue that the courts can decide. It is very much an economic issue. No court can force Lucio Tan to bleed still more money in PAL if he decides that he has lost enough in the airline through the years. There are easier ways of making money for the taipan. He doesn’t need the headaches of another labor tussle like the last one.

It is entirely possible that the labor union can win its case before the courts as it did the last time. But their victory will be pyrrhic if the airline goes out of business anyway. PAL’s labor union must study what the UAW did in the case of the American car companies and help management save PAL from its current financial troubles. They have to take the long view… the big picture. Or they will lose their airline and their jobs and there is nothing the Supreme Court can do about it.

Boracay remains unaffected by Caticlan Airport problems

Photo by Francisco Lai for Airlines.net

By Luc Citrinot

It went almost unnoticed, except in the Philippines. On June 29th, a 60-seat aircraft from domestic carrier Zest Air overshot Caticlan Airport’s runway forcing to a closure of the airport. It was the second serious incident at the airport in a six month-time.

The problem is that Caticlan serves Boracay, one of the Philippines most popular resort destination. The airport has been reopened but only for small 19-seat aircraft of commuter airline SE Air and only for one-way operations. All other airlines with 60 to 70-seat aircraft had to divert their operation to the next airport in Kalibo, an over two-hour-drive and boat ride from Boracay Island.

Caticlan airport redevelopment has been a long time topic for Philippine tourism with the project of upgrading the airport. The airport is surrounded by sea and a hill providing difficult landing conditions for aircraft. Its runway is in fact limited to only 970 meters. The urgency comes from the fact that the airport is now among the top five busiest in the country with some 800,000 passengers a year.

In 2007, Philippines’ National Economic and Development Authority (NEDA) approved the construction of a new US$ 44 million passenger terminal to serve the rising influx of visitors to Boracay Island. In the final project, originally due for completion in 2014, the apron and the runway are to be expanded by reclaiming land. The airport would then have its runway extended to 2,100 meters, enough to welcome aircraft up to the Boeing 737. International traffic will, however, continue to land at Kalibo airport.

But following the accident, the Philippine Department of Tourism and the Philippine Department of Transportation have worked together to accelerate the airport’s upgrading. The plan is to taper a portion of the neighbouring hill to remove obstacles along the runway. Works are du to be completed this month, before the start of the peak-season, ICAO (International Civil Aviation Organization) is assisting the government in its efforts to upgrade the runway and the airport’s safety.

They have been earlier plans to flatten completely the nearby hill but it is likely to face the protest of surrounding population as well as environmentalists, who are gaining more voice in the country. The rest of Caticlan Airport Development Project will then be funded by the Caticlan International Airport and Development Corp. (CIADC), a Filipino-owned company in the form of a build-operate-transfer (BOT) operation. However, for many domestic and foreign observers working in the tourism field, problems faced by Caticlan Airport are just another typical story “made in Philippines.” “We have heard for a long time about the necessary renovation of Caticlan Airport. And what happened last June is just a reflection of the problems faced by our country when it comes to infrastructures’ development. There is still a long way to get transport infrastructures to international standards and this turns to be a major handicap to a proper development of tourism in our islands,” said Candice Iyog, vice president Marketing for Cebu Pacific Air.

Boracay in Western Visayas is one of the Philippines’ most successful stories of the past decade. According to data from the National Statistical Coordination Board, Boracay has seen the total number of tourists growing from 200,000 in 2000 to 635,000 in 2008 –including 200,000 foreign arrivals. The island alone generates over US$275 million annually in tourist revenues.

Data point out that 69 percent of all international travelers to Boracay come from Northeast Asia, with Korea alone representing 46 percent of all foreign arrivals- and 13 percent from Europe.

H1N1 virus has so far failed to dent into the growth of the destination this year. For the first six months of 2009, arrivals to Boracay surged by over 5 percent to reach 400,000 visitors.

This year, Boracay could then end up with some 675,000 to 700,000 tourists on its shores. New deluxe hotels have opened up over the last three years, the latest being the Fairways Golf Resort and Country Club, the Discovery Shores Boracay, the Mandala Spa and Villas Boracay and most recently the exclusive Shangri-La Boracay Resort and Spa.

SEAIR Solidifies grip at Caticlan Airport

Launches more flights to Boracay, Palawan, and Batanes

September 21, 2009

In anticipation of the increased tourist traffic during the holiday season, Southeast Asian Airlines (SEAIR) is reopening its paradise-to-paradise routes from Puerto Princesa, Palawan to Boracay (Caticlan) and vice versa effective October 16, 2009. Flights are scheduled every Tuesday and Friday. SEAIR is also restoring its Manila – El Nido, Palawan - Manila routes starting November 18, 2009, with flights every Wednesday and Sunday. Tickets can now be purchased for Puerto Princesa and El Nido flights.

SEAIR has announced that it will increase flights to Basco, Batanes from four times weekly to daily starting October 12, 2009. The airline will also increase flights to Caticlan to up to 32 flights per day effective October 15, 2009 and onwards. Presently, SEAIR has up to 27 flights a day to this famed beach destination.

SEAIR is currently the only airline flying direct to Caticlan and Batanes. SEAIR’s fleet of DO328’s and LET410’s have proven very good performance in short runways. “Our aircraft, the Dornier 328 and LET L-410, are both capable of Short Take-Off and Landing (STOL). They are aerodynamically designed in a way that it is capable of landing and taking off in about 750 meters with full pay load. These aircraft are the most appropriate for small runways where bigger commercial airplanes cannot land,” said Avelino Zapanta, SEAIR president.

Boracay and Palawan have been ranked among Asia’s top ten vacation hotspots. Boracay is well-known for its powdery white sands and crystal clear waters. Palawan is rated by the National Geographic Traveler Magazine as the best island destination in Southeast Asia and the 13th in the world for its "incredibly beautiful natural seascapes and landscapes." The El Nido Marine Reserve Park is one of the island’s most famous tourist spots.

The Batanes island group, lying at the northernmost tip of the Philippines has a distinct landscape unlike any other island in the country. During the winter months from December to February, the cool temperate weather combined with green pastures, windmills on rolling hills and lighthouses guarding immaculate shorelines give visitors a sense of a holiday in the countryside of Europe.

SEAIR is the nation's second-oldest airline and has flown almost 3 million passengers to local destinations including Cebu, Tablas (Romblon), Clark, Zamboanga, Jolo, and Tawi-tawi.

A Family Corporation called CAAP

Aviation chief criticized for hiring 109 relatives

September 18, 2009

By Christine F. Herrera

AN OFFICIAL has demanded a lifestyle check on the head of the Civil Aviation Authority, saying he has surrounded himself with consultants—mostly relatives-—who receive P2.113 million a month.

Surigao del Sur Rep. Philip Pichay said Aviation chief Ruben Ciron had 109 consultants who were drawing P18,000 to P25,000 in salaries.

“I can’t understand why Ciron needs 109 consultants. Most of them are husbands and wives or brothers and sisters... who bloat the payroll,” Pichay told the House committee on appropriations.

“What is this, a family corporation?”

Pichay was angered by the radar failure at the Manila airport that grounded domestic and international flights on Sunday.

He told Ciron, who was present when Transport secretary Leandro Mendoza presented his department’s P15.07-billion budget for House approval, to resign for incompetence and negligence.

He wanted to know why Ciron made cash advances amounting to P5 million from May to September this year. His advances totaled P500,000 in July alone, and he made them in three consecutive days, he said.

Pichay said the 109 consultants were based in the Aviation Authority’s head office alone, and he had yet to find out how many more had been hired in the country’s other airports.

“Ciron should resign due to incompetence and negligence,” he said.

“He is a technical guy for being a fighter pilot and has a master in theology. CAAP has problem with management.”

Ciron was quiet while Pichay was scolding him.

The Aviation Authority has blamed Manila Electric Co. for the power failure that made the radar fail at the Manila airport, but Meralco said it had nothing to do with the radar’s failure.

Legazpi airport suffers Blackout too

But ATC survives Power Failure!

September 18, 2009

By Rainier Allan Ronda and Rudy Santos


MANILA, Philippines - Commercial supply of electricity fluctuated in Legazpi, Albay yesterday, busting he transformer of the city airport for about two hours yesterday morning.

Fortunately, a back-up battery was activated immediately upon the breakdown of the transformer at 11:27 a.m. and operations at the airport remained normal, Edgardo Ramos, Legazpi City airport manager, said.

The power transformer was repaired by 1:38 p.m. and the incident caused no delayed or cancelled flights.

Last Sunday, a power outage at the Manila air control tower crippled operations at the Ninoy Aquino International Airport (NAIA) for several hours, causing the cancellation and delay of several international and domestic flights.

The Civil Aviation Authority of the Philippines (CAAP) failed to restore power immediately to the communication and navigation equipment, especially the vital radar machines.

While the CAAP said that it had restored uninterrupted power supply at the control tower, the incident led Malacañang to order an investigation.

But CAAP insiders expressed doubts over investigation, as it would be headed by Department of Transportation and Communications (DOTC) Secretary Leandro Mendoza.

“The problems here in the CAAP should be looked into by knowledgeable civil aviation experts who will not cover up for the ignorance of retired military officers that have been placed in highly technical and sensitive positions here,” sources said.

The sources said while the CAAP top management and the Manila International Airport Authority (MIAA) has been downplaying the radar problem and attributing it to aging communications and navigation equipment, the power outage last Sunday paralyzed airport operations.

They said this could have been avoided if there were regular preventive maintenance checks by the CAAP.

“We are being led by people who do not know their jobs,” a source said.

The sources noted that CAAP director general Ruben Ciron has kept silent about the incident.

“We’re not surprised. We doubt if he can tell you what the problem was. And what’s worse is that he appointed his fellow retired military officers to crucial positions and these people do not know civil aviation matters,” the source said.

MACC construction to start

Meanwhile, the DOTC has given the go signal for the CAAP to start the construction of a new back-up Manila Area Control Center (MACC).

Ciron said Mendoza called him up Tuesday night and told him to proceed with the new project, which would be in place in three months

Called the ALS 2.5 system, the equipment would be used primarily by air controllers, while the old radar monitor-display consoles would be on standby in case of emergencies.

The project, costing about P300 million, will be finished by December.

Similar equipment imported from abroad, consisting of a workstation with 12 radar display consoles and associated system, would cost more than a billion pesos, Ciron said.

The new radar console display would be able to receive signals from three long-range radars in Laoag, Tagaytay and Cebu and process the inputs in Manila for countrywide radar coverage of all incoming and outgoing flights within the Flight Information Region.

At the same time, Ciron announced that flight operations at the country’s premier airport were restored as of 8 a.m. yesterday.

Ciron had a lengthy discussion with President Arroyo in Villamor Air Base last Tuesday about the incident and the steps taken to remedy the situation. –

PAL Gives Pink Slip to 2,000 Workers

September 15, 2009

Philippine Airlines has officially informed its employees that the management's retrenchment program will be implemented beginning November 15 affecting an estimated 2,000 workers coming from non-core services such as passenger handling, airline’s catering, ramp handling, and cargo handling operations. The numbers is equivalent to almost half the affected total workforce.

"We have no choice but to trim costs. We were really affected with the long haul, instead of the medium haul flights,” says Jaime Bautista, PAL CEO citing weak travel demands from areas where it matters most, the transpacific flight to where it derived majority of its profit to support the growing workforce. But with transpacific traffic down 7% and the same fixed cost from workers, something has to to be done in order to survive.

"We have decided to outsource the non-core business and transfer several operations to third parties to reduce costs and improve cash flow. Philippine Airlines employs 8,052 employees as of March 2009, almost half of them are ground employees. So we are currently reviewing its entire organizational set-up to make the workforce lean and mean" adds Bautista.

Last year the company earned P16 billion on gross sales for the same quarter period while it only earned P13 billion this year, a massive drop of P3 billion, which is a reflection on the current decline on its trans-pacific operations which comprises 32.6% in 2008 accounting to 47% decrease of its yields where international passenger traffic registered -1.5% slip as compared to a year earlier. The decline in passenger revenues was primarily brought about by lower net yield per Revenue Passenger Kilometer (RPK) as the airline scrambles to fill its seats.

PAL workers however are resisting the retrenchment plans because they believed that its main aim is to bust the union by outsourcing those work to companies that are also owned by Tan such as MacroAsia Corp., where workers are non-unionized, receive cheaper wages, less benefits, and without security of tenure.

“The outsourcing and spin-off is unacceptable to us. We are going to present [options] to the PAL management if it is really in a dire financial need” explained Edgardo C. Oredina, PAL Employees Association (Palea) president.

Mr. Oredina said PALEA members were open to pay cuts through job rotations to reduce working hours, but removing them altogether to be replaced by contractual isn't right as a justification to cut down on costs.

In 1998, PAL was leading to bankruptcy and forced go into receivership in the aftermath of the 1997 Asian Financial crisis. It returned to profit in 2000 and was out of receivership in 1997.

In 2008, the airline lost $301.4 million as a result of higher expenses brought about by last year’s record-high fuel prices and imprudent fuel-hedge deals which resulted to the sacking of its Chief Finance Officer. While revenues went up slightly to $1.6 billion it were not enough to cover operating expenses of $1.9 billion, up from $1.539 billion the previous year. Total liabilities also went up by almost a fifth to $869 million.

Burdened with ballooning operating costs, the airline is now looking at various strategies to return back to profitability, including selling assets, reducing flight frequencies, and letting go of employees through rationalization.

Manila ATC Back Online

Manila Control Are you there?
By Recto L. Mercene
September 15, 2009

THE Area Control Center (ACC) radar display went into partial operations on Monday, allowing aircraft to land and take off subject to delays. The ACC radar consoles and communications went out of commission on Sunday due to a failed power supply, causing scores of local and international flights to cancel or suffer long delays.

FLIGHT operations resumed at the Ninoy Aquino International Airport (Naia) at 8 p.m. on Sunday, although air controllers had warned local and international air carriers of continued delays.

As of press time, two of the four radar screens and all radio communications at the Manila Area Control Center (Macc) were in partial operations.

The air controllers have adopted a “flow control” system that limits arrivals and departures, giving them five-minute separations so as to assure relatively fast and safe landing and takeoff.

At 2:30 p.m. on Sunday, power fluctuations at the Naia triggered a chain reaction that affected communication links with pilots and air-traffic centers, including a power loss that prevented the long-range radar display from showing aircraft on the air.

The head of the Manila International Airport Authority (Miaa) on Monday explained that Sunday’s power outage affected the flight operations handled by the Civil Aviation Authority of the Philippines (Caap), and not the Ninoy Aquino International Airport (Naia).

“The Naia itself was a victim of the power failure, although we were able to immediately put into operations our backup power,” said Miaa general manager Alfonso Cusi.

He said the Miaa lend a battery system to augment those of the Caap providing air-to-ground communications among pilots and air controllers.

Meanwhile, the Manila Electric Co. (Meralco)—the country’s largest power distributor—clarified that the problem that affected the Naia operations on Sunday was due to internal technical trouble.

In a statement, Meralco traced the problem to the power supply of the air-traffic communication systems, and not to the massive loss of power or blackout of Meralco circuits supplying the airport complex.

Ricardo Buencamino, Meralco executive vice president and networks group head, said the power to its Sunvalley circuit serving Naia’s radar station and Malibay circuit, which serves the air-traffic control tower, was normal.

Buencamino said the circuits did not encounter power disruptions that could adversely affect Naia’s communication systems.

Although a circuit from its Parañaque substation serving Naia Terminals 1 and 2 tripped off at about 2:29 p.m on Sunday, power was immediately restored in three seconds. This is consistent, Buencamino said, with the advisory released by Caap director general Ruben Ciron “that what they encountered was a technical problem which their technical people immediately worked on.”

Meralco recalled that operations at Naia were also disrupted on September 13, cutting off communication links between pilots and the air- traffic center, and causing failure of the long-range radar display, which caused the delay and diversion of international and domestic flights on that day.

GMA orders Caap to report

President Arroyo has ordered the Caap to submit a report detailing the cause of the power outage that crippled operations at the Naia on Sunday.

Deputy Presidential Spokesman Anthony Golez said in a news briefing the report would be the basis of further directives from Malacañang, if necessary.

Golez said the report is expected to show whether there are certain “inefficiencies” in the Naia service system that must be addressed to prevent a repeat of Sunday’s problems.

Non-radar operations

AS a result of the temporary communication and radar failure, Caap air controllers put into operations on Sunday the nonradar procedure in handling flights beyond the 60 nautical miles radius. The long-range radar that went kaput is capable of monitoring aircraft within a 250-mile radius.

The incident caused Cebu Pacific to continue to experience flight delays of approximately 15 to 20 minutes due to flow-control restrictions at the Macc. As of 10 a.m. on Monday, CEB said on-time performance was still at 94-percent systemwide and there are no planned cancellations at this time.

CEB mounted an extra flight to Puerto Princesa on Monday morning to accommodate the passengers who missed their flights on Sunday. The airline advised guests to call their office first and visit the web site for updates.

The Caap issued a notice-to-airmen (Notam) about the communication and radar glitch at 3:50 p.m. on Sunday and, at the same time, reassuring a return-to-normal procedure later in the evening of Monday.

While the long-range radar of the Manila ACC remains out of commission, the Manila Approach Radar, a medium-range radar, took over the task of guiding air traffic.

Ciron said when the power failure occurred, the uninterrupted power supply (UPS), which would have assured the continuity of communications and operability of the radar system, failed to activate for the first time.

The incident happened at a time when the transportation and communications department and the Caap are in the midst of replacing the radar and power infrastructure, which includes the 13-year-old UPS and similar aging equipment.

Currently, the DOTC and the Caap are implementing the new Communications, Navigation, Surveillance and Air Traffic Management project, which will modernize the country’s air-navigation system.

Ciron said the Caap has put in place a contingency plan to prevent the recurrence of a similar incident. (With M. Gonzalez, P.A. Isla)

Power outage freeze Philippines Brand New ATC

Suspends NAIA flights

By Rudy Santos and Rainier Allan Ronda

September 14, 2009

Photo taken last night shows the NAIA Terminal 1 devoid of planes after a power outage at the airport control tower forced the delay and diversion of all international and domestic flights. Rudy Santos
| Zoom

MANILA, Philippines - A power outage at the airport control tower crippled operations at the Ninoy Aquino International Airport (NAIA), forcing the delay and diversion of all international and domestic flights yesterday.

Airport officials said the power supply of their radar at the control tower broke down at 2 p.m., forcing the diversion of several incoming international flights to other airports.

“The tower cannot communicate with the radar and they cannot guide the airlines to land and depart… so it is a safety issue,” airport general manager Alfonso Cusi explained.

Cusi said some international flights were diverted to Hong Kong while other incoming flights were ordered to land in other airports.

The loss of communication links with air traffic controllers forced some 20 local and international flights already airborne to turn back to NAIA while other flights preparing for take off were ordered grounded.

In the advisory released by airport officials, among the flights ordered to “return to base” were cargo flights from Manila to Taipei and Manila to Bangkok.

The cargo flight from Manila to Taipei (CI 5850) that departed 1:30 p.m. was ordered to return to base because of the radar problem. It was the same problem in flight TG 621 (MNL-Bangkok) that was forced to return to Manila following the power failure.

Other cancelled flights include PR 311 of the Philippine Airlines (PAL) bound for Hong Kong, which was ordered to return to base.

PAL’s PR 432 bound for Narita, Japan and PR 416 bound for Pusan, South Korea were also cancelled.

In the same advisory, international flights TG 620 (MNL-Kansai, Japan); SQ 917 (MNL-Singapore) and CZ 398 (MNL-Canton, China) were delayed at NAIA Terminal I.

At the NAIA Terminal 2, a total of eight domestic flights, were cancelled. Two domestic flights in NAIA Terminal 3 were also cancelled.

In the advisory, among the PAL domestic flights that were cancelled include the PR 177 from Manila to Tagbilaran; PR 178 Tagbilaran to Manila; PR 293 Manila to Dumaguete; PR 294 Dumaguete to Manila; PR 283 Manila to Cagayan de Oro; PR 284 Cagayan de Oro to Manila; PR 849 and PR 850, Manila to Cebu, Cebu to Manila; PR 817 and PR 818, Manila to Davao and Davao to Manila; PR 393 and PR 394, Manila to Tacloban and Tacloban to Manila.

Cebu Pacific’s Manila to Tacloban flight and its return flight 5J 657 and 5J658 were also cancelled.

The Civil Aviation Authority of the Philippines (CAAP) issued a “notice to airmen” (Notam) around 3:30 p.m., advising all inbound and outbound flights of the radar and power failure at the airport.

The Notam forced several incoming international flights to divert to other airports and return to their point of origin.

With the long range area radar system out of commission due to the power failure, airport officials resorted to using the medium range Manila Approach Radar to guide other incoming flights to a safe landing at NAIA.

CAAP said the sudden loss of electricity should have triggered the standby generators to take over.

However, the generators were not sufficient enough to power the air-to-ground communication systems and the international hotlines connecting CAAP to nearby traffic facilities.

The problem remained even after Elmer Gomez, the chief of the Manila Airways Facilities Complex, reported that all facilities and international communication links had been restored by 3:30 p.m.

But the radar display at the Manila Area Control center remained out of commission.

CAAP then took over and allowed a five-minute departure interval at the airport.

Domestic flight carriers Philippine Airlines, Cebu Pacific, ZestAir and SeaAir were directly affected by the delays, and some flights to local destinations were cancelled.

On the other hand, the international flights by members of the Airline Operators Council also remain grounded at the NAIA Terminals 1 and 2, waiting for the resumption of normal service.

Marlyn Tolentino of Singapore Airlines said they were advised of the problem two hours after the blackout occurred.

“But we managed to depart our two flights back to Singapore before the power failure,” she said.

An airport official said CAAP was still attending to the radar repairs until last night.

CAAP director general Ruben Ciron said they would expect normal operations to resume at 10 p.m.

“Radar of Manila Air Traffic Control Center encountered technical problem at around 2 p.m. that slowed down all incoming and outgoing flights. My technical people are working on it and expect normal operations by 10 p.m. (last night),” Ciron said in the advisory.

LTP prepares China Invasion

September 12, 2009

By Leithen Francis

Lufthansa Technik Philippines is hoping to secure work from China thanks to a regulatory change in the country.

The Chinese authorities are making it easier for overseas MROs to get recognition if the firm has Hong Kong regulatory approval, the company's vice-president for marketing and sales Dominik Wiener-Silva said at Asian Aerospace.

The Hong Kong authorities have recognised Lufthansa Technik Philippines, a joint-venture between the Lufthansa Technik group and Philippine Airlines' MacroAsia, as it has done overflow work for carriers there, he adds.

His company is waiting to secure a contract from a mainland Chinese carrier before proceeding with the application for Civil Aviation Administration of China approval.

The MRO firm's heavy maintenance work is focused on the Airbus A320s, Airbus A330s and Airbus A340s. But it will be adding Boeing 777 heavy maintenance capability as Philippine Airlines will get its first two 777s by year-end, he says.

Its major third-party heavy maintenance customers include Virgin Atlantic Airways and Qantas Airways/Jetstar.

Qantas announced in May that A330 heavy maintenance work will be shifting from Lufthansa Technik Philippines to Qantas engineering and maintenance in Brisbane.

But Wiener-Silva says Lufthansa Technik Philippines will still be doing the 'D-checks' on the Qantas and Jetstar A330s and it is only 'C-checks' that are moving to Brisbane in the near term.

1.6 Billion International Airport to rise in Gonzaga

September 11, 2009

Sta. Ana, Cagayan - The Cagayan Special Economic Zone and Freeport (CEZA) announced Wednesday the 3 phase construction and development of Gonzaga airport worth P1.658 billion at the 54,000-hectare economic zone.

The project is awarded under a joint-venture agreement to Cagayan Land Property Development Corp. (CLPDC) headed by Basilio Rodriguez, CLPDC President. The company is composed of CAMJ Construction, Inc., LR Land Developers, Inc., airport designer TCGI Engineers, and aviation consultant Asesores y Consultores Aeronauticos S.L. (ACA) of Spain which will run the airport under a 50 years concession contract.

Under the joint venture agreement, CEZA will invest P691 million or 41.7 percent of the total project cost while its private partner CLPDC will contribute the remaining P966 million or 58.3 percent.

The whole project involves the construction of a 2,500-meter by 45 meters International Civil Aviation Organization (ICAO) standards runway designed to accommodate narrow-bodied aircraft such as Boeing 737NG's and Airbus 320's, which has a typical seating capacity of 134 -210 passengers.

The project will also include a terminal building covering a floor area of 1,000 square meters, paved apron and tarmac that can accommodate two aircraft simultaneously, and a control tower.

The first phase of the project which is the contract signing of the feasibility proposal, is set to begin within the month and expected to be completed in a years time says Ceza administrator and CEO Jose Mari Ponce, a nephew of Senator Juan Ponce Enrile .

“Once completed, the Ceza International Airport will complement the Port Irene Seaport, which is emerging as an international transshipment hub and tourism destination in the northeastern part of Luzon,” Ponce said.

“An international standards airport with international facilities and equipment is necessary to make Cagayan freeport a viable free-port and tourism destination in Asia,” Ponce said.

Cagayan Special Economic Zone and Freeport in Sta. Ana, Cagayan is the fastest-growing industrial, logistics and tourism hub in the country with 87 locators having actual investments of P13.826 billion as 0f December 2008. It was established in February 1995, by virtue of Republic Act No. 7922. CEZA manages the Freeport and attracts new locators into the economic zone.

Among the largest investments are three leisure-resort and casino as well as other gaming support service complexes whose operations are dependent on the opening of the airport next year. The nearest airport to Sta. Ana is Tuguegarao airport which is four hours away by land travel. Cagayan is 12 hours away via land travel to Manila.

In the Masterplan, the airport is envisioned by ACA to operate under the Global Transpark (GTP) system made famous around the world by Fedex when it was first established in Subic in 1992. GTP integrates on-time manufacturing and distribution facilities with multi-modal transportation, advanced telecommunications and materials handling system to facilitate fast, flexible linkages between GTP locators, their suppliers and customers globally. The phased developments for the new airport are as follows:

Phase 1 Development Features

• Construction of 2C aerodome with 1,000m runway to accommodate large turboprop such as ATR72 and Q400 operated by local airlines;
• A parking apron that can accommodate at least two large turboprop aircraft at any one time;
• Single taxiway links between the runway and the parking apron;
• A modular terminal and administration building, with a total floor area of 500 sq.m adjoining a 30 vehicle carpark facility;
• A standard control tower for ATC services;
• A fire and rescue building with Category 6 level;

Phase 2 Development Features

• Gradual runway extension to 1,000 meters within the next 10 years to accommodate narrow-body jets such as Boeing 737NG's and Airbus 320's from Manila and other proposed international destinations;
  
• Expansion of parking apron;
• additional taxiway links between the runway and the parking aprons;
• Expansion of terminal building for another 500 sq.m and car park extension.
  

Phase 3 Development Features

• Runway extension up to 3,000 meters to accommodate wide-body aircraft such as Boeing 767's and Airbus 330's;
  
• Expansion of airside facilities;

The P25.363 million(E360,340.11) Airport study and Master Planning is being shouldered by the government of Spain while the detailed engineering design and feasibility study was awarded to Getinsa Ingenieria SL, a Spanish Engineering firm, whose contract is scheduled to be signed in October 23, 2009.

The airport masterplan will cover the two-phased airport project which will eventually have a 2,500-meter runway. Construction of Phase I of the project will be under a joint venture agreement with Cagayan Land Property Development Corp. (CLPDC). Airport construction is scheduled to start next year.

Pacific Pearl Airways firms Subic hub

Starts flying in December

Written by Henry Empeño

September 11, 2009

SUBIC BAY FREE PORT—A low-cost airline which has established its base of operations here has announced the start of its $10-million project to fly chartered planes to various tourist destinations in the country and abroad.

Pacific Pearl Airways (PPA), a private airline established in 2006, said it will begin flying out of the Subic Bay International Airport (SBIA) in December this year.

Airline president Kristoffer Jimenez, who signed the firm’s business contract with the Subic Bay Metropolitan Authority (SBMA) last week, said PPA will initially field two advanced Boeing 737-200 jets for international flights and some turboprop aircraft for local flights.

Jimenez said local destinations will initially be to popular tourism spots like Boracay, Bohol, Cebu and Davao. But as PPA begins to establish its presence in the local airline industry, the company will expand its local flight destinations.

According to the airline official, the Subic Bay Free Port has a “very strategic location.”

“A lot of tourists come here, foreigners and locals alike. It is also a booming place in terms of businesses,” Jimenez added, ticking off the advantages of locating in Subic.

To attract its potential market, Jimenez said PPA “will be offering competitive rates without sacrificing quality service costs,” an advantage he said was made possible by tax incentives and other perks offered by the SBMA.

He added that his company also intends to “eliminate stop-over hassles” with direct flights, thereby significantly cutting travel lag time.

This would allow Pacific Pearl passengers to gain more savings and more quality holidays, said Jimenez.

Meanwhile, SBMA Administrator Armand Arreza said during the contract-signing ceremonies that PPA’s $10-million investment pledge is “proof of Subic Bay’s economic resiliency.”

“What we have witnessed now proves that there’s still life after FedEx,” said Arreza, adding that the SBMA has been trying to attract more locators to the SBIA.

FedEx, the US courier giant that used SBIA as its Asia-Pacific hub since 1998, transferred its hub operations to China in February, bowing to realities of the expanding Chinese market.

Arreza, however, pointed out that because of its international airport, “Subic can host just about any kind of air-transport requirements.”

Arreza cited that the SBIA’s cargo-sorting capability has its edge over other airports in the country today.

1.6B Lal-lo Airport to Rise in Cagayan

By BERNIE CAHILES-MAGKILAT

September 9, 2009

Cagayan Special Economic Zone and Freeport (CSEZFP) awarded Wednesday the P1.658-billion contract to Cagayan Land Property Development Corp. (CLPDC) for the construction of the international airport in Lallo, Cagayan.

The project is a joint venture between the Cagayan Economic Zone Authority (CEZA) and the CLPDC as the private sector partner. The joint venture is good for 50 years.

CEZA Administrator and CEO Jose Mari Ponce and CLPDC President Basilio Rodriguez signed the joint venture Tuesday, Sept. 8. Construction of the project is expected to start within the month and be completed in a year.

CEZA is a government-owned and -controlled corporation that develops and manages the 54,000-hectare CSEZFP, an economic and tourism hub in the coastal town of Sta. Ana in Cagayan province.

Under the joint venture agreement, CEZA will invest P691 million or 41.7 percent of the total equity while its private partner CLPDC will contribute the remaining P966 million or 58.3 percent. CLPDC, established in 2008, is composed of CAMJ Construction, Inc., LR Land Developers, Inc., TCGI Engineers, and Spanish firm Asesores y Consultores Aeronauticos S.L. The Spanish firm shall be tapped to manage the operations of the airport, once construction is finished.

The project involves the construction of a 2,200-meter runway, with a width of 45 meters, following the standards of the International Civil Aviation Organization (ICAO). It will be designed to accommodate large aircraft such as Airbus A319-100, which has a typical seating capacity of 134 passengers.

It will also include a terminal building covering a floor area of 1,000 square meters, paved apron and tarmac that can accommodate two aircraft simultaneously, and a control tower.

“Once completed, the CEZA International Airport will complement the Port Irene Seaport, which is emerging as an international transhipment hub and tourism destination in north-eastern part of Luzon,” Ponce said.

As an investment hub, CSEZFP has become the preferred site of 86 foreign and domestic investors, of which 48 were already operational as of December 2008. These companies have committed to invest more than P13 billion.

“An international airport with international facilities and equipment is necessary to make CSEZFP a viable Freeport and tourism destination in Asia," Ponce said.

Data from the Air Transportation Office (ATO) show that there were 2,359 international visitor arrivals in Cagayan via the Tuguegaro City Airport from Macau and China alone in 2008. Chartered flights bring tourists to CSEZFP via Tuguegarao.

Cagayan Valley ranked as the 7th top regional destination for tourists in the country. In 2008, it generated P1.6 billion in tourism receipts from the arrivals of 670,000 visitors, including 32,000 foreign tourists.

Visitor arrivals in 2008 were up by 7.5 percent from around 623,000 tourists in 2007. In particular, the volume of foreign tourists rose by over 20 percent to 32,000 from only 26,000 a year earlier, as CEZA’s marketing campaign paid off.

A joint venture company will also be created and registered with the Securities and Exchange Commission (SEC) to manage the construction and operation of the international airport, which will cater to the locators, visitors and tourists in the bustling Freeport and economic zone.

Ponce cited the need to construct the airport in the vicinity of Barangay San Mariano and Dagupan in Lallo to provide faster connection to the rapidly growing economic hub from the rest of the country and the world.

Cagayan Freeport is at least 12 hours away from Manila by land travel. While it is accessible by air through a domestic flight to Tugueguarao City, the Freeport is still four hours away from the capital of Cagayan province.

Shenzhen Airlines introduces 3rd point to China

Flies Quanzhou, considers Kalibo and Cebu as next stop
September 5, 2009

Shenzhen Airlines, the 5th biggest airline in China, announced the launching of its third point in China after Nanning and Shenzhen, to Quanzhou in September 21, 2009.

The airline controlled by Shenzhen Huirun Investment Co. and Yiyang Co. Ltd.,was launched in 1993 by the local government of Shenzhen before it was privatized in 2005.

Shenzhen Airlines started flying to Manila in October 2007. It will fly Quanzhou four times a week with departure at 11AM for Manila and return flight at 2PM.

The airline uses 115 fleets of boeing 737's and Airbus 320's that carried 15 million passengers in 2008 and employs more than 12,200 employees.

"With our national network in place we are now developing international flight routes in Northeast and Southeast Asia. We now fly to Seoul, Kuala Lumpur, Vietnam, Singapore, Osaka and the Philippines. There will be more coming. The international operations now are focused on Southeast Asia" said Li Kun, the airline President.

Li Kun, who spent 27 years at China Southern Airlines before joining Shenzhen in December 2005 said they will open Kalibo and Cebu as part of its route network expansion after CAAC granted them more rights to fly the Philippines from the latest Air Services Agreement with China.

"We will open more international routes from China to Manila and we are also considering flying to Kalibo and Cebu on regular flight" says Li on the launching of Jinjiang flight, Shenzhen Airlines first regular scheduled flight to the country.

More than 160,000 Chinese visited the Philippines last year, pushing China as a major emerging market just behind the United States, Japan and South Korea, according to the data provided by the Department of Tourism.

Tourism Secretary Ace Durano said the launch of direct air links reflects "a growing demand" from the Chinese market, a stable source of tourists in time of the global crisis.

Top Operating International Airlines

PHILIPPINE AVIATION DATA
TOP INTERNATIONAL AIRLINES IN THE PHILIPPINES
As of June 2009
RANK	AIRLINE NAME	CODE	PASSENGERS
1	Philippine Airlines	PR	1,740,143
2	Cebu Pacific	5J	797,521
3	Cathay Pacific	CX	735,817
4	Singapore Airlines	SQ	272,008
5	Asiana Airlines	OZ	252,273
6	Northwest Airlines	NW	233,670
7	Emirates Airlines	EK	229,800
8	Qatar Airways	QR	212,798
9	Japan Airlines	JO	215,746
10	Korean Airlines	KE	196,507
TOP DOMESTIC AIRLINES IN THE PHILIPPINES
As of June 2009
RANK	AIRLINE NAME	CODE	PASSENGERS
1	Cebu Pacific	5J	3,614,966
2	Philippine Airlines	PR	3,207,060
3	Zest Airways	Z2	433,576
4	Air Philippines	2P	254,244
5	Seair	DG	83,132
Source:	Civil Aeronautics Board
DOTC, Republic of the Philippines

September 3, 2009

The Civil Aeronautics Board (CAB) reported that a total of 6.26 million passengers flew in and out of the country in the first 6 months of the year. The figure is slightly lower than 6.29 million recorded in the same period in 2008.

There were more outgoing than incoming traffic. Incoming passengers stood at 3.01 million down from 3.02 million, while outgoing passengers stood at 3.25 million up from 3.03 million.

PAL heads the list with 1,740,143 international passengers down 9% from 1.92 million in the same period last year. The flag carrier’s incoming traffic stood at 821,658 from 926,377, while outgoing passengers reached 918,485 from 989,965.

Cebu Pacific registered positive growth after they carried 797,521 international passengers, higher than the 671,738 it carried last year, owing to additional frequencies in Hong Kong and Singapore during the period.

Cathay Pacific heads the foreign airlines category by carrying the most passengers (735,817) down -0.8%, followed by Singapore Airlines (272,008), -5.2% Asiana Airlines (252,273), +74.89% Northwest Airlines (233,670) -11.54%, Emirates Air (229,800) +4.15%; Qatar Airways(212,798) +19.98%; Japan Airlines (215,746) -3.08%, Korean Air (196,507) -13.67%, Thai Airways (147,947), China Airlines (141,781), and Gulf Air (141,399).

The CAB attributed the decline in passenger traffic to the global economic slowdown. Passenger traffic is expected to slow down further in the second half due to curtailed spending habits of foreign tourists. However, the Philippines registered the lowest decline in traffic reported in Asia Pacific region with other countries registering drop of 7.6% year on year basis.

There are 43 foreign carriers with operating permits to fly in and out of the country. But only 32 airlines operated during the period with the rest either suspending or ceasing operations indefinitely.

The CAB said Garuda Indonesia cut Manila as a destination in 1997 largely due to the Asian Financial Crisis. However code-share arrangement with PAL was entered in 1998 and 2001. Canadian Airlines, the precursor of Air Canada, stopped operating in 1999, while flights of Pakistan International Airlines were also suspended on the same year due to operating losses. Air Nauru and Vietnam Airlines ceased flying to the Philippines in 2001 but Vietnam maintains a code-sharing arrangement with PAL.

In 2002, British Airways suspended operations to London due to losses mainly attributed to the 911 New York bombing while Swissair filed for bankruptcy. Meanwhile Egyptair suspended flights in 2004 due to poor loads. P.T. Bouraq filed for bankruptcy and Air France rationalized operations with KLM also in 2004 when both airlines merged its Asian operations. The latest airline that left Manila was Lufthansa in April 2008 due to stiff competition by Mideast carriers.

New International Airline operators are also lining up to fly the Philippine skies among them Afriqiyah Airways of Libya scheduled to launch services this month to Tripoli on a thrice weekly schedule via Dubai.

CAAP to defer FAA Review Again

Lack of Qualified Flight Safety Inspectors or trying to hire own men?

September 3, 2009

WASHINGTON — The Federal Aviation Administration (FAA) said that the Philippines Civil Aviation Authority (CAAP) has officially requested the agency to defer again its Safety Assessment review scheduled in October for next year after failing to hire qualified flight safety inspectors for civil airliners.

"The safety assessment review for the Philippines is scheduled next month October 2009" says Les Dorr Jr., a spokesman for the FAA in Washington."But I think its not gonna happen anytime this year."

This is the third time the Philippine government asked for deferral of compliance verification pursuant to the FAA's International Aviation Safety Assessment (IASA) program after it found the country's aviation agency non-compliant with international safety standards set by the International Civil Aviation Organization (ICAO) in December 2007. The next assessment is tentatively scheduled in March 2010.

Philippine Transportation Secretary Leandro Mendoza invited the FAA to make the review in June 2008 but got a schedule set for November 2008 to give the Philippine aviation agency ample time to complete its deficiencies but only to be told later by the Philippine government to move the review date to October this year citing "failure to hire qualified personnel" which include among others flight safety inspectors otherwise known as the "Check ride" pilot examiners in the aviation world. The examiner is responsible for airline pilot's certification and rating.

The FAA's International Aviation Safety Assessment (IASA) program assesses the civil aviation authorities of all countries with air carriers that operate flights to the United States and determine whether or not foreign civil aviation authorities are meeting ICAO safety standards, not FAA regulations.

The Civil Aviation Authority of the Philippines is addressing the issues, including working with the FAA an action plan on how to correct the areas of concern so that their safety oversight system fully complies with standards and practices set by the International Civil Aviation Organization (ICAO).

But according to ICAO flight safety consultant James Hooker, formerly hired by the Philippine government to address the problem, told that he was not surprise of the numerous deferrals as CAAP officials had been very dismissive of ICAO recommendations in the past that they would probably be rejected by FAA if they come.

Consultant Peter J. Weiss from ICAO, who currently coordinates Flight Operations Quality & Safety Systems in CAAP, replaces Hooker on the post but share the same sentiment to the extent of disapproving outright unqualified applicants to the examiner position and his assent to some qualification issues remain a thorny subject against the world regulating body. CAAP has yet to fulfill the technical requirements in areas of certification because of his objections.

ICAO is the United Nations’ technical agency for aviation. It establishes international standards and recommended practices for aircraft operations and maintenance, which includes pilot rating and certification procedures from qualified pilot instructor.

A Category 1 rating means the country’s civil aviation authority complies with ICAO standards while Category 2 safety rating means that the country’s civil aviation authority does not comply with ICAO standards.

A Category 2 rating means a country either lacks laws or regulations necessary to oversee air carriers in accordance with international standards, or that its civil aviation authority is deficient in one or more areas, such as technical expertise, trained personnel, recordkeeping or inspection procedures.

The inspection aspect tied CAAP to the wall that unless they adhere to ICAO standards, the Philippines dream of Category 1 will just remain well a dream.

Legacy Jet for the next president?

TAKIN' CARE OF BUSINESS



By Babe Romualdez

September 1, 2009

The P1.2-billion budget they were planning for GMA’s executive jet no doubt had bad timing because it came on the heels of criticisms regarding the president’s trips abroad and the lavish dinners in New York and Washington. At this time, it would be more practical and cost effective for the president to lease because she will not have to worry about the problems that have to go with maintaining an executive aircraft.

But perhaps when all the furor has subsided and when the effects of the global recession are starting to subside, people will not be so resistant to the idea of a private jet for the country’s new president – whoever he or she may be. For one, there’s the question of safety. No one will argue that the current fleet at the president’s disposal is composed of half-a-century old planes that are in dire need of some serious refurbishing – problems that afflict even the Philippine Air Force as a whole with their outdated fleet of choppers, fighter jets and other equipment.

An aircraft worth considering would be the Legacy Executive jet from Brazilian aerospace conglomerate Embraer, one of the world’s largest aircraft manufacturers. From the time the company was privatized in 1994, it has become one of the best known companies and a top exporter in Brazil. ATR Kim Eng Financial Corp. chairman Ramon Arnaiz has been quietly working through his Rako Trading Corp. to successfully acquire the exclusive distributorship of the Legacy Executive jet series in the Philippines. The new super midsize aircraft (with a $27-million tag price) on display at the Domestic Airport would be appropriate for the travel needs of the next president of this country.

Derived from the commercial jetliners ERJ-135 and ERJ-145, the Legacy Executive is configured with up to 15 seats, with a full glass cockpit that includes a Honeywell Primus 1000 digital avionics suite and color weather radar with turbulence detection. It also has a Global Positioning System and satellite communications capability. The interior cabin is built with fine-quality hardwood finishes. The cabin can be configured into a 12-seater with sideboard, tables and a three-seat sofa, and it would be perfect for any president who is not over six feet in height.

In 2004, Embraer delivered its first Legacy Executive jet in Macao through the Legend Development Company of David Chow, and Ramon is hoping the Philippines wills see its first Legacy aircraft in the next couple of years. Although the market for midsize jets may still be relatively small, they will try to market it aggressively and simulate the success of Embraer over the years. Although the flagship line is the popular Legacy 600 which began flying in 2002, Embraer has announced two new models, the Legacy 500 and the Legacy 450, which will enter service in 2010 and 2013, respectively. In November last year, the Brazilian conglomerate (with headquarters in Sao Paolo whose facilities boast of a 5,000-m runway that is said to be the third longest in the world) received a total value order of over $208 million for its Legacy series, including from Middle East customers.

While the Brazilian conglomerate’s closest competitor is Canadian manufacturer Bombardier, it has been cutting into the US market and is giving Boeing and Lear jets a run for their money. As a matter of fact, the company has maintenance and commercial offices in Fort Lauderdale in the US and in Paris, Singapore and Beijing. The market in the US however may be a little difficult at this time considering the global financial crisis, with American businessmen selling off their private aircraft. About two weeks ago, the US Congress also announced it was scrapping plans to buy four new executive passenger jets worth $550 million for the Air Force. It’s also dropping plans to refurbish jets for the use of government officials.

It can be recalled that some Congressmen almost went ballistic when automobile executives asking for government bailout money flew into Washington with their executive jets – prompting one irate lawmaker to comment that it was ironic for auto executives to fly to Washington with a begging bowl in hand. Early this year, Citigroup had to drop plans for the purchase of a $50 million Dassault Falcon jet it ordered in 2005 even though it would have to pay huge penalties due to severe criticism from legislators and ordinary Americans, with Barack Obama also commenting that buying jets was not the best use of money by companies receiving government bailout funds.

Embraer though continues to be optimistic with the future of the company, breaking ground for its first US assembly plant in December last year. According to former Embraer president and CEO Mauricio Botelho (who is credited for turning the flagging, state-owned company into the 4^th largest aircraft manufacturer in the world), their strategy has been to take on the competition by “offering products with the latest technology and more competitive operating costs,” anticipating better profit margins in the area of executive aviation than in commercial aviation. There are now over 130 Legacy aircraft operating in more than 23 countries, including China and India – and hopefully soon, the Philippines.