Domestic Air Transport Soars in 2010

Up by 15% in first quarter

May 27, 2010

Manila - Passenger traffic in the Philippines increased almost 15 percent while cargo traffic grew by more than a third in the first three months of 2010, government data from the Civil Aeronautics Board showed.

Cebu Pacific carried the most number of passengers at 1.97 million, up 22 percent from 1.61 million followed closely by Philippine Airlines which carried 1.41 million passengers, down however by 8 percent from 1.5 million.

Other domestic airlines, such as the Zest Air, Air Philippines and Southeast Asian Airlines also managed to register increase in number of its passengers with the following figures; 251,765 (up 120 percent), 202,892 (up 63 percent), and 68,757 (up 61 percent). Their load factors stood at 68 percent, 66 percent and 79 percent.

The number of airline passengers in the country reached 3.89 million as compared to 3.4 million passengers in 2009.

Average Load factor however remained at 79% due to 15% increase in seating capacity equivalent to 4.93 million according to CAB.

Cebu Pacific accounted for more than half of the total passenger traffic and its load factor increased to 82 percent from 81 percent. Meanwhile, Philippine Airlines load factor declined to 79 percent from 80 percent.

Cebu Pacific also carried 1.97 million kilos (up 22 percent), Philippine Airlines 17.63 million kilos (up 38 percent), Pacific East Asia Cargo Airlines 594,979 kilos (up 8 percent), Air Philippine 284,151 kilos (up 49 percent), and Seair 92,534 kilos (down 9 percent).

Consolidated cargo output in the first quarter grew 37 percent to 39.1 million kilos from 28.6 million kilos in the same period in 2009.

SF-260 Up for Delivery

New trainer planes to join PAF fleet

By Jay Chua

May 20, 2010

THE Air Force will receive the first batch of 18 brand new SF-260 basic training aircraft next month to augment the present squadron of trainer aircraft based at the Air Education and Training Command in Fernando Air Base in Lipa City.

The Italian-made SF-260 is a propeller-driven, two-seater plane that has been the backbone of the PAF training schools for the past decades.

The brand new aircraft were assembled at the Clark Air Base facility. The whole package would cost the government P661 million.

Air Force chief, Lt. Gen. Oscar Rabena said the 18 trainer aircraft will be fully delivered before Air Force Day celebration on July 2.

Rabena said the PAF has still six S-211 jet trainers and these would soon be replaced by similar jet trainers but of the "generic" kind.

"We were ordered to submit the generic types of jet trainers to choose from that would be able to satisfy the technical specifications of the AFP," he said.

He said they are now choosing models from Europe, the United States and even Asia.

Rabena said the purchase of the next combat helicopter is awaiting the signature of Defense Secretary Norberto Gonzales.

"We’re getting eight combat helicopters at a cost of three billion pesos," Rabena said.

He said these new generation of choppers are capable of higher payload, and better maneuverable capability.

The new choppers, made in Sokol, Poland, would replace the ageing UH-IH "Hueys" in the inventory of the PAF.

PAF has a fleet of seven Hueys purely for search and rescue mission, while 34 Hueys are scattered in some PAF centers ready for various missions. –

Chopper falls from the sky!

Kills four

May 17, 2010

Lucena City - A private helicopter with registry number RP-C2550 and carrying Quezon Gov. Rafael Nantes has crashed in Lucena City Monday afternoon killing all 4 people on board.

The victims were identified as Gov. Nantes, pilot Capt. Nestor Sanchez and security guards Fred Dominguez and a certain PO1 Lucero.

The two other fatalities were civilians who was hit by a falling chopper that consequently caused fire to two houses at Jaen Subdivision in Lucena.

The Robinson 44 Raven II type helicopter with msn 11689 was operated by Lion Air. It took off at the general aviation hangar in Manila around 7:21 a.m. with a flight plan for Manila-Lucena-Manila.

Initial reports points to mechanical failure as cause of the crash after the helicopter took off at around 3:10 p.m. It fell about a kilometer from the takeoff point 5 minutes later.

Manila Breaches World's Top 30

Now the 29th largest international airport
by number of international passengers

May 17, 2010

International Passenger Traffic Monthly Ranking

January 2010

Last update: April 15 2010

International Passengers






4 500 269




3 829 000




3 795 602




3 785 730




3 279 421




3 194 482




3 039 916




2 935 404




2 701 078




2 611 422




2 135 287




1 797 213




1 732 919




1 656 383




1 630 461




1 559 924




1 546 401




1 511 321




1 448 867




1 411 539




1 324 926




1 321 907




1 235 669




1 208 371




1 156 015




1 142 278




1 110 253




1 095 684




1 071 113




1 016 054


Airports participating in ACI's Monthly Traffic Statistics Collection. Results are preliminary.

CAB halts CEB "no refund" policy


May 13, 2010

The Civil Aviation Board (CAB) has suspended the “no refund” policy for the promo fares of Cebu Pacific Air while a review on the policy is ongoing with the aim of coming up with a new policy that is more consumer friendly.

Trade and Industry undersecretary for consumer welfare Zenaida C. Maglaya said that the CAB decision was made after DTI called the CAB to a meeting to address complaints of Cebu Pac passengers with unused promo fare tickets but which the airline refuses to refund.

Airlines, including their promo fares, are under the CAB.

With the suspension of the “no refund” policy, Maglaya expects Cebu Pacific to refund the unused promo tickets.

“These passengers have been left because they arrived late in the airport and are now complaining because Cebu Pacific does not refund their tickets,” Maglaya said.

“That is not fair even if they write it down and even if passengers are properly informed of the no refund policy,” Maglaya said.

Maglaya said that Cebu Pacific told them that the no-refund policy is contained under the Terms and Conditions for the budget promo fares. For the regular fares, passengers get a refund but not the entire paid amount.

The DTI has specifically asked CAB to look at the promo collaterals of the airline or the promo details and terms of conditions, which are written in fine prints.

“In our case in the DTI, we always look at the fine prints for every promotional activity that is under our jurisdiction,” she said.

Although the complaints have been lodged against Cebu Pacific alone, Maglaya, however, said that a customer friendly policy by airlines should not only cover to Cebu Pacific, the only local carrier that has been aggressively into promo fares, but to all carriers that operate in the country as well as those that fly into the country.

“The review of the rules governing airlines’ promo fares is to find out what would really be is the best interest of consumers,” she said.

“I understand that under the regular fare, passengers are refunded although not the full amount but for budget promo fares they don’t get any refund at all,” Maglaya said.

Maglaya said the mounting complaints have been lodged by Cebu Pacific passengers, who failed to catch up their flight.

PAL's $46 Million Dilemma

by Lenie Lectura
13 May 2010

PHILIPPINE Airlines (PAL) has yet to determine how it will be able to repay $46 million worth of debt due early next month.

PAL president Jaime Bautista said the flag carrier is scheduled to pay creditors about $46 million by June 7. The amount is part of the flag carrier’s $2.3-billion debt which has now actually gone down to over $1 billion, added the PAL official.

“Our debt balance is more than $1 billion. There is a maturing amount [by] June 7 which is about $46 million. It’s a principal payment which is scheduled to be paid once a year,” said Bautista.

The PAL official did not say how the carrier will source payment for the maturing debt. “We will try our best. It’s really a challenge.”

On top of the yearly $46-million repayment, PAL is also obliged to pay $10 million every month. “Yes, we are paying $10 million monthly,” added Bautista.

PAL is in talks with prospective investors but nothing has been firmed up as yet. “Investors are looking for the following: profitability, growth and competency. Aside from being profitable, there should be growth. We also should be sufficient and must have the capability to compete with other airlines,” said Bautista.

The airline was supposed to lay off 3,000 workers effective June but the labor department directed PAL to suspend this until the labor dispute with the PAL Employees Association is still under the jurisdiction of the agency.

The flag carrier said was supposed to implement the next phase of its restructuring program, starting with the spin off of its inflight catering services; airport services, including ground handling, cargo terminal/cargo handling and ramp handling; and call center reservations at the close of business hours on May 31.

Bautista emphasized that PAL needs to pursue the restructuring plan due to several factors that are beyond the airline’s control. These include unabated liberalization of the commercial aviation industry to the detriment of local players like PAL; the worldwide economic recession that led to a crippling slowdown in passenger traffic; record-high oil prices in 2008-2009 and the continuing increase in the price of aviation fuel, which account for nearly half of PAL’s operating expenses; downgrade of the Philippine aviation sector to Category II by the United States that prevents PAL from using brand new long-range aircraft or increasing flights to the US; and the subsequent blacklisting of Philippine carriers by the European Union, ruining the reputation of even those airlines with outstanding safety records like PAL.

He cited PAL’s financial situation which continues to deteriorate, with the company sustaining over $350 million (or more than P15 billion) in losses during the last two fiscal years. Its equity has also dropped precipitously to a little over $1.1 million as of February.

“For our fiscal year ending March this year, it will still be a loss,” said Bautista. In spite of this predicament, PAL posted “better-than-expected” revenues for January and February this year.

Cathay Pacific moving to Terminal 3

Two others to follow before year end

May 11, 2010

Manila - The Philippines biggest foreign-owned carrier in terms of passenger traffic is relocating to its new home in Ninoy Aquino International Airport (NAIA) Terminal 3 by June, says an airport executive over the weekend.

"Cathay Pacific Airways is moving its home from Terminal 1 to the more luxurious Terminal 3" says Airport Manager Melvin Matibag. The airline has already requested MIAA for a lounge in NAIA T3 and is scheduled to transfer to the terminal by next month.

New Carriers
The Hong Kong-based airline is one of those foreign carriers invited to relocate to the new facility two years ago in a bid to de-congest the growing volume of passenger traffic at Terminal 1. The other airlines in discussion with the airport operator were Singapore Airlines, and still unidentified carrier which the manager refused to divulged as of press time.

"The airline's Technical Team from Hong Kong were already sent to inspect and evaluate the facilities at Terminal 3 and its all systems go for them" the manager adds.

"Cathay Pacific is requesting for a passenger lounge in the terminal. So too are the two other airlines who are also moving by July since they have premium passengers to serve", said Matibag.

Full Operations
The airport manager said they are fast-tracking the construction and installation of airline lounges in terminal 3 as they are about to complete the construction of terminal 3 by June. Full operations of the Terminal is scheduled at the end of the year.

According to Matibag they are negotiating for the rehabilitation and repair of some of the 24 boarding bridges for use of the relocating airlines.

More business establishments are also expected to move in Terminal 3. National Bookstore is opening a branch in Terminal 3 beside the Island Souvenir shop. More food concessionaires are likewise lining up to operate at the international wing.

Before yearend, the four terminals at NAIA will also be connected via airport shuttle for the convenience of the airline's passengers. Matibag said that MIAA is already negotiating with Metro Coaches to operate a free shuttle service connecting Terminals 1, 2, 3 and Domestic. The proponent will recover the cost of its service via advertising.

“We are also negotiating with the two other international airlines last week. We expect to conclude discussions with them before the end of June,” the airport manager said.

Other carriers
Meanwhile, MIAA is also convincing four other Middle Eastern airlines to transfer their operations at the new Terminal. The airlines are those coming from the UAE, Qatar, and Bahrain.

"We want to showcase this terminal to the world because it was built for international passengers,” said Mr. Matibag.

At present, three budget airlines operate at Terminal 3 with Cebu Pacific as its most prominent tenant followed by PAL subsidiary budget carriers Air Philippines and PAL Express. However, only Cebu Pacific operates both domestic and international flights from the said terminal.

Cebu Pacific earlier wanted to take Terminal 3 all for themselves as they are projecting to fill its 13 million capacity by 2014. The airline carried close to 9 million passengers in 2009.

The airport authority however declined the request because of the present congestion recorded at Terminal 1 which now handles close to 6 million passengers. Terminal 1 has a design capacity of only 4.5 million passengers but can fill at maximum 6 million passengers per year.

"Cathay Pacific's move out of Terminal 1 is already a big relief because it takes 1.2 million out of the congested terminal. With two others moving, another1 million should be taken out. So, we'll easily have at least 2.2 million out of terminal 1" said Matibag.

The Airport administrator said that with the eventual transfer, all terminals will have a fairly efficient utilization rate as compared to the present set up, as all terminal will then have flexible capacity for future growth in the short term.

Terminal 2 expansion to open 2014

Eyes BOT for the Project

May 10,2010

Manila - Manila International Airport Authority (MIAA) has announced its plan to expand the current centennial terminal (Terminal 2) to Nayong Pilipino by 2014 to anticipate the projected increase in passenger traffic to the Philippines premiere airport by 2016 says Melvin Matibag, MIAA General Manager.

The airport which currently handles more than 24 million passengers from four terminals is projected to breach maximum capacity of 35 million passengers per year by 2016 adds Matibag.

"The planned Terminal 2 extension could house the low-cost carriers' operations and possibly cargo services" says Matibag in a press briefing.

The plan according to him is to transfer the operations of the low cost carriers to Terminal 2 and relocate the operations of Philippine Airlines to Terminal 3 together with other foreign carriers going to the east.

He however discussed the possibility of usage by current Terminal 2 tenant, Philippine Airlines which has been operating at the terminal close to its maximum design capacity of 10 million passengers per year.

The centennial terminal has a current capacity of 7 million passengers per year. But Philippine Airlines already breached its capacity in 2007, and still the airline is expected to add one million more passengers this year from the current 9.3 million passengers it carried in 2009 based on Civil Aeronautics Board(CAB) figures. It already transferred the operations of its low cost subsidiary Air Philippines and Pal Express to Terminal 3 since it opened in 2008 to help alleviate congestion at the terminal.

"Based on international standards, terminal two is already congested and we need to address that problem soon,"

"By 2014, Terminal two could be serving 14 million passengers or almost twice its intended capacity unless we do something" said Matibag.

"To do the expansion we need to acquire first the lot of the adjacent Nayong Pilipino which owns the land to which the Philippine Village Hotel now stands." Matibag adds.

While both institutions are all owned by the government, Nayong Pilipino Foundation is a government owned and controlled corporation which has a separate corporate identity from Manila International Airport Authority.

The extension project of Centennial Terminal 2 has been deferred for five years because of the litigation involving Nayong Pilipino and owners of Philippine Village Hotel. PAL offered to build the extension in 2007 but was hampered by the legal dispute at Nayong Pilipino. The Supreme Court recently upheld in January 2009 the lower courts order terminating the lease contract executed in 1975 for default lease payment in 2001. The hotel building was also forfeited in favor of Nayong Pilipino which it now controls.

Atty. Matibag said that the village hotel building is planned to be incorporated in the design of the expanded terminal 2 complex. The construction work is expected to be undertaken through build-operate-transfer (BOT) scheme.

“Right now, we are merely leasing one hectare of their property and we are using that space for parking,” said Matibag.

Currently, the Department of Transportation and Communication (DOTC) is looking into the legal aspect of the agency’s intention to acquire the rest of the property and the terms of the BOT contract to avoid a repeat of the terminal 3 fiasco.

Nayong Pilipino executive director Charito Planas revealed that negotiations were already undertaken between the two agencies as to the terms of reference (TOR) as the transaction merely require the approval of the President of the Philippines, but left the technical details of the talk to the panel preparing its approval.

According to Executive Order 615 issued on April 15, 2007, the park’s 15 hectare property adjacent to Terminal 2 in Pasay City is set to be transferred to Philippine Reclamation Authority (PRA) in exchange for equivalent size lot at the reclamation area to be used for construction of the new Nayong Pilipino Complex in Parañaque City.

MIAA expects to generate P1.6 billion pesos in net revenue for 2010 from operating four terminals. It already recorded a net income of P410 million in the first quarter of the year, higher by 4 percent as compared to the P394 million posted in 2009.

The airport also expects to collect P2.8 billion pesos from 26 million passengers. Revenues from passenger-terminal fees already jumped 13 percent to P702 million in the first three months of the year. Security related charges also increased 13 percent to P216 million due to the more international departures as compared last year.

International-passenger movement improved nearly 10 percent to 3,084,303 in the first quarter compared to the same period last year, while domestic passenger movements increased by almost 14 percent to 3,379,761 during the period.

Meanwhile, the airports rental revenues and concessions privilege fees grew almost flat at P294 million and P151 million, respectively due to still unresolved issues at terminal 3, while aeronautical fees declined 4 percent to P494 million due to foreign exchange losses.

One good thing about Terminal 3 is that passenger numbers went up by 15 percent to 1,737,451 in the first quarter while flight movement grew almost 8 percent to 16,468 during the period.

Its current tenant, Cebu Pacific expects to carry 10 million passengers in 2010. The new terminal has an annual design capacity of 13 million passengers with 20 million passengers as its maximum accommodation per year.

Terminal 3 boast of 20 contact gates and eight remote stands while Terminal 2 on the other hand only have 12 contact gates and 2 remotes.

CAAP Asked ICAO For Safety Re-audit

May 9, 2010

Montreal – The Philippine aviation regulators has formally asked the Canada-based International Civil Aviation Authority Organization (ICAO) to conduct re-assessment of the country's aviation status and lift its Serious Safety Concern (SSC) tag on its airspace.

In a statement, Alfonso Cusi, CAA Director General, said the CAAP has already conformed to the remaining concerns raised by ICAO in its Corrective Action Plan (CAP). These include upgrading the technical skills of CAAP personnel overseeing international flights and more oversight of small domestic aircraft.

“We believe that we have fully completed all the requirements imposed by the regulatory body,” Cusi said.

The ICAO’s technical report in 2006 was the basis of the US Federal Aviation Administration’s (FAA) category downgrade of the country's safety rating to Category 2 in October 2007. EU's European Aviation Safety Agency (EASA) also banned Philippine carriers in 2010 after the ICAO's recent technical report in 2009 stating no recent improvements on the country's oversight.

The international regulator's latest report on the Philippines dated October 2009, noted that its CAA had more lapses in meeting international aviation standards imposed by ICAO.

“We have been working hard to remedy the deficiencies for two (2) months now, and we think that now is the right time to ask them” Cusi said.

The aviation authority substantially performed the following deficiencies,which includes:

- recent certification of 9 out of 10 operators implementing international flight operations;

- surveillance inspections of 9 operators conducting international flight operations;

- certification of 14 out of 39 operators engaged as domestic taxis, chartered and aerial works utilizing aircraft with 19 passengers or less;

On March 15, 2010, CAAP hired 50 qualified ICAO-trained Qualified Technical Personnel for the Flight Standard Inspectorate Services, the office responsible for safety oversight of Air Operators.

“Eighteen Air Operators have a definite deadline until December 1, 2010 to complete their certification process otherwise their operations will be suspended,” Cusi said.

These inspectors conduct surveillance inspections including post certification audits of all Air Operators under the close supervision and guidance of the resident ICAO experts.

Meanwhile, Director General Cusi said they have not received confirmation of late on the visit of the European Commission (EC) this month to conduct audit on the country’s aviation safety.

"While we are preparing for the next FAA (US Federal Aviation Administration) audit, right now we are more focused on the ICAO and EU requirements because they are a lot easier than the issues imposed by the FAA" Cusi said during the Department of Transportation and Communication (DOTC) Retrospective Forum.

Cusi adds that some of the issues raised by the FAA entails a longer process to resolve as compared to the ICAO's CAP, and that they would work fully for FAA issues after complying the Corrective action plan.

PR A320 hits 5J ATR at Tacloban airport

By Joey A. Gabieta
Inquirer Visayas

May 7, 2010

Tacloban —The operation of the Daniel Z. Romualdez Airport was suspended late Friday afternoon after a Philippine Airlines plane hit the wingtip of a Cebu Pacific aircraft.

The Cebu Pacific plane was finishing boarding procedures and was about to depart for Cebu at around 4:25 p.m. when the accident happened.

The Philippine Airlines plane had just arrived from Manila and was taxiing on the runway when one of its wings hit the wingtip of the Cebu Pacific plane, airport officials said.

The PAL plane had more than 100 passengers while the Cebu Pacific plan had 56 passengers, but no one was reported injured.

However, hundreds of passengers were stranded airport cancelled the early evening flights.

In a statement e-mailed to the Inquirer, Cebu Pacific confirmed the incident, saying its ATR 72-500 aircraft, while parked and finishing boarding procedures for its Tacloban-Cebu flight (5J-429), was hit at the wingtip by an incoming PAL A320 aircraft which was taxiing after arrival.

No one was injured among the 59 passengers, the statement said.

It added that a CEB mechanic and a quality inspector are already on a CEB flight from Manila to assess the damage and determine if the aircraft can be released to fly back to Cebu.

Cebu Pacific flies Manila-Surigao

Starts flight on June 17

May 6, 2010

Manila - Low cost carrier Cebu Pacific will fly Manila- Surigao and vice versa starting June 17, 2010 using ATR 72-500 aircraft. Its Cebu-Surigao service started last November 2008.

“With the addition of new flights from Manila to Surigao on June 17, CEB will operate a total of 51 domestic routes. This is in line with the expansion of our services within the country, to offer our trademark low fares to more Filipinos,” said CEB VP for marketing and distribution Candice Iyog.

The airline is offering a promotional ‘Go Lite’ P999 seats sale from Manila to Surigao from May 5-7, 2010, for travel on June 17-September 30, 2010. Those who have check-in luggage will just add P100 upon booking.

CAAP installs new radar

By Rudy Santos
Philippine Star

May 2, 2010

MANILA, Philippines - A new P300-million radar covering the entire air space of the Philippines has been installed at the Civil Aviation Authority of the Philippines to replace an old system.

CAAP Director General Alfonso Cusi said the ALS 2000 would give air traffic controllers one million square miles of airspace to track down aircraft, compared with the old system’s limited radius of 250 nautical miles.

It will be integrated with four existing ground radar and 10 very high frequency radio equipment spread throughout Luzon, Visayas and Mindanao, he added.

Acting Tranportation and Communications Secretary Anneli Lontoc said the new radar would enable air traffic controllers to guide aircraft better and have them fly closer to each other. It would meant savings on fuel which also translates to on-time arrivals, she added.

At the end of June, the ALS 2000, which has 12 radar consoles, will replace the obsolete, 15-year-old Eurocat, which has only four radar scopes.

PAL ordered to withdraw termination notices

By Vito Barcelo

May 1, 2010
Justify Full
The Labor Department on Friday ordered Philippine Airlines’ management to recall all the notice of terminations it issued to an estimated 3,500 workers last week, and following a mediation hearing presided by Undersecretary for Labor Relations Rosalinda Baldoz.

Airline officials led by president Jaime Bautista and unions officials headed by Gerardo Rivera agreed to meet again at the airline’s boardroom on May 5, before the next meeting with Baldoz on May 7, according to a copy of the minutes of the mediation hearing.

A Labor Department official said airline officials discussed the carrier’s latest financial statement—copies of it were later furnished the Philippine Airlines Employees Association—which prompted the Lucio Tan-owned airline to decide to outsource non-core services like reservation, ground handling and catering.

An airline official later confirmed that the catering service had already been awarded to SkyKitchen Philippines, and not LSG Sky Chefs as earlier reported.

Leed by Cebu-based businessman Manuel Osmeña, SkyKitchen Philippines provides in-flight meals for Cathay Pacific, Qatar and Cebu Pacific.

Philippine Airlines said it expected to save about $1 billion a year in operating costs after it shall have spun off the catering and two other non-core services.

The airline on March 16 signed an agreement with ePLDT Ventus that authorized it to start taking reservation and other calls from the airline’s customers.

But after the Labor Department assumed jurisdiction over the outsourcing dispute, Labor Secretary Marianito Roque ordered both the labor union and the airline’s management to maintain the status quo and to “refrain from committing any act that might exacerbate the situation.”

As a result of the order, the airline assured the Commission on Elections of an uninterrupted transporting of passengers, cargo, ballots and other election materials leading to the May 10 elections.

“PAL’s scheduled spin-off and restructuring programs are on hold while the PALEA cannot engage in any mass action, work slowdown, stoppage or go on strike without violating the order of the Department of Labor and Employment,” the airline said in a statement.