Gov't intervenes against PAL outsourcing

Assumes jurisdiction to prevent strike

April 28, 2010

The Department of Labor and Employment (DOLE) has assumed jurisdiction Tuesday to resolve labor dispute against retrenchment plan at Philippine Airlines (PAL) and ordered its management to defer the decision to terminate 3,000 of the company’s 7,500 employees on May 31, 2010 after the PAL Employees Association (PALEA) filed notice of strike against the ailing flag carrier.

DOLE also ordered PALEA to refrain from doing any act that could paralyze the operation of the airline to the detriment of its passengers pending the resolution of the dispute which remains to be the biggest challenge of the labor department to date.

The Labor Department has 30 days to resolve the dispute before the employees are permitted to legally strike under Philippine Labor Laws. The department said it would meet with both the union and the company’s management on April 30 to try to resolve the issues.

An airline is considered by jurisprudence as an industry indespensable to national interest that require the governments intervention to avoid disruption of air transport services.

The government has been asked to bail out the airline following the footsteps of Thai and Malaysia airlines but the government refused to invest in the flag carrier considering its present state of finances.

PAL recently announce the planned outsourcing earlier this month in a bid to boost its profitability amidst losses it incurred during the last three years, mainly because of fuel price increases and the worldwide recession that followed affecting travel demands around the world to which the airline was badly affected. Most of the airline's revenues were derived from its international operations.

The airline recently awarded the reservations and customer supports center to a PLDT subsidiary which service is expected to take effect on June 1.

PLDT Bags PAL Reservations

April 23, 2010

Telecom giant Philippine Long Distance Telephone company (PLDT) subsidiary ePLDT Ventus, has won the bid to provide reservations and call center service requirements of Philippine Airlines (PAL) which the airline earlier announced to be outsourced as part of the company’s restructuring and cost-cutting, program.

PAL president Jaime Bautista and ePLDT Ventus president Maulik Parekh signed the agreement yesterday. The contracts key feature is the provision for ePLDT Ventus to extend job offers to all affected employees of PAL’s reservations sales units in Manila and Cebu, and Mabuhay Miles Center, which will be phased out on June 1, 2010. Affected staff of PAL’s reservations sales and Mabuhay Miles Center will be given first priority in filling the approximately 600 agent positions at ePLDT Ventus.

The agreement calls for ePLDT Ventus to provide a dedicated team of call-center agents on a 24-hours-a-day, seven-days-a-week basis to service the broad range of PAL’s requirements.

These functions include reservations and ticketing, including schedule and fare inquiries, flight booking, change or cancellation of booking, issuance of tickets, and advance seat reservation; general inquiries, including flight arrival and departure information, inquiries about routes and destinations, documentation requirements, and journey-related information; and tour bookings, including inquiries and booking of the Swingaround and PALakbayan tour products.

Also outsourced to Ventus are the following functions: Mabuhay Miles services, including program information and member benefits, membership inquiries, profile updates, account status, award flight booking and ticketing; disruption handling, including notification of passengers in cases of flight schedule changes; fulfillment, including back-office services; and special services, including coordination of group bookings, arrangement of special passenger handling (medical cases, special meal requests, etc.), and email handling.

Interisland plane crashed in Pampanga

Kills three, saves three others

April 23, 2010



Clark - An Interisland Airlines Antonov 12BP cargo plane (UP-AN216, msn402001,cn51) crashed Wednesday in San Patricio village, Mexico town, Pampanga while attempting to land at its destination airport in Clark.

Three crew were killed and three others were rescued by villagers from the burning wreckage. Mexico town police head Superintendent Ferdinand Perez identified the fatalities as Russian ground engineers Mikolay Bannon and Vadim Yakimov and Bulgarian crew member Tzvitoslav Guetchevski whose remains were found "beyond recognition".

The survivors were pilot Yuri Tochocony, 50, co-pilot Dmitri Straminski, 39, and crewmember Bokadier Ruchev, 34.

Tochony said he and the two other survivors ran to safer ground after jumping from the plane. He further said that only one of the crewmen was at the cargo cabin in the middle section of the aircraft at the time of the crash, while he and the four other crewmen were inside the cockpit.

Initial investigation showed that the cargo plane which came from Mactan, Cebu on a routine chartered flight by the Pacific East Asia Cargo Company in behalf of cargo forwarder United Parcel Service (UPS) encountered a short circuit at about 8:50 p.m., triggering a fire inside the aircraft. Clark's tower lost communication with the aircraft at 9:10 p.m.

Russian pilot Yuriv Tochonyy called the tower for an emergency landing but was forced to make landing in Barangay Laput in Mexico, Pampanga and crashed landed about 22 miles (35 kilometers) south of Clark airport.

"The pilots were already in communication with the tower before they declared an emergency" said Alfonso Cusi, director-general of the Civil Aviation Authority of the Philippines. He added the plane was only 10 minutes away from landing when it crashed.

"The cause of the crash looks to be a technical problem with the aircraft's electrical system," says Cusi.

Aircraft investigators from the Civil Aviation Authority of the Philippines have already retrieved the plane's black box and voice recorder. However, investigators could not immediately examine the voice recordings in the black box because they were in Russian.

The aircraft owned by ATMA airlines of Kazakhstan was on a wet lease to Interisland, says Cusi. It first flew as CCCP-11976 in October 14, 1963.

Cusi said two task force were organized, with the first looking on the cause of crash, while the other team would look into documents and records of how the aircraft was able to obtain an Airline Certificate of Conveyance and airworthiness certificate.

Interisland operates a fleet of four aircraft mostly manufactured in the 60's for charter passenger service and cargo flights.

PAL, Gulf Air not keen on more Bahrain flights

Protest new ASA

By Lenie Lectura
April 22, 2010

FLAG carrier Philippine Airlines (PAL) is not interested in mounting flights to Bahrain even if the government’s air panel just recently concluded amending the air services agreement (ASA) between the Philippines and Bahrain.

A PAL executive pointed out that not even Gulf Air wants to fly to Bahrain given the many unutilized entitlements. “There is over capacity in Bahrain. There are so many flights between Manila and Bahrain. Gulf Air is not supporting the additional air entitlements. There is only one group that wants this and that is Bahrain Air,” said PAL president Jaime Bautista. Bahrain Air is the second flag carrier of the Kingdom of Bahrain. The low-cost airline currently flies to the Middle East, Africa and South Asia. It started operations in February 2008 and uses an Airbus A320 fleet.

On March 30, the Philippines and Bahrain amended the air pact between the countries. Under the new deal, four weekly flights to the Manila-Bahrain route were added. Of these new flights, three can only be utilized if there are corresponding flights that would be used in Clark, said Civil Aeronautics Board (CAB) executive director Carmelo Arcilla.

“Of the four, one entitlement was granted without any condition. The remaining three can be utilized only if these three entitlements will also be used in Clark,” said Arcilla.

The amended air pact with Bahrain brings to 54 the total number of flight entitlements with the Philippines. The Manila-Bahrain route now has 12 flight entitlements; seven flight entitlements to Cebu; 28 to Clark and seven to other points except Manila and Clark. “There is no need to add more rights in the Middle East. There are almost 70 weekly flights between Manila and the Middle East. All these have connecting flights to Europe. If this trend continues, we will not be able to fly to Europe anymore,” said the PAL official. The company discontinued flying to European destinations in the 1980s.

The flag carrier, however, is interested to fly to Siem Reap in Cambodia; Bombay in India, and a new route in China. “Cambodia has many tourist that in the Philippines. The market is for tourists. We would also want to fly to India via Bangkok but the Thailand government prohibits us to pick up passengers there, citing 5th freedom rights. We are now doing the ground works before we seek the assistance of the CAB to talk to its counterpart in Bangkok,” said Bautista.

The CAB is part of the Philippine air panel which negotiates for traffic rights with other countries.

The Philippine air panel is composed of officials from the departments of Transportation and Communications, Foreign Affairs, Tourism, and Trade and Industry, the CAB and representatives of the airline firms.

5J Buys Seven more A320's

Confirms Option

April 22, 2010

Delivery Schedules
  • 2010- three A320
  • 2011 - three A320
  • 2012 - four A320
  • 2013 - five A320
  • 2014 - seven A320
Toulouse - Philippine carrier Cebu Pacific has placed a firm order for seven more Airbus A320 aircraft powered by CFM56 engines in a deal worth $1.4 billion, Airbus announced Tuesday. This increases Cebu Pacific's A320 order backlog to 22 jets, set for delivery between the last quarter of 2010 and 2014.

Lance Y. Gokongwei, president of Cebu Pacific operator Cebu Air, Inc., said in a press briefing yesterday that it will expand its fleet over a five-year period to meet growing demand for low-cost air travel.

“We are buying 22 more new aircraft and by 2014 we will have a fleet of 51 aircraft and the largest A320 fleet in the Philippines. The aircraft will start arriving between 2010 and 2014. The reason is that the demand for our services has been very good so we want to increase our capacity,” Mr. Gokongwei said.

Cebu Pacific has a current fleet of 29 aircraft majority of which belongs to the A320 family. They also operates 8 ATR 72-500 deployed to smaller airports across the country.

Rockwell Collins avionics was chosen by Cebu Pacific Air to provide a full suite of communication, navigation and surveillance systems as baseline equipment for the airline's 22 new Airbus A320 aircraft.

Mr. Gokongwei said the purchase of new aircraft would be covered by internally generated funds and export credit.

“The purchase doesn’t depend on the IPO. It’s actually a combination of funding strategies. We will reconsider the IPO after the elections but there really isn’t a definite timeline on that,” said Mr. Gokongwei.

Gokongwei further said that three Airbus A320s will be delivered in the last quarter of 2010; another three will be delivered starting June towards the end of the second half of 2011; four units by 2012 ; seven by 2013; and five by 2014.

By the end of 2014, Cebu Pacific’s fleet size would have grown to 51—composed of 10 Airbus A319s, 33 Airbus A320s, and eight ATRs. The airline now has 10 Airbus A319s; 11 Airbus A320s; and eight ATRs for a total of 29 aircraft.

“By 2014, Cebu Pacific will have the largest Airbus A320 fleet in the Philippines, and the second-largest in Southeast Asia. Cebu Pacific will also double its seating capacity in the next five years,” said Gokongwei.

Starting October 27, 2010, the airline will add new frequencies from Manila to Cagayan de Oro (six times daily), Zamboanga (thrice daily), Pagadian (five times weekly), Davao (six times daily), Tagbilaran (twice daily), Coron (12 times weekly) and Kalibo (16 times weekly). International flights to Taipei will become daily starting Oct. 31, 2010, and Jakarta flights will be four times weekly starting Dec. 19, 2010 while flights to Seoul will be twice daily starting Jan. 24, 2011.

The airline will also add more frequency to the following domestic destinations starting Nov. 24, 2010, and they are as follows:
  • Manila-Boracay (79 times weekly),
  • Manila-Cebu (13 times daily),
  • Cebu-Boracay (twice daily),
  • Cebu-General Santos (daily),
  • Cebu-Puerto Princesa (daily), and
  • Cebu-Bacolod (twice daily).

The Cebu-Zamboanga and Davao-Zamboanga routes will also be upgraded from an ATR72-500 to an Airbus A319, increasing capacity for its daily flights.

The carrier currently flies to 33 domestic destinations and 14 cities across Asia Pacific Region.

NAIA posts banner year in 2009 with 24 M passengers

Makes Manila as 51th Biggest airport in the world

From a passenger capacity of 4.5 million in 1981, the Ninoy Aquino International Airport (NAIA) complex has now become one of the busiest airport in the World transporting 24.5 million passengers making it on the 51th spot, up five notches based on the latest figures released by Airport Council International (ACI).

Despite worldwide economic recession plaguing the airline industry, the growth of passenger traffic at Manila airport has been phenomenal growing 11.5 percent this year as compared to worldwide passenger growth of +0.1%, and +1.2% for Asia Pacific region.

Official figures from ACI disclosed that in 2006 the airport handled only 17.7 million passengers making it the 72nd busiest airport in the world. Passenger volume went up further to 20.4 million passengers in 2007, and 22.1 million in 2008 landing it on the 56th spot.

The airport complex, consisting of 4 terminals, boast a combined capacity of 35 million passengers per year. Aside from its 5 resident domestic airlines, it is serviced by 30 international airlines handling around 200,000 flights and more than 24 million passengers in the year 2009. Further, there are additional seven foreign carriers expected to operate at Manila's premiere airport this year. and continues to be the main international gateway of the country, as it has been for the past decades.

Despite the emergence of new airports with international flight capabilities in the last two years, the NAIA complex handled about 90% of all international traffic in the country. Including domestic passenger movement, NAIA accounted for about 75% total passenger traffic.

Contributing to capacity building was the commercial start-up of Terminal 3 in July 22, 2008, with a soft opening that initially involved domestic flights from Cebu Pacific, followed by other domestic flights from PAL Express and Air Philippines.

Currently, the NAIA Terminal 3 is handling about half or about 7.5 million passengers of its designed capacity of 13 million passengers yearly.

Manila International Airport Authority (MIAA) General Manager Alfonso Cusi also cited the successful certification of the main international terminal, NAIA T1 to the global 9001:2008 ISO Standards of Quality Management Service as well as the continuing strength, secure and safe conduct of its airport operations through the terminal management concept.

Fast Facts:
* Total worldwide passenger growth of +0.1%
Fastest growing region was the Middle East at 5.8% followed by Africa (+4.9%) and Latin America Caribbean (+2.1%)
Asia Pacific and Europe grew by 1.2%
North America only region with decrease in traffic (-3.1%)
* Total aircraft movements handled by airports was 77 million, a decrease of 2.1%
* Total cargo handled decreased by 3.7% to 86 million tonnes
* 51% of airports worldwide registered positive passenger growth in 2008, together these airports represent 49% of total passenger traffic
* 520 airports with more than 5 million passengers experienced a decrease in passengers compared to only 21 airports in 2007.

PAL drops three non-core units

To pay $46 million maturing debts

April 19, 2010

Lean and Mean

Philippine Airlines (PAL) has announced Saturday that it will spin-off three non-core units effective June 1, 2010 to generate fresh cash as it reorganizes into a leaner, more efficient company.

PAL CCO Richard Miller, Standing second from left.
The affected units are in-flight catering services, airport services ( which include ground handling, cargo terminal/handling, and ramp handling), and call center reservations. All affected regular positions will be deemed abolished from PAL’s table of organization effective at the close of business hours on May 31.

“Given this grim scenario, PAL has no choice but to restructure. It must also sell and/or cease operations of non-core businesses since no airline in Asia, or the world for that matter, continue to operate non-core businesses” says PAL chief commercial group adviser Richard Miller in a press briefing.

The selling price was not however disclosed but the airline said it will be used to pay maturing debts.

The airline justified its restructuring plan due to adverse operating factors beyond its control which in fact plagued the airline industry worldwide. Among the problems raised by PAL includes liberalization of the commercial aviation industry, worldwide economic recession slowing passenger traffic movements which also was preceded by record-high oil prices in 2008-2009 period.

Debt Payments

The cost-cutting measures are designed for the survival of the national carrier which failed to generate new capital investments from new and existing stockholders particularly from the Tan Group which refused to raised fresh capital. The government is also not inclined to bail out the airline considering its current financial state.

“PAL has to meet its huge outstanding obligations as they fall due to prevent creditors from taking over the business,” Miller stressed.

PAL reported $350 million in losses during the last two fiscal years. Its remaining equity has also dropped to over $1.1 million as of February 2010 making investments in the airline almost worthless to generate confidence from new investors.

PAL already trimmed its net loss to $40.2 million in the first nine months of its fiscal year ending March 2010 from $330.2 million recorded the same period a year earlier. The company expects to break-even this year.

“PAL did its best to adjust to the harsh operating environment. It implemented a series of cost-cutting initiatives, including a manpower rationalization program in September 2009 that affected more than 400 executives and administrative employees.” Miller said.

In 2000, PAL sold its Maintenance and Engineering Department to Lufthansa Technik Philippines (LTP) as part of the company's rehabilitation plan.

Flat International Growth

PAL expects the growth projection this year to be almost flat, with total passengers carried expected to reach nine million by the end of its fiscal year on March 31, or almost the same as the 8.96 million passengers flow in the last fiscal year, mainly fueled by the domestic market which only account almost 25% of its gross revenue.

In 2009, the airline carried 8.96 million passengers, up 17.1 percent higher than what it carried in 2008. Currently,it flew 7.5 million passengers ending December 31, 37 percent of which are international passengers while the rest are domestic traffic.

Richard Miller said that from April 2009 to January 2010, the number of international passengers flown dropped six percent while those of domestic passengers grew 18 percent.

While international passengers account for only 37 percent of total passengers carried, PAL’s international business contributes 75 percent to total revenues.

Miller said that PAL will focus its expansion in Asia as it adds new regional routes to India and more China destinations.

3,000 jobs to be delisted from PAL's payroll

Some 3,000 workers are set to lose their jobs by end-May when the country’s flag carrier implements its spinoff-outsourcing plans, President Jaime Bautista’s letter to the union said.

The next phase of the restructuring program will affect PAL’s medical, information technology unit, and some human resource and administrative positions, added Bautista. But details of the next phase of the restrucurting program have yet to be finalized.

Palea president Gerardo Rivera said on Sunday that they were slightly caught by surprise with the content of Bautista’s April 16, 2010, letter “since he didn’t raise this during our meeting with him on April 8.”

He said Bautista even assured the Palea leaders that the ills of PAL—a $46.5-million obligation maturing by June 2010, among others—wouldn’t affect the manpower.

“Sure, there were what I call pocket outsourcing, with some jobs being outsourced, but not at this scale and imminence.”

In his letter, Bautista said the company has “implemented a manpower rationalization program affecting more than 400 executives and administrative employees” since September last year.

Rivera said the union “will not take this issue sitting down as the welfare of the families of those affected are at stake.”

He added that beginning Monday, the union would try to sit down with the management to find alternative options to this decision as they will try to exhaust legal means to respond to this issue.

He said only a thousand of the estimated total 4,000 PAL employees will not be affected by the layoff if it pushes through, mostly comprising the pilots and flight crews.

Manila Lands on 36th spot as Worlds Largest

Top 100 Airports by Seat Capacity Available on International Departing Flights for w/c 12/04/10
Ranking Departure Departure Airport Name Total Number

Airport Code
of Seats
1 LHR LONDON HEATHROW APT 807,923
2 CDG PARIS CHARLES DE GAULLE APT 658,509
3 FRA FRANKFURT INTERNATIONAL APT 613,714
4 HKG HONG KONG INTERNATIONAL APT 598,276
5 DXB DUBAI INTERNATIONAL 590,414
6 SIN SINGAPORE CHANGI APT 540,086
7 AMS AMSTERDAM 511,997
8 BKK BANGKOK SUVARNABHUMI INTERNATIONAL APT 453,766
9 ICN SEOUL INCHEON INTERNATIONAL AIRPORT 394,804
10 MAD MADRID BARAJAS APT 387,854
11 NRT TOKYO NARITA APT 383,618
12 MUC MUNICH INTERNATIONAL AIRPORT 340,665
13 TPE TAIPEI TAIWAN TAOYUAN INTERNATIONAL APT 310,305
14 FCO ROME FIUMICINO APT 298,446
15 LGW LONDON GATWICK APT 297,539
16 KUL KUALA LUMPUR INTERNATIONAL AIRPORT 294,441
17 JFK NEW YORK J F KENNEDY INTERNATIONAL APT 289,287
18 ZRH ZURICH AIRPORT 285,113
19 VIE VIENNA 268,386
20 IST ISTANBUL ATATURK AIRPORT 260,523
21 CPH COPENHAGEN KASTRUP APT 249,570
22 PVG SHANGHAI PUDONG INTERNATIONAL APT 241,768
23 DUB DUBLIN 230,962
24 DOH DOHA 230,440
25 YYZ TORONTO LESTER B PEARSON INTL APT 221,721
26 MIA MIAMI INTERNATIONAL APT 221,199
27 BRU BRUSSELS AIRPORT 220,976
28 BCN BARCELONA APT 214,601
29 STN LONDON STANSTED APT 208,762
30 ORY PARIS ORLY APT 197,279
31 MXP MILAN MALPENSA APT 196,706
32 PEK BEIJING CAPITAL APT 194,543
33 LAX LOS ANGELES INTERNATIONAL APT 190,813
34 DUS DUESSELDORF INTERNATIONAL AIRPORT 179,605
35 CAI CAIRO 158,345
36 MNL MANILA NINOY AQUINO INTERNATIONAL APT 154,986
37 ARN STOCKHOLM ARLANDA APT 153,411
38 GVA GENEVA 152,947
39 AUH ABU DHABI INTERNATIONAL APT 151,827
40 SYD SYDNEY KINGSFORD SMITH APT 149,958
41 LIS LISBON 148,498
42 EWR NEWARK LIBERTY INTERNATIONAL APT 148,202
43 BAH BAHRAIN 144,549
44 PRG PRAGUE 141,405
45 ORD CHICAGO O'HARE INTERNATIONAL APT 138,999
46 HEL HELSINKI 135,594
47 ATH ATHENS 134,282
48 MAN MANCHESTER INTERNATIONAL APT 132,497
49 SVO MOSCOW SHEREMETYEVO INTERNATIONAL APT 132,345
50 PMI PALMA DE MALLORCA 131,404
51 CGK JAKARTA SOEKARNO-HATTA APT 129,848
52 KIX OSAKA KANSAI INTERNATIONAL AIRPORT 129,364
53 OSL OSLO GARDERMOEN AIRPORT 128,593
54 KWI KUWAIT 128,356
55 JNB JOHANNESBURG O.R. TAMBO INTERNATIONAL 127,750
56 TLV TEL AVIV BEN GURION INTERNATIONAL APT 125,646
57 JED JEDDAH 123,940
58 ATL ATLANTA HARTSFIELD-JACKSON INTL APT 122,057
59 DEL DELHI 121,480
60 DME MOSCOW DOMODEDOVO APT 121,454
61 GRU SAO PAULO GUARULHOS INTL APT 121,392
62 BOM MUMBAI 119,687
63 AGP MALAGA 115,473
64 BUD BUDAPEST 111,116
65 SJU SAN JUAN LUIS MUNOZ MARIN INTL APT 106,126
66 MEX MEXICO CITY JUAREZ INTERNATIONAL APT 104,182
67 IAH HOUSTON GEORGE BUSH INTERCONTINENTAL AP 103,465
68 SFO SAN FRANCISCO INTERNATIONAL APT 101,880
69 TXL BERLIN TEGEL APT 98,196
70 RUH RIYADH 97,524
71 CUN CANCUN 97,501
72 LTN LONDON LUTON APT 96,628
73 EZE BUENOS AIRES MINISTRO PISTARINI 96,585
74 SGN HO CHI MINH CITY 95,499
75 WAW WARSAW 93,845
76 ALC ALICANTE 92,846
77 YVR VANCOUVER INTERNATIONAL APT 90,164
78 HAM HAMBURG AIRPORT 89,767
79 IAD WASHINGTON DULLES INTERNATIONAL APT 89,118
80 AKL AUCKLAND INTERNATIONAL APT 88,379
81 PTY PANAMA CITY TOCUMEN INTERNATIONAL 86,144
82 NCE NICE 85,859
83 BHX BIRMINGHAM INTERNATIONAL AIRPORT 85,643
84 MCT MUSCAT 83,694
85 CGN COLOGNE/BONN APT 83,502
86 BEY BEIRUT 79,686
87 CMN CASABLANCA MOHAMMED V APT 79,299
88 YUL MONTREAL PIERRE ELLIOTT TRUDEAU INT APT 78,163
89 CAN GUANGZHOU 77,219
90 AMM AMMAN QUEEN ALIA INTERNATIONAL APT 77,183
91 STR STUTTGART AIRPORT 75,753
92 LIM LIMA 72,966
93 MEL MELBOURNE AIRPORT 72,235
94 SXF BERLIN SCHOENEFELD APT 69,637
95 SHJ SHARJAH 69,326
96 DFW DALLAS/FORT WORTH INTL APT 68,233
97 RIX RIGA 68,151
98 CRL BRUSSELS S. CHARLEROI AIRPORT 67,418
99 DPS DENPASAR BALI 66,665
100 CMB COLOMBO BANDARANAIKE APT 66,465
Source:OAG MAX Online

SMC Buys majority share at CIADC

April 13, 2010

Manila - San Miguel Corporation(SMC), through wholly-owned subsidiary San Miguel Holdings Corp. (SMHC), has entered into an agreement with Caticlan International Airport Development Corp. (CIADC) to acquire a majority interest in the company that was awarded concession agreement by Department of Transportation and Communications (DOTC) to expand, operate and maintain Caticlan airport, the gateway to the island-resort of Boracay.

CIADC consortium of George Yang, Rafael Puno, Lino Barte and RPRP Ventures Management and Development Corporation has executed a share sale purchase agreement to SMHC for a controlling share of the company.

The P2.507-billion build-operate-transfer (BOT) project was awarded to CIADC on June 22, 2009 by virtue of concession agreement which involves three construction phases covering a total of seven years.

The project includes the extension of the runway from 950 meters by 30 meters to international standards of 2,100 meters by 45 meters so that it can accommodate narrow-bodied jets by 2015.

CAAP Consultants Fired!

Days of the Generals over

April 11, 2010

Manila- Civil Aviation Authority (CAAP) Director General Alfonso Cusi ordered the termination of service of all 170 consultants, mostly ex-military men, appointed by his predecessor General Rubin F. Ciron, for failing to provide service expected of them.

Cusi said that not much has been done by the consultants to improved the aviation sector after the Air Transportation Office was made a corporate entity almost two years ago.

"I just can't understand why they failed to upgrade or trained technical personnel despite opportunity to do so. Two years is a long time and not much has been done." says Cusi.

Cusi, who assumed the post last month said that he is currently attending the salary structure for the qualified employees particularly those air traffic controllers, airways navigation specialists and communication specialists. There are currently 360 air controllers across the country with some 700 navigation specialists and 600 aircraft communicators.

He recently appointed 47 new recruits for check pilots, airworthiness inspectors, cabin crew inspectors and other technical positions. He is also appointing new job titles to some “organic” personnel that qualified for the new post.

His next task is to work with the much harder regulatory framework as it designs method for effective implementation, like checking maintenance procedures duly approved and warranted by aircraft manufacturers, to make sure that they are strictly followed by aircraft operators across the country.

“CAAP will audit maintenance procedures not only of the big airline firms but also the small ones like those operating in the general aviation market, to make sure that rules are strictly being followed” says Cusi.

The General aviation market comprises the big chunk of CAAP's surveillance comprising 80% of the Philippine aviation market. Operators usually utilized light aircraft and small engined planes for air charter, and air taxi operation, while others operate it in different flying schools across the country.

Shanghai Airlines Connects Cebu

Starts Chartered flight to Mactan

By Wilfredo Rodolfo III
Wednesday, 07 April 2010

Mactan - SHANGHAI Airlines launches its maiden direct chartered flights to Shanghai from Cebu today, a twice-weekly shuttle that is expected to bring in an estimated 9,000 additional Chinese tourists to Central Philippines every year.

Secretary of Tourism Joseph “Ace” Durano said the charter group will also go out to other popular destinations in Cebu and in Bohol with main itineraries comprises of nature-based holidays, water sport adventures, as well as heritage and cultural tours.

“China continues to be the country’s key source market for inbound tourists. This new development assures us that the Department’s our initial talks with Shanghai-based travel operators a few years back is continuing to bear fruit,” Durano said.

“We anticipate a more vibrant tourism market growth in this region, with Chinese businessmen also looking at investment opportunities as well,” he added.

Shanghai Airlines will be deploying its 160-seater Boeing 737 for the Cebu flights.

Chinese tourists have grown exponentially since the Department of Tourism adopted the policy to prioritize Asian countries for tourism. In 2004, there were only some 32,000 Chinese tourists in the Philippines. In 2009, the tally reached 200,000.

In Central Visayas Chinese arrivals more than doubled for the first 11 months in 2009 compared with the same period in 2008. As of November 2009, mainland China is the fourth-biggest market within the region, with visitors reaching more than 56,000, while those from Hong Kong is near the 30,000-mark.

Cebu already has direct shuttle flights to Guangzhou in mainland China.

Tourism undersecretary Eduardo Jarque Jr. said the increased capacity is now possible with the expansion of the Mactan Cebu International Airport.

“Sustained partnerships with travel wholesalers in Shanghai have been integral in keeping consumer awareness. We see that our goal to attract more tourists from Shanghai visiting our country for the summer break and autumn holidays is now becoming a reality,” he said.

Meanwhile, Gerry Panga, tourism attaché in Shanghai, said the Jinyu Air group, which has been operating in Cebu for three consecutive years, is also looking at reactivating its charters with China Southern Airlines, tentatively on April 30.

The truth about blacklisting

April 7, 2010

We usually don't make a comment on the aviation news posted on our site. We also don't know if its just us that is being stupid or the government is trying to wrestle a justification to make a fool of themselves.

The latest folly apparently is the MA-60 Certification. Accordingly, The ICAO has told CAAP that it would recognize aircraft operating in the Philippines only if their flights were certified by the United States, Canada or the European Union.

Whoever said those statements has no clue what they were talking about. It's a shame they actually works for the aviation industry. The person who made that justification doesn't even know that such remarks, if its even written, is a clear case of unfair economic discrimination that warrant justification for resignation of the ICAO Official concerned. Perhaps none of them knew that.

And if we follow that argument further, then it would be safe to conclude that if it were the case, ICAO should also issue similar pronouncement to China where the plane is manufactured because currently they are growing by the numbers, and if we are not wrong majority of them were used and operated in that country.

And what about aircraft manufacturers from Russia, the CIS and Brazil? Did ICAO made similar conditions that tied their safety rating to the planes they make and fly? Apparently not because ICAO is not that foolish as our aviation agency would like us to believe. Because FAA and JAA (now EASA) certification are just mode of safety checks for the aircraft to be sold and flown on their respective territories as airworthy. Nothing more nothing less.

If the Philippines were up to the tasks required of them by ICAO, they would also make such safety assessments like what Russia and China did to its aircraft. Our country did not because the officials it hired doesn't know anything about civil aviation.

Maybe our friends at CAAP forget the basic ICAO rule of mutual recognition of aircraft certification and regulatory oversight. Or maybe they doesn't know that they exists at all.

So Does it mean that our friends at CAAP were sleeping on their job that they just doesn't know that such stipulation exists in the Montreal convention?

We are not about to accept such justification as an excuse. What is really happening is complete failure of regulatory oversight. Its what the FAA, the ICAO and EASA has said. Its not about accidents or pilot errors or maybe UFO. Its about doing a job.

At last, Alfonso Cusi found the solution fast his predecessor can't even figure in a years time, and yet they were professional strategists. Sadly, their incompetence fell on his lap and his actions were just too late.

What is with the China plane issue?


CAAP torn by Western Politics

07 April 2010

AS expected, the blame game has been going on among aviation officials over the blacklist imposed by the European Commission on all Philippine carriers, a blow that came just as officials from Manila were trying to restore the Category 1 status for Philippine aviation imposed by US authorities.

The twin blows—from the US and Europe—are, needless to stress, impinging on the efforts of our airlines to recover from the crisis and ride as well on the economic rebound that now allows more people and businesses to resume travel plans. Among those seriously affected is flag-carrier Philippine Airlines (PAL), which recently took delivery of more units—with others in the pipeline—from Boeing, alongside its own fleet from the European plane-maker Airbus.

Despite having hurdled every major international audit on air safety, Philippine Airlines is in the unenviable position of having new, good planes, yet restricted in certain routes. Actually, the entire aviation sector was stunned by the European Union (EU) ban, because it has practically complied with all the requirements imposed by the Universal Safety Oversight Audit Program (Usoap) of the International Civil Aviation Organization (Icao).

Usoap conducted its Civil Aviation Authority of the Philippines (CAAP) audit for 10 days in October 2009.

Fortunately for PAL, the US still allows its planes to fly to its lucrative, busy routes, especially in the West Coast, but the risk hangs over its head until the country gets back its Category 2 status. As for the EU ban, tourism and aviation officials worry that while no local airline is flying to Europe, the ban, if not lifted, will hinder the potential for flying those routes, not to mention the risk that certain EU countries may discourage their nationals from using Philippine carriers when they come to this part of the world.

The blame game now discreetly being played in aviation circles is, therefore, worth watching. To its credit, the new CAAP leadership under Alfonso Cusi has acted with dispatch on the country’s category-downgrade issues, particularly the aspect of manpower lack. He has fast-tracked the hiring and redeployment of skilled, trained people to areas where global standards require them to be, albeit the process is a difficult one, given the fiscal constraints.

Yet the other part of the downgrade and the ban deserves scrutiny as well, if the special report by this paper’s veteran aviation reporter, Recto Mercene, is any indication. It seems that in that transition from the now-defunct Air Transportation Office to the CAAP, which was legally mandated by Republic Act 9497, some pebbles fell through the “cracks,” so to speak, allowing the grant of authority to one local airline to use the controversial, Chinese-made MA60 turbo-prop airplanes.

The Icao, meanwhile, has told the CAAP that it would recognize aircraft operating in the Philippines only if their flights were certified by the United States, Canada or the European Union.

In what is seen as a move to eventually phase out the MA60, Director General Cusi recently ordered that all airline companies not been certified by the aviation body in compliance with the Civil Air Regulations would no longer be allowed to fly starting December 2010.

But some aviation experts insist that the Icao “will never certify MA60” in the first place, which puts the entire aviation industry hostage to the “issues” bedeviling one carrier.

It will be recalled that last year, Zest Air, which uses three MA60s, figured in three air mishaps at Caticlan Airport involving such aircraft.

Do we have here a case, therefore, of one player affecting the business of other players that have taken greater trouble to meet global safety standards? If the discreet blame game in the aviation hierarchy is any indication, that may be so. Let’s hope we all see our way out of this.

The absurd MA-60 Excuse

MA60 factor in aviation ban?

Written by Recto Mercene
07 April 2010

THE European Commission’s (EC) move to impose an operating ban on all air carriers registered in the Philippines has sparked much soul-searching among local aviation officials, not to mention a discreet blame game on what caused the ban.

The unprecedented move had caught officials of the Civil Aviation Authority of the Philippines (CAAP) by surprise, because the country has practically complied with all the requirements imposed by the Universal Safety Oversight Audit Program (Usoap) of the International Civil Aviation Organization (Icao). Usoap conducted its CAAP audit for 10 days in October 2009.

Overlooked

It has given the CAAP six months to comply with their negative findings.

What has apparently been overlooked, according to sources, was the CAAP’s having allowed Zest Air, a local company, to operate three MA60 turbo-prop airplanes.

These “regional” airplanes are made by the Xian Aircraft Co. of China Aviation Industry Corp.

The ICAO has told the CAAP that it would recognize aircraft operating in the Philippines only if their flights were certified by the United States, Canada or the European Union.

How the MA60 was certified has been a source of finger-pointing within the CAAP.

The latter had accused officials of the now defunct Air Transportation Office of registering the MA60 while the aviation body was in transition—at the time the passage of Republic Act 9497 was being hammered out to eventually create the CAAP.

In an apparent move to eventually phase out the MA60, Director General Alfonso Cusi has recently ordered that all airline companies which had not been certified by the aviation body in compliance with the Civil Air Regulations (CAR) would no longer be allowed to fly starting December 2010.

“Republic Act 9497 creating the CAAP had ruled that all airlines must comply with the CAR,” he said.

Hurdles

Among the hurdles that these air carriers must overcome in order to continue flying are: possession of an airworthiness certification; qualification of all of pilots; and the proper facilities such as repair shops, training programs and servicing facilities.

Sources said Zest Air has yet to show the CAAP that it meets all the requirements under the CAR—the country’s aviation industry’s bible—before it could hope to continue operating locally.

It will be recalled that last year, Zest Air figured in three air mishaps at Caticlan Airport involving MA60 airplanes.

Perhaps, according to aviation sources, the December 2010 deadline for minor aircraft operators using aircraft that did not pass those countries that the ICAO officially recognized is too far a deadline, meaning, it would not compel immediate compliance.

The same airport sources said that the Philippines might be able to regain its Category 1 status if the CAAP would put its foot down and immediately stop allowing the MA60 to fly the Philippine skies.

“In the first place, the Icao representatives will never certify the MA60,” one airport source said, adding that the China-made airplanes have yet to establish a consistent record of safety and reliability.

Two dominant players

The EU’s blacklisting of the Philippines came at a time when the world is witnessing the battle for air supremacy by two dominant players in the aircraft manufacturing industry—Boeing and Airbus.

Boeing is the US’s premier aircraft manufacturer, one of only a few key industries that the Americans could truly be said to have a grip on. This grip is slowly being loosened by Airbus, the only key rival in Europe.

It is, thus, not a coincidence that the American-based Federal Aviation Administration (FAA) was the first to downgrade the CAAP to Category 2 status, while the EU followed with its own blacklist of the Philippines.

It is curious to note that even if blacklisted in the EU, no Philippine air carrier actually flies to Europe at the moment. Still, Philippine officials said the ban could impact on Manila’s tourism prospects.

At the same time, the EU has not discouraged its citizens from coming over either as tourists or businessmen, and using local aircraft to take them from one place to another.

Daunting task

As this developed, Cusi has ordered the immediate hiring of 47 qualified technical personnel for the Flight Standards Inspectorate Service—the one other hurdle for international certification.

He said that the standardization of the new corporation is meant to ensure that the aviation body would be on a par with international safety standards.

“The task is daunting but I am confident we will surpass the challenges that the CAAP is now facing,” Cusi stressed.

PAL’s assurance

The only airline registered and flew in and out of EU was flag carrier Philippine Airlines (PAL), but it hasn’t flown to the continent since 1999.

Despite the unfortunate inclusion of PAL and all other local carriers in the European Commission’s blacklist—a direct consequence of the downgrade of the Philippine government’s aviation safety rating—PAL has assured the riding public that safety remains the bedrock of its operations. It has always been the flag carrier’s policy to ensure that its passengers fly with the full assurance of safety and comfort.

PAL lamented that the EC decision came about notwithstanding PAL’s safety record, as borne out by its compliance with internationally accepted safety standards, including the IATA Operational Safety Audit (IOSA) and audits by major foreign aviation regulatory authorities. For four consecutive years since 2006, PAL has been the only IOSA-certified Philippine carrier.

PAL welcomes EC visit

Two recent events led to the inclusion of Philippine carriers in the EC ban, namely: 1) the US FAA’s decision in January 2008 to downgrade the Philippines’ safety rating to Category 2; and 2) the “significant safety concern” alert issued by the ICAO in November 2009 against Philippine aviation safety regulators.

Despite the Philippines’ Category 2 rating, it must be noted that the US FAA continues to allow PAL to operate up to 33 regular weekly flights from the Philippines to Los Angeles, San Francisco, Honolulu, Las Vegas and Guam. PAL said it safely flies thousands of passengers, including US citizens, across the Pacific Ocean on a regular and reliable basis in compliance with stringent US safety regulations.

PAL welcomed the EC air safety committee’s decision to visit the Philippines so that, besides Philippine aviation regulators, it can also inspect and audit local carriers.

The airline said it is prepared for such audit and is confident that EC inspectors will find PAL as a world-class carrier of uncompromising professionalism and efficiency.

PAL is also ready to lend a hand to the CAAP, especially to its new director general, Cusi, as the agency strives to professionalize its ranks and regain its international safety rating.

Since 2006, PAL has been complying with the IOSA program, which is ISO 9001:2000 certified. It is a rigorous audit focusing on the entire operational management and control systems of an airline in promoting safety, based on internationally recognized standards and supported by a strict quality assurance process.

These IOSA standards are derived from relevant Icao guidelines, in particular, Annexes 1, 6 and 8, as well as from the regulations of the US FAA and the Joint Aviation Authorities of Europe, as well as industry best practices.

Moreover, regular maintenance of the PAL fleet is undertaken by Lufthansa Technik Philippines, a subsidiary of Lufthansa Technik AG of Germany, the world’s leading provider of maintenance, repair and overhaul services for commercial aircraft, engines and components.

Airphil’s guarantee

Low-cost carrier Airphil Express continued to assure its passengers and the riding public that flying by air is still one of the safest modes of transportation in the Philippines.

Airphil Express issued the statement amid the recent decision by the EC to ban all Philippine carriers from flying to the European Union.

“While no Philippine carrier currently flies to any point in Europe, we wish to assure the riding public that our planes are well-maintained and adhere to a strict maintenance policy that puts a premium on passenger comfort and safety,” said Airphil Express president David Lim.