PAL Resumes Normal operations Nov. 24

October 31, 2011

Philippine Airlines announced Saturday that it expects to resume full domestic and international operations starting November 24, 2011 for its winter schedule following the streamlining and spinoff of three of its non-core businesses.

Domestic and International flight operations should all be operating at Terminal 2 from that time as third party service providers build up and complete manpower requirements for airport services, the airline said in a statement.
But the airline is studying whether to recall some of its domestic flights to terminal 2 from the current Terminal 3 considering that the airline has grown capacity operating from  the current terminal.

“Terminal 2 is already too small for us,” PAL president and chief operating officer Jaime J. Bautista said in a recent interview. 

Terminal 2 was completed in 1998 and opened for operations a year later. 

Bautista said that despite being the only airline in the building, which is an advantage PAL has over most carriers in the country that have to share terminals with others, Terminal 2 has become too small for the flag carrier’s needs.

Terminal 2 is split into two wings: one for PAL’s international operations and the other for domestic flights.

“The problem with Terminal 2 is our growing international passenger traffic, the airline had been forced to use some of terminal’s domestic space for international operations, especially during peak hours,” says Bautista.

The government earlier tried to convince PAL to move its international operations to Terminal 3 but the airline refused, saying it would not split its operations between two terminals. But after the spin-off a rethinking has to be made to decongest Terminal 2 for more international passengers.

Bautista said they are expecting to receive two more Boeing 777 planes next year for its international and domestic operations and they feel that there is already a need to transfer some of its narrow bodies to Terminal 3 so that they can eventually make Terminal 2 an international Terminal for PAL.

Currently, those that are operating at Terminal 2 include flights to the following domestic destinations:
    - Butuan
    - Cagayan de Oro
    - Cebu
    - Davao
    - General Santos
    - Iloilo
    - Kalibo
    - Legazpi
    - Laoag
    - Puerto Princesa
    - Tagbilaran
    - Roxas
Those at Terminal 3 include:
    - Bacolod
    - Cotabato
    - Dipolog
    - Dumaguete
    - Ozamiz
    - Tacloban
    - Zamboanga
PAL said the Terminal assignments for the following destinations are not yet final.

Everyone Flies

As Philippines reaches 80% penetration on Aviation Travel

October 28, 2011

Airphil Express and Cebu Pacific flights to Tawi-Tawi
The low-cost carrier penetration rate in the fast-growing domestic Philippine market is about to reach 80%, a remarkable achievement and a figure unprecedented in the global aviation industry. An LCC penetration rate of 85% is even plausible in the foreseeable future as Philippine LCCs, led by Cebu Pacific and AirPhil Express, are rapidly expanding domestically while flag carrier Philippine Airlines (PAL) continues to reduce domestic capacity.

LCC competition in the Philippine international market is expected to increase significantly, driven primarily by the launch of AirAsia Philippines, which was originally planned for this month but has encountered last second delays. Domestic competition, however, is not likely to increase as AirAsia Philippines and the proposed Tiger Airways-SEAir joint venture face uphill battles in their attempt to secure authorisations for domestic operations. While international routes linking the Philippines with other Asian countries could see intense competition from five or more LCCs, the domestic market will likely be served by two or at most three LCCs in future.
Cebu Pacific and AirPhil are confident they will emerge as the big domestic winners, with AirPhil targeting a 30% to 35% share of the domestic market. Cebu Pacific is positioned to remain the market leader with roughly a 50% share while full-service carrier PAL is likely to see its share erode to about 15%.

LCC domestic penetration rates reached 68% in 2010 and 75% in 2Q2011

LCC penetration rates in the Philippines have been rising steadily over the last several years driven by rapid expansion at Cebu Pacific. LCC penetration rates particularly surged last year, reaching 68% compared to only 59% in 2009, primarily because of growth at two new LCCs: AirPhil and Zest Air. AirPhil, formerly known as Air Philippines, has pursued rapid domestic expansion since rebranding and adopting the LCC model in Mar-2010. Zest, previously known as Asian Spirit, initially adopted the LCC model in 2008 and started to pursue more aggressive expansion in 2010.

Philippine CAB data shows the three LCCs combined account for 75% of total passenger traffic in 2Q2011, compared to only 66% in 2Q2010. Scheduled capacity data for the current week shows LCCs have a 77% share of the domestic market in the Philippines, with Cebu capturing 44.4%, AirPhil 20.3% and Zest 12.4%.

Philippines scheduled domestic capacity by carrier (seats per week): 24-Oct-2011 to 30-Oct-2011

Annual LCC penetration rate in the Philippine domestic market: 2003 to 2010

Cebu Pacific and AirPhil executives expect LCCs to soon start capturing nearly 80% of the Philippine domestic market.

Cebu Pacific and AirPhil executives expect LCCs to soon start capturing nearly 80% of the Philippine domestic market. Cebu Pacific and AirPhil are both adding significant domestic capacity in 4Q2011, as they take delivery of several additional A320s. PAL, meanwhile, has further reduced its domestic capacity. Over the last two years PAL has been steadily reducing its A320 fleet, returning aircraft as leases expire and leasing two A320s to AirPhil.

PAL and AirPhil have common owners and a close partnership which includes codesharing on domestic routes. CAPA has been informed that PAL is now only operating 90 daily domestic flights, down from 145 daily flights previously. The latest capacity reductions were initially implemented during a ground crew strike at PAL late last month but are now believed to be permanent. AirPhil handled PAL passengers that were inconvenienced during the strike and continues to work closely with the flag carrier as PAL focuses more on the international market, where there is higher demand for a premium service.

AirPhil to expand A320 fleet to 15 aircraft by end of 2012

AirPhil currently operates eight A320s and eight Dash 8 turboprops. The carrier is planning to nearly double its A320 fleet over the next year, with almost all the additional capacity to be deployed domestically. AirPhil SVP marketing and sales Alfredo Herrera tells CAPA that the carrier’s ninth A320 will enter service next month followed by the 10th in December and two more in Jan-2012. Three more deliveries are planned for later next year, resulting in a fleet of 15 A320s by the end of 2012.

...“We are still a domestic player first and foremost. International is gravy,”...
Of the four A320s to be delivered to AirPhil over the next three months, Mr Herrera says three will be deployed domestically while one aircraft will be used for international charters. AirPhil is now primarily a domestic operator with only two daily scheduled international flights: Manila-Singapore and Cebu-Hong Kong. It also has regular charters to several destinations in mainland China. “We are still a domestic player first and foremost. International is gravy,” Mr Herrera tells CAPA.

By focussing on the domestic market with its first 15 A320s, Mr Herrera expects AirPhil can be a “strong number two” behind Cebu Pacific, capturing 30% to 35% of the domestic market. The carrier’s A320s are being used to build up market share on trunk routes while its eight Dash 8s are used for some of the several domestic destinations in the Philippines that have runways that are too short for jets. AirPhil has five 70-seat Dash 8-400s and three 50-seat Dash 8-300s with the -300s used exclusively to operate a high frequency service from Manila to Caticlan, the gateway to popular tourist destination Boracay Island that is also served by Cebu with ATR 72s.

AirPhil aims to eventually pursue some international expansion, which would allow it to increase the utilisation of its A320s. But for now AirPhil plans to only expand its international operations via charters, partially because traffic rights on prime routes such as Manila-Seoul are not currently available.
...the international routes are key in helping Cebu keep its costs lower than its competitors...
Cebu Pacific has a much larger international operation, accounting for 21% of its total capacity. While some of Cebu’s international flying is currently not as profitable as its domestic operation, the international routes are key in helping Cebu keep its costs lower than its competitors, including AirPhil, as several of the international flights are operated during overnight hours.

Cebu Pacific to add three A320s in 4Q2011

Cebu Pacific is also adding three A320s in 4Q2011, with most of the additional capacity being used to increase frequency on domestic routes. The first of these aircraft was placed into service last week and used to operate additional flights to three domestic destinations. One more A320 is slated for delivery by the end of this month, with the last one expected in December, giving Cebu Pacific a year-end fleet of 29 A320 family aircraft and eight ATR 72s.

Cebu Pacific’s current fleet plan includes four additional A320s in 2012, followed by seven more in 2013. As a result, it expects a fleet of 40 A320 family aircraft and eight ATR-72s by the end of 2013.
Cebu Pacific has seen its domestic traffic increase by 10% through the first three quarters of 2010 to 6.7 million passengers. The carrier also transported 2 million international passengers through the first nine months of 2011, a 25% increase compared with last year. Last year Cebu Pacific transported over 8 million domestic passengers, accounting for 52% of the 16.6 million total passengers in the Philippine domestic market.

Cebu Pacific’s portion of total annual domestic passenger traffic in the Philippines: 2003 to 2010

...the main priority is to defend its market leading position domestically...
Cebu Pacific is primarily focussed on defending its fortress position domestically, aiming to exploit its first mover advantage in the local Philippine LCC market and grow at least as fast as its competitors. Unlike pan-Asian LCC groups such as AirAsia and Jetstar, Cebu Pacific does not have an ambition to become a major international player. The carrier plans to continue growing its international network, as it helps diversify its revenue stream and keep its A320 utilisation levels at about 14 hours per day, but the main priority is to defend its market leading position domestically.

Cebu Pacific sticks with pure LCC model while hybrid model appeals to AirPhil

...“Everyone who gets mixed up will lose money.”...
Cebu Pacific also plans to stick with a pure LCC model and will not be tempted by elements of hybrid models, such as codeshares, GDSs and corporate bookings. Cebu Pacific chief executive advisor Garry Kingshott told an IATA conference in Singapore earlier this month that airlines pursuing “blurry models” typically have lower profit margins than pure LCCs or FSCs.

“In this industry you are either a low-cost producer or a high differentiator,” Mr Kingshott said. “Everyone who gets mixed up will lose money.”

Cebu Pacific uses travel agents locally in the Philippines as credit card usage remains relatively low in the country but connects with them via the web. Mr Kingshott is adamant Cebu Pacific will not turn to the GDSs. “We have far more success today in using Twitter and Facebook as booking channels,” he said. “We’re in a very complex business. Everything you touch seems to complex up for whatever reason.”
Cebu Pacific’s insistence on remaining pure to the LCC model could provide an opening for AirPhil to follow a more hybrid model. AirPhil already codeshares with PAL and could pursue partnerships with foreign carriers seeking improved access to domestic destinations in the Philippines as full-service carrier PAL continues to increase its focus on the international market. AirPhil already offers some frills, such as free checked luggage, in an attempt to differentiate its product from larger Cebu Pacific. In Singapore it also decided to use Terminal 2 instead of following Cebu Pacific into Changi’s budget terminal.

...following a hybrid model comes at a cost...
However, as Mr Kingshott pointed out, following a hybrid model comes at a cost. AirPhil’s costs on domestic trunk routes are already higher as its A320 fleet is smaller and utilised less (Cebu Pacific enjoys more economies of scale with its much larger A320 fleet and utilises its A320s on average about two more hours than AirPhil, primarily because Cebu Pacific now does a lot more international flying).

Cebu Pacific also now has a cost advantage over AirPhil on the turboprop routes because the ATR-72 has lower per seat costs than the faster but generally less economical Dash 8. AirPhil also uses a legacy reservation system from Sabre. Its codeshare with PAL also adds cost, although this cost is offset as the AirPhil seats sold by PAL are typically higher-yielding than seats sold by AirPhil directly.

Future of Zest Air appears more uncertain

There is clearly room in the Philippine domestic market for at least two LCCs and it would make sense for AirPhil to differentiate itself from Cebu Pacific by following a slightly different model. Zest Air, which currently operates seven A320 family aircraft, is probably the most vulnerable as it is the smallest of the carriers and does not yet have the economy of scale enjoyed by Cebu Pacific or the partnership AirPhil has with PAL.

Zest’s most valuable assets are its slots at Manila...
Zest also does not have as much cash at its disposal. Zest’s most valuable assets are its slots at Manila, which Cebu Pacific and AirPhil would quickly swoop up if given the opportunity. The current slot situation at Manila is currently one of the biggest challenges limiting growth for Cebu Pacific, AirPhil and the domestic LCC market generally. The carriers are now having to base some of their additional aircraft at Cebu instead of Manila but believe more slots could potentially be made available at Manila by improving the efficiency of operations at the congested airport.

Tiger-SEAir and AirAsia Philippines are also eyeing the domestic market. But the incumbents are confident the status quo will be maintained and neither carrier will secure permission to operate domestic trunk routes.

Tiger and SEAir joint venture remains in limbo

Tiger and SEAir initially filed for domestic trunk routes in 2Q2011 and have since been fighting a show cause order which forced them to suspend ticket sales and postpone the launch of flights from Manila to Cebu and Davao. Tiger has said its planned 33% investment in the joint venture with SEAir is contingent on securing domestic rights. It is looking increasingly likely that the application will be denied and the proposed joint venture will fizzle altogether – similar to what recently happened with Tiger’s planned joint venture in Thailand.

Without the equity tie-up and domestic joint venture, the marketing tie-up which has been in place between Tiger and SEAir since late last year on international routes could also be in jeopardy. The marketing tie-up now includes SEAir operating two Tiger-branded A319s from Manila's alternative airport, Clark. Expansion of this operation has been put on hold multiple times. The marketing tie-up and proposed joint venture excludes SEAir's existing small turboprop domestic operation, which includes routes from Manila to regional destinations such as Caticlan and currently accounts for 1% of total capacity in the Philippines domestic market.

AirAsia Philippines misses launch target

The SEAir Tiger-branded international operation now faces the prospect of competition on all of its routes from AirAsia Philippines. The new AirAsia affiliate took delivery of its first A320 in Aug-2011, unveiling plans to launch services in Oct-2011. AirAsia Philippines was aiming to start by year-end linking Clark with five international destinations – Bangkok, Hong Kong, Macau, Singapore and Seoul – and two domestic destinations – Kalibo and Puerto Princesa. But ticket sales have not yet begun on any of the planned initial routes and the AirAsia Group said this week that its new Philippine affiliate is now aiming to launch services in early 2012 as it continues to work on securing required regulatory approvals.

...the new carrier has only received a temporary permit for international routes...
AirAsia Philippines, which plans to operate seven A320s by the end of 2012, should still be able to launch services on some international routes – including Bangkok, Singapore and Macau – in 1Q2012.

But sources tell CAPA some of the planned international routes, particularly South Korea, are in jeopardy because of a lack of room in existing bilaterals for another Philippine carrier. AirAsia Philippines may also not receive the domestic licence it needs to operate the planned Clark-Kalibo and Clark-Puerto Princesa routes. For now the new carrier has only received a temporary permit for international routes. Its first aircraft has been sitting at Clark now for 10 weeks without a single revenue service and a second aircraft is about to be delivered.

While AirAsia Philippines may have some initial headaches, its ability to leverage the AirAsia brand and the group’s infrastructure across Asia should allow it to become established as a major player in the Philippine international market. Tiger and small local LCC Spirit of Manila are the most vulnerable as AirAsia Philippines quickly expands at Clark. The impact on Cebu Pacific and AirPhil should be limited because they have the advantage of operating international flights at more convenient Manila. They are also primarily domestic carriers and are focussed on profiting from their enviable position in the fast-growing Philippine domestic market.

Given the slot restrictions at Manila and the challenges Tiger/SEAir has faced, the Philippine domestic market remains relatively closed. But with two to three LCCs competing fiercely and an unprecedentedly high LCC penetration rate, fares will almost certainly remain low. As a result demand will continue to be stimulated and, as more Filipinos start to fly more often, the domestic market should continue to chalk up double-digit annual growth.

As Mr Kingshott pointed out earlier this month, the domestic LCC penetration rate now being achieved in the Philippines is without precedent in the global industry. “It proves if you can take fares to a level where people can afford them, LCCs will succeed,” he said.

While domestic LCC penetration rates of 50% to 60% are common in some other emerging markets - such as Brazil, India, Malaysia and Mexico - there has never been a domestic market of a significant size with an LCC penetration rate approaching 80%. In mature markets, such as the US and several European countries, domestic LCC penetration rates are currently about 30%.

JAMCO Opens Philippine Subsidiary

To make Boeing 787 and Airbus 350 composite materials

October 17, 2011

Tokyo - Aircraft parts supplier Japan Aircraft Maintenance Co., Ltd., (JAMCO) has recently opened its Philippine base at the Clark Freeport in September  to manufacture composite panels and aircraft interiors designed for the latest aircraft of Chicago-based American Company Boeing, the Boeing 787, and Toulouse-based European conglomerate, Airbus S.A.S. for its upcoming aircraft, The Airbus 350.

Jamco Phils. Inc. (JPI), with initial investments worth 4 million US Dollars, will exclusively engage in the business of manufacturing aircraft parts and equipment to both Airbus and Boeing and to provide other services necessary to aircraft operations.

"As a leader in the design, manufacturing, and certification of aircraft interior products, continued recognition of our on-time delivery performance and high level of quality supports our future success," Norikazu Natsume, President and CEO of JAMCO America, said.

JAMCO produces lavatory modules for the Beoing 787 as well as flight deck interiors, flight deck door, bulkhead assembly, and galley. It also produces for Airbus Advanced Pultrusion-produced upper deck floor cross beams, CFRP Floor Crossbeams, vertical stabilizer stiffeners and stringers for the A380.    

JAMCO's main Headquarters is in Tokyo with global manufacturing branches in United States, Europe, Singapore and lately, the Philippines.  The company also manufactures parts for Bombardier, a Canadian based Aircraft Manufacturer. AFP

International Traffic Grows 11% at first half

October 16, 2011

The number of passengers on international flights coming and going into the country grew by  11 percent from January to June 2011, rising to 8.078 million from 7.269 million in the same period last year, according to the Civil Aeronautics Board (CAB).

Included in the number are passengers booked as “non-revenue.” 

Of a total of 8,035,216 million passengers recorded from January to June, 3,934,291 were incoming passengers and 4,100,925 were outgoing ones. Non-revenue passengers numbered 42,856.

In the same period last year, total traffic stood at 7,269,830, including 32,106 non-revenue passengers.
“The traffic continues to improve because the airline industry as a whole is improving. Many airlines also offer cheaper fares and many flights and the appetite to travel via airplane has come back,” CAB executive director Carmelo Arcilla explained.

Philippine Airlines (PAL), which topped the passenger traffic on CAB’s list, saw its traffic improving to 2,044,491 versus 1,951,494 last year.

Cebu Pacific Air came in second, ferrying 1,296,556 passengers as of June 30, from 1,008,389 in the same period in 2010.

Zest Air reported 84,793 international passengers; Airphil Express, 84,433; and Seair 90,280 passengers.

The other top carriers on CAB’s list were: Cathay Pacific Airways, 712,117; Singapore Airlines, 339,116; Asiana Airlines, 278,286; Emirates Air, 286,085; Northwest Airlines, 176,328; Korean Air, 291,255; Thai Airways, 122,467; China Airlines, 112,094; Asiana Airlines, 278,286; and Etihad Airways,224,173; and Qatar Airways, 219,413.

Court okays $175 million payment for Naia terminal 3

October 15, 2011

By Rey Requejo and Ferdie Fabella
A lower court has approved the government’s petition to put in escrow account its proffered payment of $175 million for the expropriation of the Naia Terminal 3. 

The Pasay regional trial court ordered the terminal builder, Philippine International Airport Terminals Co., to produce a clean deed transferring the facility to the Philippine government as a condition for the payment, which includes a P3-billion advance. 

Judge Eugenio Dela Cruz granted the petition filed by the Department of Transportation and Communications and Manila International Airport Authority, representing the government.Solicitor General Jose Cadiz, who filed the petition, said the ruling would pave the way for the resolution of the long running case.
Dela Cruz designated the state-owned Land Bank of the Philippines and Development Bank of the Philippines as the escrow agents. 

The court said the $175 million deposit will only be released to Piatco once it submits a warranty that the structures and facilities of the terminal are free from liens and encumbrances. 

“Upon payment of the plaintiffs (government) of the said just compensation in an escrow account, this court recognizes the Republic of the Philippines’ right to exercise full rights of ownership of the NAIA III structures and facilities,” Dela Cruz said in his decision. 

The court held that Piatco, as owner of the Terminal 3, is the one entitled to the just compensation as it had ruled in 2004 when it mandated the payment to the company prior to a government takeover.

HK Airport Service Providers Takes Over NAIA Terminal 2

October 15, 2011

Flag carrier Philippine Airlines’ (PAL) has hired the services of Hong Kong-based Jardine Airport Services Limited (JASL) firm to train its staff at the Ninoy Aquino International Airport (NAIA) Terminal 2 and the Mactan-Cebu International Airport.

Top executives of Jardine Airport Services Limited, a Hong Kong-based service provider, flew to Manila over the weekend to assess the situation at the PAL hub, said Sky Logistics Philippines president Rory Jon Sepulveda.

SkyLogistics Philippines (SLP) is the local partner of Jardine Airport Services Limited (JASL). Jardine Airport Services provides ground handling and aircraft ramp handling services, such as loading and unloading of baggage, cargo, and mail at the Hong Kong international airport. 

The company also provides passenger services, including check-in, meeting flights/boarding control, baggage services, ticketing and passenger information services, in town check-in services, wheelchairs, cross boundary ferry terminal, and crowd control device services; and operation services, including flight operations/centralized crew administration, flight control/centralized load control, tarmac co-ordination, and airline host DCS administration and application/cute services. 

In addition, it provides cargo services, including import/export documentation, ULD control, tracing and claims, warehouse supervision, space control, and freighter loadsheet services; professional and support services, including business development and support, quality assurance and risk management, human resources, learning and development, finance, procurement, and information technology services; and facility management services.

"Jardine is expected to come up with proposals for Sky Logistics to improve NAIA and Mactan service based on Jardine’s experience in Hong Kong", Sepulveda noted.
SLP intends to provide much better services at the Ninoy Aquino International Airport Terminal 2 and the Mactan/Cebu International Airport.

Sepulveda said JASL Managing Director Enoch Lam and two of his key lieutenants toured PAL’s hub at the NAIA Centennial Terminal 2 with the SkyLogistics team. 

“They observed ramp operations, cargo and passenger handling, and took note of how these can be improved based on their experience in Hong Kong,” Sepulveda added.

“Jardine Airport Services is one of the world’s best airport service providers. We’re honored that it has taken interest in our modest operations. We hope we could reach an agreement soon so that our customer, Philippine Airlines and its millions of passengers, can benefit from their expertise,” says Sepulveda.

Jardine Airport Services Limited is a joint venture between China National Aviation Co., Ltd. and Jardine, Matheson & Co., Limited.

Daraga Airport Rises

October 15, 2011

By Genivi Factao

Albay Gov. Joey Salceda announced development of the Southern Luzon International Airport (New Legaspi Airport) in Daraga, Albay is in full swing and is finding investors for the redevelopment of the old Legazpi airport when the new airport opens in 2014.

"We are just waiting for the bidding of the terminal of Daraga airport. The needed investment for the project is about P3.4 billion. The Legazpi airport is up for redevelopment; we will make it an integrated development like Singapore’s Sentosa," Salceda said at the sidelines of the Orgullo Kan Bikol held at Megatrade Hall of SM Megamall held recently.

Salceda said the Bicol region, particularly the twin airports of Naga and Legaspi has been growing in double digits as it slowly become one of the top tourist destination in the country.

International tourists to Albay in the first quarter numbered 54,000, up 51 percent from last year. This year, the province expects foreign tourists to hit 150,000.

The Department of Transportation and Communications (DOTC) is studying a proposal to bundle the privatization of the old Legazpi airport with the SLIA terminal construction.

Salceda said the airport is on the priority list of private-public partnership projects. The private sector is being enticed to develop the old Legazpi airport into something like Sentosa that can be linked to Ligñon Hill development.

Earlier, DOTC Secretary Mar Roxas said the terminal component of the project will be funded by ODA loans and funds coming from the GAA.

777 Gear problem forces PAL back to MNL

October 14, 2011

A 777-300ER plane belonging to Philippine Airlines (PAL) was forced to return to Manila after reporting a landing gear problem.

Philippine Airlines flight PR 300 bound for Hong Kong departed runway 06-24 at 7:56 a.m. from Ninoy Aquino International Airport Terminal 2 with 359 passengers including 2 infants and 13 flight crew.

According to Capt. Alejandro P. Campos, Jr., vice-president for flight operations, the aircraft did not declare emergency landing on its return.

"The aircraft took off normally... But during the flight, the pilot saw the landing gear was not properly stowed. Rather than continue, they went back. This was a retraction problem," he said.

The airline on Friday clarified that none of its terminated employees were involved in aircraft maintenance, saying that PAL’s fleet of airplanes are being maintained by Lufthansa Technik Philippines (LTP).

Passenger Carol Tinio, who is  traveling with her son for a vacation in Hong Kong, reported tremors inside the plane and started praying for safety, while German national Dirk Roessler said he was unaware of any emergency until he saw rescue personnel following the plane after landing. Passengers were eventually transferred to another plane, a Boeing 747 that departed past noon on the same day towards Hong Kong. 

Armless Pilot Licensed To Fly

And a Filipino Too!

By Willy Balasa

October 14, 2011

JESSICA Cox, the Filipino-American first licensed armless pilot and Guinness World record holder, is in the country for a vacation.

Cox, 28, arrived at the Ninoy Aquino International Airport Sunday early morning Sunday on board a Philippine Airlines flight from the United States.

She will spend a month long vacation to see her family and relatives where her mother, Inez, hails from Bobon, Samar.

In a brief interview, she said that, "I can understand a little bit [Visayan dialect]. I'm going to visit the family, but I don't speak it very much".

"My right foot is on the yoke, and my left foot is on the throttle. I use both feet, and I don't have special equipment. I just fly the plane," she said, describing how she flies a plane.

The Fil-Am pilot also described  flying  as  like a butterfly in the sky and added that it’s a big challenge being physically-challenged.

Cox is also fond of gymnastics, swimming, and martial art. She holds a double black belt in taekwondo.

"I think it's an example of what other people can achieve as well. If I can fly an airplane, everyone else can do what they want to do. Sometimes we limit ourselves with our own perceptions," she said.

Cox  has a message for Filipinos: "Every one of us has a challenge, whether it's physical, psychological, or emotional. We all have our challenges, but we also have a choice whether to let it stand in the way, or allow it to give us an opportunity to succeed. All of us has that option. The choice is yours." 

MVP starts hunt for PAL executive

October 14, 2011

Telecom czar Manuel V. Pangilinan, or MVP, has started the search for the top executive who will steer Philippine Airlines, his next acquisition target. The grapevine said he had narrowed his options to individual chief executive officers presently running the operations of companies under the fold of the PLDT/Smart/Metro Pacific group.

Thus, the candidates for the plum PAL job include Jose Ma. Lim of Metro Pacific Investments Corp., Napoleon Nazareno of Philippine Long Distance Telephone Co. and Smart Communications Inc., Ricky Vargas of Maynilad Water Services Inc. and Ramoncito Fernandez of Metro Pacific Tollways Corp.
The grapevine said Ricky Vargas had the slight edge over the other candidates for the PAL position. A former Cabinet member, meanwhile, will likely fill up the vacancy in Maynilad Water, assuming the negotiations to acquire PAL from tycoon Lucio Tan push through.
The ex-Cabinet member is coming back to the private sector after serving a controversial post in the government. MVP himself is lining him up for a juicy position in the PLDT/Smart/Metro Pacific group. Moreover, MVP can defer to him in matters concerning aviation, where he had a successful career before joining the bureaucracy.
San Miguel’s challenge
The negotiations between MVP and Lucio Tan may still fall through. Ramon Ang, president and chief operating officer of San Miguel Corp., himself said he was giving advice to the airline tycoon to solve its financial and labor troubles. The grapevine said it would not be far-fetched if San Miguel, Ang or his own personal group decided to make a rival bid for the airline.
MVP, though, is bent on purchasing Asia’s oldest airline. A close associate of MVP said Hong Kong-based First Pacific Co. Ltd. had “agreed in principle” to acquire the flag carrier and was just waiting for a resolution of the airline’s labor dispute before finalizing the transaction.
The labor row stemmed from PAL management’s decision to outsource most of its workforce requirements. At least 2,600 workers will be affected by the arrangement.
MVP’s overtures were supported by the formation of a new aviation company last month. PLDT, Metro Pacific Investments created Pacific Global One Aviation Inc. with an initial capital of P400 million. Other incorporators of Pacific Global One are Meralco Powergen Corp. and Metro Pacific Tollways, both affiliated with MVP.
Windfall from PAL
PAL is readying a check of P2.5 billion this weekend to pay for the separation and other benefits of about 2,400 workers who will lose their jobs due to the company’s outsourcing program. PAL secured the funds after signing a $50-million loan agreement with Credit Suisse AG.
The airline has assured workers from the catering, ground handling and call center reservations units they can get their payment in full as promised.
Workers covered by the spinoff will receive P50,000 in gratuity pay upon receipt of termination letters and another P50,000 after signing up with service providers.
President Benigno Aquino III, meanwhile, has acknowledged the strategic importance of PAL’s operations. The President cited national interest and the growing unrest in the Middle East, where millions of Filipinos work.
The Philippines, he says, needs at least two long haul planes to fetch Filipinos wishing to leave the troubled region.
“We cannot allow our national flag carrier and all the other carriers capable of reaching those destinations to become non-entities and lose that ability, if there is a need to repatriate our countrymen,” says Aquino.

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APECO Eyes Separate Funding For Aurora Airport

By Butch Fernandez

October 13, 2011

 Administrators of the Aurora Pacific Economic Zone and Freeport Authority (Apeco) are eyeing separate funding sources to facilitate early completion of its air and seaport projects to attract more local and foreign investors to the region.

Roberto Mathay, Apeco president and chief executive officer, confirmed ongoing efforts by the national government to tap the Korean Export-Import Bank to provide $55-million funding for the seaport project under the official development assistance (ODA) program.

Mathay said additional funding of P92 million is being allocated by the Philippine government in the annual national expenditure program to complete a proposed 1.5-kilometer airport runway, under the Civil Aeronautics Authority.

This developed as Sen. Frank Drilon, finance committee chairman, announced after a public hearing on Wednesday that Apeco’s proposed 2012 budget, amounting to P332.5 million, is deemed submitted for approval, despite opposition from restive residents affected by the projects.

“We are going to try to track more locators to Apeco pa rin. Our mandate is to bring varied business interests in marine-culture business, as well as ecotourism to the zone so we can transform it to something the people from Casiguran can be proud of,” Mathay said. “We are [also] looking at agroindustrial or mariculture, or other businesses which are more fitting to the area. We would like to focus on small to medium enterprises, both from the Philippines and from abroad.” 

Mathay disclosed they have, likewise, requested funding from Congress, as part of their capital outlay for this year, to have “a standard factory building where we can have smaller companies establish their operations in the zone.”

He reported that the mariculture business at the zone include raising bangus and tilapia and processing these to fillet or fish ball which are then sold in the local market and nearby provinces, such as in Isabela and Quirino. “Eventually, we may also export them,” he added. 

“There are other prospects. One company we are signing up plans to put up sea cages. We are trying to finalize the details [for their operation]  by November,” Mathay said.

PAL Resumes Cargo Ops

October 9, 2011

Philippine Airlines (PAL) has resumed cargo services to all its domestic, Asian regional and inter-continental flights flying out of NAIA Terminal 2 says its President over the weekend.

“We're now accepting cargo bookings for all international flights including wide-body domestic flights that operate out of Terminal 2.” says PAL President Jaime J. Bautista in a statement.

“The resumption of cargo service is a boon to freight forwarders and exporters who benefit from the flag carrier's high-capacity, wide-body aircraft and extensive domestic and international network.” adds Bautista.

Among the first to be loaded on PAL's cargo belly were boxes of donated food and other vital goods from Mindanao, for distribution to flood victims in Tarlac and Calumpit, Bulacan, the airline said.

Aquino Government unveils 5 year airport plans

Costing 60 Billion Pesos

October 7, 2011

Transportation Secretary Manuel A. Roxas II unveiled Thursday a five-year airport-infrastructure plan estimated to cost  P60-billion ($1.6 billion US Dollars) design to rehabilitate, upgrade and modernize the country’s major airports nationwide.

Among the infrastructure plan is the completion of the P7.8 billion Laguindingan airport which is expected to open in 2013; followed by the 3.2 billion Daraga Airport to open in 2014 and the P8 billion Bohol airport to open in 2016. 

Speaking before the Makati Business Club (MBC), The Secretary said that the Aquino government  will put 12.4 billion pesos for Clark International Airport to transform it as premier gateway of the country together with the construction of 108 billion Naia-Clark Express Rail Link dubbed as the New North Rail Project (Northrail) to be funded by Japan International Cooperation Agency (JICA). The High-speed NorthRail spans 100-kilometer from Centennial Terminal 2 to Clark International Airport in Pampanga, with a total travel time of 45 minutes.

Also on the pipeline is the construction of a new passenger terminal 2 at Mactan Cebu International Airport with a budget of P10.15 billion and the P1 billion new passenger terminal to be constructed in Tacloban airport.

DOTC has also set aside P2.07 billion for the rehabilitation of Naia terminals 1, 2  and 3 set for completion in 2014. Roxas said plans are under way to decongest NAIA through the reduction of corporate and air taxi flights by 50 percent of the current number of sorties during peak hours, construction of a rapid-exit taxiway to reduce runway occupancy time, and the transfer of noncommercial flights to Sangley Point.

Airports earmarked for massive upgrades are Kalibo International Airport with P3 billion budget for new passenger terminal building and airside facilities upgrade, P4.2 billion for Puerto Princesa Airport development project, and various airport upgrades nationwide with an P8 billion price tag. They include the airports of Laoag, Catarman, Ormoc, San Vicente, San Jose, Masbate, Borongan, Maasin, Butuan, Dipolog, Ozamiz, Pagadian, Cotabato, Davao, Zamboanga and Tawi-Tawi.

Meanwhile, five (5) new airports are going to be build in Pangasinan, Catarman, Negros Oriental, Bukidnon, and Sultan Kudarat. 

Overflight Fee Increase Deferred

Takes effect January 1, 2012

October 6, 2011

The Civil Aviation Authority (CAAP) has deferred collecting a 10% increase of overflight charges within the country which was supposed to be effective October 1 after Airline Operators Council (AOC) protested for lack of proper notice and publication.    

Cathay Pacific Airways through its station manager Ed Monreal brought to the attention to CAAP saying the overflight charge increase was not published in a daily newspaper and that members of the AOC were not duly informed as required by law.

Director General Ramon Gutierrez said the increase in overflight charges was published in 2009, during the incumbency of Daniel Dimagiba, former head of the Air Transportation Office but the information apparently was not widely circulated then since the Air Transportation Office (ATO), was being revamped and replaced with a new name CAAP.

The aviation authority ordered the deferment after a meeting with the AOC, which said that 30 of its airline members were not properly informed on the increased overflight rate. The AOC has 48 members representing various aviation firms, mostly passenger airliners in the Asia Pacific Region. They include Philippine Airlines, Cebu Pacific, Zest Air, Singapore Airlines, Malaysia Airlines, Thai Airways, Vietnam Airlines, Garuda, Qantas, China Air, KLM, Thai Airways, Taiwan Air, Cathay Pacific, Delta Airlines, Emirates, among others.

Gutierrez agreed to defer the implementation of the increase due to some lapses and oversight within the agency to January 2012. 

Gutierrez said CAAP derives P2 billion of its P3 billion yearly income from overflights by international air carriers, crossing the Philippine Flight Information Region (FIR).

"At present, the CAAP bills the aircraft manually for overflights, through the Air Traffic Services Division. Its personnel keep track on dozens of aircraft crisscrossing our airspace and charge them for the use of our navigational aids (Navaids) according to distance travelled within the FIR" says Gutierrez. 

The CAAP is upgrading its capability for automation through the P10-billion Air Traffic Management/Communication, Navigation Service (ATM/CNS) project, that hopes to do away with manual billing, instead, an automatic bill will be done by computers for prompt and accurate collection design to increase revenue of the government.

Overflight charges covers those airline flying over Philippine Airspace without making a stop-over in the country that originates or destined either in Hong Kong, Taiwan and Japan, for Singapore, Malaysia, Indonesia, Thailand, Australia and Vietnam or the US territories of Guam or Saipan.  

Hainan buys Zest Air

Makes 10th Subsidiary Airline

October 3, 2011

Haikou - China's Fourth largest airline company is buying all the minority share of Philippine low cost carrier Zest Airways.

Zest Air parent AMY Holdings together with other local investors would continue to retain 60% share of the airline company while Hainan Airlines (HU) through Grand China Holdings (HNA Group) will take 40% share in accord with Philippine Laws.

 Alfredo Yao, Chairman of AMY Holdings, said its foreign partner has already started conducting due diligence of Zest Airways which take some time to finish before the actual sale but it signed a Memorandum of Understanding with officials of the HNA Group based on initial audit results of the Philippine-based carrier.

Hainan Airlines parent, Grand China Airlines Holding Company (GCAHC) owns Shanxi Airlines, Chang'an Airlines, and China Xinhua Airlines, and investments in other airlines to include Beijing Capital Airlines (70%), Lucky Air (67.95%), Tianjin Airlines (20%), Yangtze River Express (51%), Hong Kong Airlines (45%) and Hong Kong Express Airways (45%). Its investment in Zest Airways (40%) would be its 10th acquisition and affiliate airline.

The Hainan Group's entry into Zest Air’s would paved the way  for the airline to finance its aggressive expansion strategy in the Philippines for domestic and international operations as it takes nine Airbus 320 delivery in 2012.

Zest Air has a fleet of six Airbus 320 planes and four Modern Ark 60s. The company would have 19 by next year, as it plans to mount more flights to China like more flights for its hub in Kalibo to different provinces in China.

The carrier aims to fly Manila-Singapore route soon as well as mount flights to Taipei, Palau, Bahrain and Dammam. Zest Air currently flies to Incheon and Pusan in South Korea from Kalibo and Cebu and some Chinese province capital.

Hainan Airlines reported a first-half net profit of $104.7 million, up 20.2% compared its posted income a year ago.

Mayday, Huey Down!

Kills Three

By Roel Pareño

October 2, 2011

ZAMBOANGA CITY  ,Philippines – A combat helicopter of the Philippine Air Force (PAF) crash-landed in a remote village in Sulu yesterday, leaving three soldiers dead and one injured.

Western Mindanao Command (Westmincom) spokesman Lt. Col. Randolf Cabangbang said the incident occurred in the village of Panglayahan in Patikul around 8:30 a.m. yesterday.

There was no immediate information on the fatalities but sources said the Huey helicopter was piloted by a certain Capt. Antepuesto and 2Lt. Zulueta with crewman Sgt. Orkina. The identity of the fourth passenger was not known.

Cabangbang said the ill-fated aircraft took off from Camp Bautista in Jolo on a resupply mission to 6th Marine Battallion Landing Team (MBLT) in Camp Baladad in Patikul.

“The UH-1H aircraft with tail number 606 encountered loss of engine power prior to landing and the pilots initiated emergency landing at Camp Baladad,” Cabangbang said.

“The said aircraft hit the ground hard and rolled down the hill,” he added.

Cabangbang said initial information from the accident site revealed the helicopter was totally wrecked.
He said the Joint Task Force Sulu alerted the Marines to secure the crash site to retrieve the bodies of the dead soldiers and bring the wounded to hospital.

The 3rd Air Division command here immediately ordered the grounding of the Huey helicopters while an investigation on the cause of the accident is ongoing.

Air Force chief Gen. Oscar Rabena ordered an investigation of the incident, spokesman Lt. Col. Miguel Okol said.

“Gen. Rabena has dispatched an additional aircraft to secure the area and ferry the investigation team. There were three reported fatalities but the co-pilot survived,” Okol said.

“The pilot and the co-pilot attempted a precautionary landing due to mechanical problem,” he said. – With Rudy Santos, Jaime Laude, AP