United Airlines to grow Manila

Expects 10% Growth for 2012

November 30, 2011

By Kathleen A. Martin 

While some airlines announced frequency reduction, United Airlines expects continued growth in Manila next year as it embarks further consolidation out of its merger with Continental Airlines.

“We expect to grow by 10% [in 2012] over how we’re doing right now [2011],” Clodelsa Ty, United Airlines country manager for the Philippines, said in a briefing.

The firm is “optimistic” on growth for next year, Ms. Ty said, on the back of expected increases in cargo and passenger volumes.

United Airlines is a subsidiary of United Continental Holdings, Inc., formerly UAL Corp.

UAL and Continental Airlines, Inc. completed a stock-swap deal in October 2010, and the combination of the two airlines became one of the world’s largest.

Koji Nagata, director for communications in the Asia and the Pacific, said during the same briefing the firm is banking on its large network as one of its advantages over other carriers.

“With the new United Continental, we are the world’s largest network [and that’s] one of our strengths over other airlines,” Mr. Nagata said.

“The customers have more choices by way of United Airlines then,” he added.

United Airlines has nine weekly flights on the Manila-to-Guam route.

When asked if United Airlines is looking at increasing flight frequencies on said route, Ms. Ty said the firm is reviewing it.

“We continue to evaluate that,” Ms. Ty said, pertaining to a possible increase in flight frequencies.

“Today, we’re staying with our current schedule… but we will respond to whatever the market demands,” Ms. Ty said.

She added the airline “at the moment” is not looking at cutting its frequencies on the Manila-to-Guam route.

Manila International Airport Cleared by US TSA

November 25, 2011

MANILA, Philippines - A team from the US Transportation Security Administration (TSA) found the Ninoy Aquino International Airport (NAIA) complex to be "generally compliant" with international security standards, according to Transportation and Communication Secretary Manuel Roxas.

Roxas met with the five-member TSA team, led by Wayne Hall, at the end of its Annual Security Assessment (ASA) inspection, which lasted from November 14 to-19.

"Despite a few specific instances where the TSA found need for improvement, the Philippines was found to be in general satisfactory condition by the TSA," Roxas said, in a statement.

"The favorable result of TSA’s inspection shows that our initial efforts to make improvement in our airport security have been successful.  We are further committed to sustaining these improvements to bring benefits to our local and international passengers and tourists," he added.

In response to areas cited by TSA as needing improvement, Roxas approved the purchase of additional CCTV cameras to be installed in critical areas, as well as additional mobile patrol vehicles.

The TSA security assessment covered airport ID processing and access controls, security, quality control, contingency and emergency plans, cargo security, perimeter and terminal access control systems, passenger and cabin baggage screening.

The annual review included air carriers Delta Airlines, Hawaiian Airlines, Continental Airlines, Fly Guam Airlines, and Philippine Airlines, which all fly to the US.

US federal laws require the TSA to conduct ASA on all airports that have "last point of departure" to the US. - ABS-CBN.

Air Philippines Fastest Growing Airline in 2011

SEAIR Biggest Loser!

November 24, 2011

Airphil Express, Philippines fastest growing airline beating Cebu Pacific by a mile.
Low Cost Carrier Airphil Express is heading to become the country's fastest growing Airline for 2011 as it exceeded 100 percent growth rate in the span of one year, data from The Civil Aeronautics Board (CAB) showed recently.

Air Philippines, operating as AirPhil Express, more than doubled its domestic passenger to 2.71 million, from 1.122 million it carried last year.

Zest Airways, another low cost carrier, followed Airphils path posting healthy gains of 75%, all in the first nine months as domestic passengers it carried rose from 902,935 in the same period of last year to 1.58 million this year.

Meanwhile,  Cebu Pacific (CEB), the country's biggest LCC, saw leveling of its market share as it registered increase of only 3% or  a rise of 6.17 million passengers from 6 million in the same nine-month period.

Flag carrier Philippine Airlines (PAL) posted a sharp drop in passenger traffic for the nine-month period to 3.44 million, down 16 % year on year, as it saw transition period for its flight operations which still has to normalized.

South East Asian Airlines is the biggest loser as it registered a 27% decrease of its passengers from 159,086 to 115,525 passengers for the same 10 month period, year on year.
To feed its tremendous growth, APX senior vice-president for marketing and sales Alfredo Herrera said that by 2012 additional five A320s will join the fleet and another five A320s will join in 2013 to complete its 20-aircraft, $250-million expansion program approved last year. 

Also, Butch Rordiguez, Zest Airways’ commercial and external affairs senior vice president, said the company will be acquiring 15 additional Airbus A320 up to 2015 as it targets to increase passenger numbers as well as its fleet of Airbus A320's.

Cebu Pacific will take an additional 16 Airbus A320 aircraft between 2012 and 2014.

Passenger numbers on domestic commercial flights increased 14% to 14.03 million in January to September from the 12.28 million recorded in the same period last year, data from the Civil Aeronautics Board showed.

Cargo volume this year dipped 5% to 127.73 million kilograms from 134.24 million kg in the same comparative periods, according to the same set of data released last week. 

Airphil express and Zest Air carried more cargo than the rest, posting hikes of 236% to 16.074 million kg and 11.8% to 9.99 million kg, respectively. All other carriers saw domestic cargo volumes drop.

FAA December review moved to January

CAT 1 Decision on Schedule for June 2012

November 23, 2011

By Recto Mercene
Business Mirror

The Philippines, eager to return to Category 1 status on the condition of its aviation industry, must wait a little longer—until January 2012—for a review by the United States Federal Aviation Administration (FAA).

FAA Administrator Randy Babbitt
Nonetheless, Civil Aviation Authority of the Philippines (Caap) Director General Ramon S. Gutierrez said the Philippines is ready for the review and is hoping to get the green light for the much-sought return to Category 1 status.

The FAA moved back from December this year its preliminary review for lack of personnel, ironically a similar situation the Philippines was in and one reason it lost its Category 1 rating. The rating allows Philippine air carriers to expand operations in the US.

US Request Postponements

“The FAA initiated the rescheduled technical review due to personnel shortage because of the advent of the holiday season,” Gutierrez said.

The Caap invited the FAA to conduct the review after more than two years of streamlining its operations that included upgrading and improving scores of “significant safety concerns” found in 2009.

The FAA downgraded the Philippines to Category 2 in 2008 after a safety audit in November 2007, preventing Philippine carriers from expanding operations to the US mainland. Flag-carrier Philippine Airlines is at present the only one flying to the US.

Gutierrez said there were high hopes of obtaining the rating upgrade but “audits are very subjective undertakings and we’re keeping our fingers crossed.” 

Cebu Pacific, which hopes to open a route to the US, suspended its plans, waiting for a more favorable environment.

After the FAA, the European Union will conduct its own review and assessment of the improvements made by the country regarding its various functions and activities, involving regulations, issuance of licenses, and streamlining of personnel.

In this connection, the EU added two more local carriers to its blacklist for not complying with safety standards, according to reports from Brussels.

More Philippine-Based Airline Banned from EU

Aeromajestic, an airline company from Mindanao, and Interisland Airlines, a charter service at the Manila Domestic Airport, were included in the list that also has air carriers in Honduras and in the two Congos that are forbidden from flying into the 27-nation bloc.

Aero Majestic, dispatching a twin-engine turbo-propeller YS-11, flew its maiden flight from Zamboanga to Cagayan de Oro City on September 19 this year.

Interisland Airlines operates non-scheduled passenger and cargo air charter services within the Philippines and Asia. Its fleet of aircraft enables the company to fly to anywhere in the country and to nearby cities in Asia. 

According to reports from Brussels, a Honduran carrier and Jordan Aviation were also barred from operating in the EU.

“Safety comes first. We cannot afford any compromise in this area,” said EU Transport Commissioner Siim Kallas. “Where we have evidence inside or outside the European Union that air carriers are not performing safe operations, we must act to exclude any risks to safety.”  

The EU flight-ban list now contains 273 airlines from 20 countries.

TA-50 For PAF?

Korea Offers Soft Loans for TA-50

November 22, 2011

VISITOR FROM SEOUL President Aquino (right) listens as South Korean President Lee Myung-bak speaks during Monday’s joint news conference in Malacañang. Lee is in Manila for a three-day state visit. JOAN BONDOC
Manila - South Korean President Lee Myung-bak offered the Philippines to consider the South Korean made TA-50 for the Philippine Air Force (PAF) through loan-financing agreement with the Korean government.

The Philippines has been asking the Korean government if they can provide soft loans for jet aircraft procurement as the country doesn't have enough cash to acquire multi-role trainer jets for the PAF.

On Monday, President Benigno Aquino III meet with visiting South Korean President Lee Myung-bak for the country’s military needs.

Mr. Aquino said he and Lee discussed how Korea could help them in upgrading the AFP arsenal.

“I expressed to President Lee the interest of the Philippines to gain some specific defense articles such as military-grade helicopters, boats and aircraft,” Mr. Aquino said in a joint news conference.

“This is in consonance with the upgrading and modernization of the Armed Forces of the Philippines,” the President added.

Lee did not disclose what specific request were made, but the South Korean government representative at the meeting confirmed that TA-50 was indeed offered for Aquino's consideration, with the Korean government shouldering the cost of procurement for the jets of the Philippine Air Force. Procurement of fast Patrol craft for the navy was also in the lists as Korea wanted to cooperate with the Philippines to resolve its maritime problems.

During the visit, South Korea signed an agreement to provide soft loans of up to $500 million to the Philippines. No details were immediately available as to where the loans go.

The concessional loans would come from the Economic Development Cooperation Fund and disbursed through the Export-Import Bank of Korea from this year until 2013, the two countries said.

Some of the funds have been identified to go for the completion of Laguindingan International Airport, construction of Hanjin Power Plant in Subic, and priority irrigation projects to improve rice harvest efficiency. Four rice processing centers will be build in various parts of the country with a project cost P785 million funded by a grant from the Korea International Cooperation Agency.

The TA-50 is a joint venture program of Korea Aerospace Industrie (KAI) and Lockheed Martin of the United States, with a price tag of USD $25 million a piece.

The Philippine Air Force has been shopping for six brand new trainer jet fighters and shortlisted the lists to either Korea’s TA-50 Golden Eagle or Italy’s M-346.

The deal is expected to save the government some $150 million dollars from the purchase of the jets which can be use to fund the capability upgrade of the AFP.

PAF jets ex USAF?

November 18, 2011

The Philippine Air Force (PAF) may be flying USAF F-16 jets if plans don't miscarry as the United States pledged to continue its military assistance to the country from its surplus hardware.

 At the 60th commemoration of the Mutual Defense Treaty between the Philippines and the US the other day, Clinton vowed to stand and fight with the Philippines to help the country achieve its development goals and address security concerns.

The offer was made by US Secretary of State Hillary Clinton saying air assets are the first line of defence to fend off foreign aggressors in the South China Sea territory.

First set of Philippine Air Force  W-3A troop carrier
“Sure enough, this will complement our maritime and interdiction operations in the West Philippine Sea,” AFP Chief General Eduardo Oban Jr. said in a statement.

The AFP welcomes the US commitment but discloses that they are not yet prepared to handle the jets proficiently as they require training for pilots and maintenance personnel alike.

“We will take them when we're ready. Pilots are already training as we speak,” says AFP spokesman Col. Anglo Marcelo Burgos Jr. said.

“Definitely, fighter jets are coming to the PAF. That's why we need trainers for it,” says Burgos but refuses to disclose aircraft type and time frame when they be made available for the country.

“The fighter jets will arrive after the trainers,”. adds Burgos.

Foreign Secretary Albert del Rosario said they raised the potential F-16 deal with US Secretary of State Hillary Clinton, who pledged commitment to a former colony.

Del Rosario said it would be for second-hand F-16s with Manila on the hook to pay for reconditioning, maintenance and pilot training.
The PAF is expecting delivery at the end of the year 20 units of upgraded MG520 helicopters and 4 combat utility helicopters from Poland’s PZL Swidnik and one  aerial recon camera for intelligence operations;

Another set of four combat utility helicopters and six refurbished UH-1H helicopter (ex USAF) will join the air force next year.

PIATCO loses case at ICC

Clears Terminal 3 Ownership 

November 17, 2011

The Republic of the Philippines has won its case against the Philippine International Air Terminals Co. (Piatco) in Singapore for compensation payments worth $565 million for Ninoy Aquino International Airport (NAIA) Terminal 3 project contract.

The Singaporean Court affirmed the ruling of the Singapore-based International Chamber of Commerce (ICC)’s arbitration tribunal that dismissed the claim of Piatco as it junks the consortium’s motion to set aside ICC’s decision. Piatco was ordered by Singapore to pay the government of the Philippines more than $6 million in costs. 

Solicitor-General Jose Anselmo Cadiz said the Singapore court denied the appeal filed by the Philippine International Air Terminals Co. (PIATCO) to set aside the 2010 decision by the ICC finding the consortium in violation of the Philippine Anti-Dummy Law. 

The Singapore High Court told PIATCO that ICC acted within its powers in dismissing Piatco’s claims on the ground of illegality and that the arbitration tribunal observed due process in arriving at the decision. It junked Piatco’s claim that the ICC tribunal misapplied the Anti-Dummy Law and found it disingenuous for PIATCO to insist that it was not given the right to be heard on the issue considering that the case records show that consortium fully argued its case before the arbitral tribunal. 

The Anti-Dummy Law prohibits foreign nationals from controlling 60% of utility industries vested with national interest such as airport and terminal management, operation, administration. PIATCO consortium is substantially owned by German Corporation Fraport. On July 22, 2010, the ICC ruled that Piatco and its German investor Fraport AG committed fraud in the NAIA Terminal 3 Project. 

The ICC tribunal found that Piatco and Fraport illegally ensured that Fraport shall control the public utility through secret shareholder agreements and loans. The amended and supplemental agreement authorized PIATCO to build the $650-million NAIA 3 and grant a franchise to operate and maintain the terminal during the concession period of 25 years. 

The contracts were nullified however by the Supreme Court of the Philippines as it held Paircargo Consortium, predecessor of Piatco, not to possess financial capacity when it was awarded the NAIA 3 contract and that the agreement was contrary to public policy. 

Piatco sued the government before the ICC in Singapore where it sought to recover at least $565 million in damages. Its foreign investor, Fraport, separately sued the government at the International Center for the Settlement of Investment Disputes (ICSID) in Washington. Both companies lost their respective cases. 

In August 2007, the Washington-based ICSID affirmed the Supreme Court’s nullification of the concessions and rejected Fraport’s claim because of its violation of the Anti-Dummy Law. The Singapore-based ICC also rejected Piatco’s claim because of illegality arising from Piatco’s violation of the Anti-Dummy Law.

Piper crash landed at NAIA

Crews safe

November 13, 2011

Fire and rescue personnel at the Ninoy Aquino International Airport spray a light cargo plane with chemical foam to prevent the plane from bursting into flames after its landing gear malfunctioned yesterday. RUDY SANTOS
A Piper Aztec plane (RP-C281) serial number 27-8054014, of Royal Air Charter Service Inc. crash landed at the main runway of the Ninoy Aquino International Airport (Naia)  Saturday, causing several flight delays at the airport. No one suffered injuries.

The Piper cargo plane was loaded with live marine cargo when it touches down at runway 06 but landing wheels collapsed, forcing it to land on its belly and slide along the runway.

"The nose landing gear retracted after a few seconds from landing", NAIA Terminal 1 manager Alvin Candelaria said.
"The plane skidded 100 meters before stopping in the middle of the runway, causing 13 international and domestic flights to be delayed until the plane was towed away." says Joseph Agustin, chief of the Manila International Airport Authority’s ground operations and safety division.

The landing accident at the airport causes flight diversions and delay after the airport was closed for 45 minutes for emergency protocol and clearing of runway.

The plane was piloted by Jun Sanchez and Joramel Bautista.

KLM stops direct plug to Manila

But Clarifies its here to stay!

November 11, 2011

Air France-KLM, has announced that it will scrap its direct Manila-Amsterdam route starting April 2012, according to Cees Ursem, Air France-KLM country manager.

“Our flight has becomes unsustainable to continue because of declining passenger numbers. Couple it with unreasonable tax regime and our business doesn't look so good. ” Ursem said.

The airline reduced its direct Amsterdam-Manila flight from 7 to 6 flights weekly starting from its Winter Schedule on October 31 which is a peak season for them, and by Summer 2012 it will stop in Hong Kong on April before proceeding to Manila and vice-versa.

Data from Civil Aeronautics Board revealed that  Air France-KLM registered a declining passenger numbers to Amsterdam and Europe as compared to figures posted in the previous years. Manila used to be serviced by Boeing 777-300ER last year. Now, it downgraded its service on a much smaller Boeing 777-200ER plane.

The carrier handled some 100,000 passengers from the Philippines last year with 70% of its offered seat taken.

“The strategy is not actually new. KLM used to stop in Hong Kong before they make direct flights to the Philippines. So basically we are just taking one step backward.” Ursem said.

Air France-KLM has no fifth freedom rights to and from Hong Kong and is therefore not allowed to pick up passengers to unload to the crown colony except passengers from Manila on their way to Amsterdam.

“If we can't fill the plane then there is no point flying direct or flying more because overhead expenses for long haul flight ain't cheap,” he adds.

KLM's Manila office will be cut down and some 15 employees will have to go. Our hotel bookings for flight crew which averages 36 rooms a day at Sofitel will also have to be cancelled, Ursem said.

“But we want to maintain our strategic presence in the country. After all we are already the oldest foreign airline operating here. That is already an achievement for us. And since we can't sustain direct flights, you can always fly via stop-over and make  onward connection. That way the country is still in our network.” Ursem explains.

KLM has been using similar strategy to other destinations in Asia from the likes of Jakarta which stops at Singapore, as well as Taipei and Ho Chi Minh which stops in Bangkok Thailand. 

The drawback there is the time but you can always compensate it with lower fares, so the flight becomes competitive and reasonable for the budget conscious.”

Cees Ursem sees the growing presence of Gulf -based carriers operating  in Manila a factor in their decision.

“If you can see, Gulf-based airlines has been growing leap and bounds here, adding more seats and frequency to Europe via their hub in the Middle East” says the KLM country manager, citing Emirates, Ethihad, Qatar and Gulf EAir as examples which flew merely 7-10 flights per week two years ago but now operates 14 flights a week or double daily as compared to them.

“That is 16 more wide body flights to the Philippines carrying more than 350 people per flight. That is roughly 5,000 passengers a week and with 8,000 new passengers per week at Manila, imagine how much do they get from the rest of us” laments Ursem.

KLM started flying to the Philippines in 1951 and is the oldest foreign carrier in the country operating under the same name. It will celebrate its 60th year of operations in December 2011.

Growing PAL

Philippine Airlines plans to resume domestic expansion and looks for green light from US regulators


November 11, 2011

Philippine Airlines (PAL) is not ready to abandon the domestic market – at least not yet. The floundering flag carrier, which has seen its share of the Philippine domestic steadily slip in recent years, plans to add back some domestic capacity in 2012 as its previously-reduced A320 fleet expands again by four aircraft.

International capacity will also be up in 2012 as PAL takes its next batch of B777-300ERs. PAL is banking on the Philippines regaining next year a Category 1 safety rating from the US FAA, which is necessary for the carrier to deploy B777-300ERs on US routes as planned. Continued restrictions on US routes is one of several challenges PAL faces as the carrier also tries to overcome increasing competition from LCCs and continuing worker protests.
As CAPA reported late last month, the LCC penetration rates in the Philippine domestic market has grown since 2005 from less than 50% to about 80%, driven by a combination of rapid expansion by the country’s low-cost carriers and contraction at PAL. Philippine CAB figures show PAL accounted for only 24% of domestic passengers in 2Q2011. PAL’s share of the market has slipped even further since late September, when a strike was waged by ground staff employees affected by PAL’s decision to outsource non-core functions including catering and call centre.

PAL's domestic operation has been pared back to only 60 daily flight since late September

Philippine Airlines President, Jaime Bautista
Philippine Airlines President, Jaime Bautista
Protests against the now implemented outsourcing plan continue, with striking employees having taken possession of PAL’s catering facility in Manila. PAL was able to quickly resume its full international schedule, using catering services from other vendors, but has not yet fully resumed its domestic operation. PAL president Jaime Bautista told CAPA on the sidelines of last week’s Association of Asia Pacific Airlines (AAPA) Assembly of Presidents in Seoul that the carrier is only operating 60 daily domestic flights, down from a pre-strike schedule of 140 flights per day.

Overall PAL is now operating 90% of its normal schedule, compared to only 20% the first day of the strike and 40% on subsequent days. The 10% of flights that remain cancelled are all domestic.

The Philippines’ three domestic LCCs have been hoping that PAL sticks permanently to the reduced schedule, resulting in an even further increase in the LCC penetration rate. But Mr Bautista says PAL still intends to return its domestic schedule to the pre-strike level. He says PAL also plans to increase its domestic schedule in 2012 as it takes delivery of four additional A320s.
Mr Bautista says PAL currently has an A320 family fleet of 16 aircraft (12 A320s and four A319s), down from 22 aircraft a few years ago. The smaller fleet has resulted in dramatic domestic capacity reductions as PAL has not cut its regional international operation, which primarily uses A320s with some routes, such as Hong Kong, utilizing widebody aircraft.

PAL and AirPhil independently expand A320 fleets

PAL’s A320 fleet has shrunk over the last two years as six A320s have been subleased to AirPhil Express, an LCC with the same primary owner as PAL. AirPhil has been steadily increasing its domestic operation as PAL has downsized domestically. AirPhil, which coordinates schedules and has a limited codeshare with PAL, plans to grow its A320 fleet from eight to 15 A320s by the end of 2012. But AirPhil is not sourcing any of its additional aircraft from PAL.

Mr Bautista says PAL has A320 deliveries slated for next April, June, August and November, resulting in a fleet of 20 A320 family aircraft by the end of 2012. He says about half of the additional capacity generated by this aircraft will be directed to the domestic market and half will be directed to the international market.
The resulting domestic capacity expansion will be relatively modest as all three of the country’s domestic LCCs – AirPhil, Cebu Pacific and Zest Air – are also planning significant capacity increases next year. But at least PAL’s expansion will keep it from continuing to rapidly lose market share and stay at or slightly above the 20% threshold domestically.

Capacity share by carrier type in Philippines domestic market (based on seats per week for 7-Nov to 13-Nov-2011)

In addition to the four A320s, PAL has two B777-300ER deliveries slated for 2012. Mr Bautistia says these aircraft will be delivered in June and November. PAL currently operates two leased B777-300ERs and has four more of the type on order with Boeing.

PAL initially committed to acquiring the six B777-300ERs in early 2008, with the anticipation of using the type to replace A340s and B747s on its flights to the US and Canada. But so far PAL has only been able to use its initial fleet of two B777-300ERs on three weekly flights to Vancouver as airlines from countries with Category 2 ratings are unable to add flights to the US or change gauge on existing flights. The FAA downgraded the Philippines from Category 1 to Category 2 only a few months after PAL committed to acquiring the six B777-300ERs.

As CAPA reported in Jul-2011, PAL needs the B777-300ERs to improve its product to the US and eliminate the need for a fuel stop on westbound flights. PAL now uses its ageing B747-400 fleet to operate daily flights to Los Angeles and San Francisco. PAL uses A340-300s to operate three weekly flights to Honolulu and four weekly Manila-Vancouver-Las Vegas flights (PAL has daily flights to Vancouver but can only use B777-300ERs on the three weekly flights that do not continue to Las Vegas because PAL is unable to operate B777-300ERs to the US).

PAL took the unusual step earlier this year to pay for a US consulting firm to help Philippine civil aviation authorities raise their safety standards in an attempt to meet Category 1 requirements. Mr Bautista now says he is hopeful of an upgrade to Category 1 by November, when PAL takes its fourth B777-300ER.

PAL banking on using B777-300ERs on US flights from 4Q2012

Mr Bautista says the upgrade to Category 1 is not necessary before 4Q2012 because PAL plans to deploy its third B777-300ER on flights to Australia and Japan. If the Philippines remains in Category 2 in Nov-2012, Mr Bautista says PAL will have to use its fourth B777-300ER on Asian routes. Clearly this is not an ideal situation as the B777-300ERs are best suited for long-haul routes and are significantly more efficient than the A340s and B747s PAL now uses for its US routes. PAL has experimented with having its B777-300ERs serve Australia, but reverted back to old schedules after finding the capacity increase over A330s, its previous equipment, was too much and the market wanted daily flights.

PAL is also banking on expanding its US network following the delivery of its fifth and sixth B777-300ER in 2013. But this is similarly contingent on Philippines returns to Category 1. As PAL faces increasing competition from LCCs domestically and in the regional international market, expansion of the carrier’s typically profitable US operation could be critical to its long-term term survival.

North American routes now account for 20% of PAL's weekly seats and 45% of its weekly ASKs.
PAL international capacity (ASKs) by region, for week of Nov-7-2011 to Nov-13-2011

PAL looks to use AirPhil to better compete with Cebu on regional international flights

Within Asia, PAL will continue to expand in an effort to maintain its market share on regional international routes. Mr Bautista says PAL believes there is room for AirPhil, which now has a very small international operation, to expand in the regional international market without risk of cannibalizing PAL’s own business. He says the idea is for AirPhil to focus on the lower end of the market, providing new competition for Cebu Pacific, while PAL focuses on the full-service sector.

The regional international LCC market is now dominated by PAL rival Cebu Pacific and to a lesser extent foreign LCCs. It is also being targeted by new local LCCs including Philippine AirAsia, which is planning to launch services in early 2012, and SEAir’s Tiger-branded A319 operation.

International expansion at AirPhil will also help AirPhil increase utilization of its A320 fleet, thereby reducing costs. Cebu Pacific currently enjoys a large cost advantage over the country’s smaller LCCs.

AirPhil now follows a hybrid model but Mr Bautista expects the carrier will start pursuing a purer LCC model as it strives to lower its costs. AirPhil’s codeshare with PAL will continue but Mr Bautista points out that it is a one-way codeshare with PAL only selling tickets on AirPhil’s turboprop flights. AirPhil took over PAL’s turboprop operation in 2009, when the carrier was still known as Air Philippines and following more a legacy carrier model.

AirPhil’s fleet of Dash-8 turboprops are used to serve airfields which cannot accommodate jets, including Caticlan – the gateway to popular tourist destination Boracay island. The codeshare service to Boracay and some other tourist islands is important for PAL to maintain connections to its international network, particularly for high end leisure passengers.

Mr Bautista said during the CEO panel discussion at last week’s AAPA assembly that the “low cost market will continue grow in Asia-Pacific, especially the Philippines”. The budget market in the Philippines remains relatively untapped because only 10% of the population currently flies.

Low costs are needed for PAL to fend off increasing competition from LCCs 

As most passengers in the Philippines are budget-conscious and competition with LCCs is already fierce, PAL also has been striving to lower its cost structure. The outsourcing of non-core functions is an important step for PAL as it significantly reduces headcount, which has historically been unnecessarily high.

Mr Bautista said during last week's assembly that the continuing protests from ground worker unions is no longer having a significant financial impact on PAL, which is expected to report late this month its earnings for the quarter ending 30-Sep-2011. “What’s really important is service that is provided has been downgraded in terms of catering. We are asking our passengers for their understanding,” Mr Bautista says.
PAL has been forced to use alternative vendors, resulting in a decreased level of service on flights departing Manila, as it still does not have access to its catering facility. PAL is now working with government authorities to try to remove the striking employees so it can regain access to its catering facility.

Mr Bautista pointed out that PAL’s plan to outsource non-core functions was approved twice by the country’s labor secretary and twice by president. “The problem is even with government approvals there are many groups and institutions that are against outsourcing,” Mr Bautista says. “It’s unfortunate we don’t get much support from our authorities.”

OV-10 crashes in Zamboanga

Pilots safely bailed
By Roel Pareño and Jaime Laude

November 10, 2011

A Philippine Air Force (PAF) OV-10 bomber plane crashed yesterday morning inside Edwin Andrews Airbase in Zamboanga after coming from a test flight, according to a military official.

Strong gusty winds caused the plane to flop. About 12 OV-10 units remains in service with the Philippine Air Force.

Maj. Romel Miguel, public affairs officer of the 3rd Air Division here, said the two test pilots of the ill-fated OV-10 bronco bomber plane survived by bailing out seconds before the crash. The two pilots, Maj. David Trajano and Lt. Adonis Buscas, suffered slight injuries and were declared safe.

Miguel said the OV-10 plane, which was being used in the “all-out justice” operations of the military against lawless elements, crashed about 9:50 a.m. near the hangar inside the airbase.

Miguel said the bomber plane was on a routine test flight mission when its right engine conked out and failed to restart prompting the pilots to return for an emergency landing.

“The two pilots successfully ejected and luckily were safe,” Miguel said, adding that the ill-fated bomber plane was not armed with bombs since it was only on a test flight.

Witnesses on the ground said they saw the plane swerve on both sides as it approached the airstrip of runway 27 to land.

“The plane was coming in like swerving and God, its propeller on the right side was not functioning. Then suddenly we saw the pilots on parachutes barely made it seconds before a loud explosion occurred,” said traffic police officer SPO1 Ignacio Lozano Jr., who was manning the traffic flow at the crossing of Governor Camins and Sta. Maria road near the air base.
The plane was totally wrecked but did not bring damage to the nearby building structures where it crashed.
Miguel said Air Force chief Lt. Gen. Oscar Rabena immediately directed the 3rd Air Division to conduct the investigation to determine the cause of the accident.

The order also came with the grounding of the rest of the OV-10 bomber planes in the country.
The 3rd Air Division has been using at least 6 OV-10 bomber planes in support of the Western Mindanao Command’s (Westmincom) recent operations in Payao, Zamboanga Sibugay, and Sulu air strikes.

The military said the grounding of the bomber planes might temporarily affect their operations if air support will be needed.

World's Most Hated Airport

The smelliest toilets, the longest queues, the rudest staff ... sometimes air rage feels justified

Manila fairly lands Five
November 9, 2011

There’s a special form of loathing reserved for a building that forces you to remove your shoes, wait in line, get groped, shell out for bad food and dash in a panic to an arbitrarily changed gate before canceling your flight.

But let’s be clear. The most hated airports in the world are not the worst airports in the world.
For that you’ll have to consult Lonely Planet or fly to destinations the majority of us have little need to pin on a map or pronounce properly.

What follow are 10 majorly despised international hubs (or hopefuls) that, while they may have a few staunch fans, and some have even won awards, have all inspired enough fury, flak and “never again” air-rage to merit a place on this list.

10. São Paulo-Guarulhos International, São Paulo, Brazil

Whether it's 9 a.m. or 9 p.m. this airport experiences round-the-clock rush hour.

Why is this place on our list after scoring third best airport in South America at the 2011 World Airport Awards?

Because, shockingly enough, it turns out that corporate medal ceremonies aren’t always in sync with what people are thinking when they're standing in two-hour immigration lines, suffering routinely unannounced gate changes and paying through the teeth for a stale Brazilian cheese roll and beer inside an understaffed and over-aged aviation facility.

In a country where flight delays (departing or arriving) are just part of the deal, some recent numbers would give pause to the most unflappable traveler at Brazil’s largest airport.

Just 41 percent of all flights leave on time. Only 59 percent of flights arrive on schedule, according to Forbes.

São Paulo-Guarulhos has announced plans to add runways and terminals -- what airport hasn’t? -- but with nearly 30 million passengers traipsing through every year (the figure has reportedly doubled in under a decade) the urgency is palpable and, sadly enough, unsolved by upping prices at musty duty-free shops.

But does this really constitute bronze medal status? When the best unofficial advice for surviving Brazil’s pin-up airport is to try and learn a little Portuguese and not lose your temper, something’s gotta give.

9. Perth Airport, Perth, Australia

worst airports
Kick a dog while it's down: The Qantas strike didn't help PER's reputation.

If there’s one thing Australians love, it’s hating their airports. But while the big guns in Sydney, Melbourne and also-rans in Darwin, Cairns and Hobart get routinely lambasted for various inefficiencies and rip-off tactics, passengers in Western Australia have a special place in their spleens for Perth.

“The only advantage over some other airports is the lack of nearby combat,” notes one of several miffed passengers on airportquality.com.

With a reviled pair of domestic terminals (home of two-hour taxi-line queues, atrocious check-in lines, overpopulated gates and meager lounges) and a slightly more palatable international terminal five kilometers away, Perth’s brittle facilities can be overwhelmed just by a trio of aircraft arriving within 20 minutes of each other.

Now that an ambitious “billion-dollar” redevelopment project has been significantly scaled back, who would ever want to leave Changi for this place?

8. Tribhuvan International, Kathmandu, Nepal

Don't look the officers -- or the dogs -- in the eye.

For a small airport in a pretty country, Tribhuvan has it all: the interminable weather delays of Boston Logan, the shoddy restroom maintenance of a Glasgow sports bar, the departure board sparsity of McMurdo Airfield and the chronic chaos of a kids' soccer match.

Some airport improvements have been underway for the Visit Nepal 2011 tourism campaign, including things most passengers don’t much care about (e.g., the new helicopter base).
The most serious beefs with Nepal’s only international airport revolve around its primitive yet officious check-in procedure, starring a roulette wheel of underpaid security agents.

“Departure is an endless game of body searches and silly questions,” notes one passenger.
“Those who didn’t have their e-tickets printed out had to argue their way in,” says another, who was checked seven times and scolded for not having a baggage tag on a carry-on before eventually boarding.

Never mind. The city’s markets and surrounding mountains are lovely.

7. John F. Kennedy International, New York, United States

Fans flooded the airport to welcome the 1964 British Invasion, but it seems they never left.

You’d think it would be one of the greatest humiliations any major airport would never allow itself to live down -- getting routinely abandoned by fed-up folks opting to fly out of Newark (Newark!) instead, where at least the ground staff cop less attitude and fewer people outside are pretending to be cab drivers.

But, nah, JFK really couldn’t really care less.

Every year, more than 21 million passengers stumble through worn, mid-century terminals that peaked when The Beatles arrived in the United States and rooftop parking was all the rage; JFK proudly remains the world’s busiest international air gateway.

So if you’re not into a dim, surly, unbearably congested airport reeking with attitude and unapologetically long immigration lines -- good riddance.

“JFK had a piece of my luggage sitting in a little detention room for bags -- for over a year,” notes one passenger. “No one noticed it was there, until finally an observant Air France employee wondered what the dusty little green bag in the corner was.”

6. Jomo Kenyatta International, Nairobi, Kenya

Can't be disappointed if you're not expecting much.

“As African airports go, it’s not that bad -- but as an international hub, it may be one of the worst out there.”

This is the common refrain among travelers through JKIA, who either don’t have the heart or the expectations to give this dated aviation facility the kind of pounding reserved for the JFKs and Charles de Gaulles of the world.

Saddled with a 1958 blueprint designed for 2.5 million passengers, JKIA receives close to twice that many. Hence the airport’s 2005, Three Phase, US$100 million expansion project which has seen long delays (something about the rain) and has been spinning its tires somewhere in Phase Two for the last few years.

For now, that means business as usual: cramped spaces; long lines; inadequate seating; frequent power outages; tiny washrooms hiding up several flights of stairs; shabby duty free shops; overpriced food outlets; and business class lounges worthy of a shelter in mid-city Los Angeles.

Sure, it’s a breeze compared to Lagos. But it could be so much better. The confusing result: grateful disappointment?

5. Ninoy Aquino International, Manila, Philippines

Ninoy Aquino International Airport
Wear a helmet -- the first collapsed ceiling in 2006 at Ninoy Aquino International Airport.

Beleaguered by ground crew strikes, unkempt conditions, soup kitchen-style lines that feed into more lines and an overall sense of futility, NAIA brings the term “Stuck in the 1970s” to a new level.
At Terminal 1 all non-Philippine Airlines remain crammed despite serious overcapacity issues and a new and underused Terminal 3 is occupied by a few minor carriers.

A rash of bad press this year (including a “Worst in the World” ribbon from Sleeping in Airports) was capped by a collapsed ceiling in T1, a paralyzing ground service strike at T2, and the usual charges of tampered luggage, filthy restrooms, seat shortages at gates, re-sealed water bottles sold in retail shops and an Amazing Race-style check-in routine spiked with bureaucracy, broken escalators, lengthy Dot Matrix passenger lists and creative airport departure fees.

4. Toncontín International, Tegucigalpa, Honduras

worst airports
Over-priced corn chips will be the least of your worries.

When do the most common airport gripes about inefficiency, uncomfortable gate chairs, dirty floors and lousy dining options suddenly become irrelevant? When you’re preoccupied about whether your 757 will actually be able to stop before the runway does.
Nestled in a bowl-shaped valley at 957 meters above sea level, Toncontín’s notoriously stubby, mountain-cloaked landing strip was recently lengthened another 300 meters following a fatal TACA aircraft overshoot in 2008.

Not enough though to avoid being named the “second most dangerous airport in the world” by the History Channel.

Nepal’s hair-raising Tenzing-Hillary Airport in the Himalayas is the top seed, but receives fewer gripes from its thrill-seeking Everest-bound clientele.

3. London Heathrow, London, England

bad airports
"You'll fly through departures -- at the speed of a penguin."

Depending on which of Heathrow’s five terminals one is funneled through, the average experience at the world’s third-busiest airport ranges from mildly tedious to "Fawlty Towers" ridiculous. 
With its rash of -- as they were politely called -- “teething problems” in bright and airy T5 (remember that riotous grand opening with 34 canceled flights?) and nicely matured problems in Ts 1, 2 and 3, the issues passengers are beset with run the gamut.
Parking messes. Busted baggage carousels. Deadlocked security lines. Long walks (or, more commonly, runs) between gates to a frenzied soundtrack of “last call” announcements. Realizations that getting out of Heathrow took longer than actually flying here from Madrid.
In the airport “where the world changes planes,” it all boils down to a chronic inability to cope with this many people. Plans for a sixth terminal should help sever even more nerves.

2. Los Angeles International Airport, Los Angeles, United States

It's not even a good spot for celebrity sightings.

If the world’s seventh-busiest flight hub was an old ballpark resting on the stale reputation of its Dodger Dogs and that great 1959 series, LAX might have some endearment value.
But it’s an airport -- a dramatically undersized and moribund one with the architectural élan of a 1960s correctional facility and several publicized concerns about how its 1,700 takeoffs and landings a day can be sustained in a facility a fifth the size of healthier cousins like Dallas/Fort Worth.

The unsupportive donut-shaped design -- it’s been called “eight terminals connected by a traffic jam” -- makes dashing between airlines feel like a diesel-scented cardio test.

Plunked in the middle is the airport’s landmark Jetsons-style restaurant and only mentionable amenity, Encounter, but how does one actually get inside this place -- at least before being nailed for a petty traffic violation by some of the most ticket-hungry airport cops west of the Mississippi?

1. Paris-Charles de Gaulle, Paris, France

Don't expect to make friends during a storm closure.

“A great country worthy of the name,” President Charles de Gaulle once opined, “does not have any friends.” 

True or not, it’s this sort of attitude that has helped CDG become the most maligned major airport on earth. What’s fueling it?

Grimy washrooms with missing toilet seats don’t help. Nor do broken scanning machines and an overall lack of signage, gate information screens and Paris-worthy bars, restaurants or cafés.

The baffling circular layout is worsened by warrens of tunnel-like structures, dismissive staff and seething travelers waiting forever in the wrong queue.

The worst part may be this airport’s aura of indifference to it all. “Waiting for a connection here,” notes one commuter, “is like being in custody.”

If you’re actually staying in Paris, you may be okay. If you have the gall to just be passing through between Malaga and Montreal, you can cut the spite of this place with a cheese knife.

Flying Elsewhere to Nowhere

The Philippines Air Asia that can't fly domestic
November 2, 2011

AirAsia Philippines CEO Marianne Hontiveros (third from left) stands in front of the brand new Airbus A320 after it arrived at the Diosdado Macapagal International Airport in Clark, Pampanga, on August 15, 2011. Photo Courtesy of AirAsia Philippines

Asia's biggest low cost carrier AirAsia may have arrived and call the Philippines its home, but until it gets regulatory approval to fly domestic flights, its dream of challenging the dominance of Cebu Pacific remains to be but a dream.

And from the way things are going, its hurdle of being called a truly Philippine-based carrier remains in limbo as it wrestle objections from a truly Philippine-based airlines.

“Hopefully we can start operations by December, but it would be great if all the relevant authorities can give us approval to operate by November 1,”  says Zaman Ahmad, AirAsia customer experience and technology officer.

Air Asia Philippines operation in the country has been delayed thrice already at it follows the footsteps of Tiger Airways desire to make the country its home and fly local but suffered spate of rejections from belligerent residents, Philippine Airlines,Cebu Pacific, Air Philippines and Zest Air.

The airline maintains that it is Filipino. AirAsia Philippines is 60% owned by Marianne Hontiveros, Antonio Cojuangco Jr. and Michael Romero, while the rest is owned by AirAsia Berhad, controlled by Malaysian mogul Tony Fernandez, through its wholly-owned subsidiary AirAsia International Inc.  

AirAsia Philippines’ first Airbus 320 aircraft, has been languishing at  Clark International Airport in Pampanga since August 15 together with another Airbus aircraft of Tiger Airways-Seair alliance. Another aircraft is expected to join Air Asia Philippines on November 8 sans revenue and the heat is already being felt by the million dollars in loses even before commercial operations have begun. Yet, there are still plans for expansion.

“Our plan is to bring 4 new airbus aircraft by 2012” says Marianne Hontiveros, AirAsia Phils. President.

The plan was to use the first aircraft to fly to Singapore, Macau, and Hong Kong, but because of want of regulatory approval from those countries the airline was forced to delay its inaugural flights. The second Airbus is expected to ply the routes to Bangkok, and Incheon, but Kalibo and Puerto Princesa may have to wait longer or never.  

The Civil Aeronautics Board (CAB) has so far recommended giving flight entitlements to AirAsia Philippines and Seair to fly to several points in Malaysia.  

Last Thursday, the CAB recommended that AirAsia Philippines can mount Clark-Kuala Lumpur flights from the 1,260-weekly seat entitlements assigned to it. Meanwhile,Seair's application for a total of 5,400 weekly seat entitlements to Malaysia was also approved by the CAB.

The CAB recommended Seair be given 2,520 seats per week to mount flights between Clark and Kuala Lumpur; 1,260-weekly seats to be utilized for flights between Clark and Kota Kinabalu; 540 seats per week to Kuching; another 540 seats to Penang; and the same number of seats to Langkawi.

 “We're targeting to fly about a million passengers out of AirAsia Philippines in the first year both from domestic and international operations,” Ahmad said.

With only one destination for Air Asia, that target may have to wait further too.

But Hontiveros is optimistic about the airline's setback as it strive hard to be disassociated with Malaysia. AirAsia is known primarily as a Malaysian brand, although it has local units in Indonesia, Thailand and the Philippines.

The Airline is looking to change its image from a “born in Malaysia” brand to “ASEAN’s airline” as it expands to other Association of Southeast Asian Nations (ASEAN) member-countries. 

“AirAsia is taking the bold step of ridding ourselves of the brand that Air Asia is Malaysian. We want to become an ASEAN entity,” Ahmad said.

To further its plans, the airline this year opened an AirAsia ASEAN office in Jakarta, where the ASEAN Secretariat is based. ASEAN includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

“We’re pushing for ‘One ASEAN.’ It would be great as a company we have resources in Indonesia, Thailand and Philippines and other ASEAN countries, and we can move resources around, and not be restricted by the different aviation authorities… Today that’s not possible, but in the future that’s what we want,” Ahmad said.- with reports from ABS-CBN