As PAL intends to build new airport
August 31, 2012
Philippine Airlines (PAL) is set to surrender most domestic operations to its low cost subsidiary in a major relaunch to be announce soon, says airline president Ramon Ang after the company’s stockholders’ meeting yesterday at the Century Park Hotel.
Airphil Express will be be re-branded to carry the airlines name. “It will be called PAL Express. There won’t be Airphil Express anymore,” said Ang at the press conference.
PAL Express will be flying all the routes of PAL effective October 29, except seven major points in the country. Dubbed as "Project winter", PAL will fly only to Cebu, Davao, Bacolod, Iloilo, Kalibo, Laoag, and General Santos from Manila.
He said the board has approved the rebranding of Airphil Express to PAL Express in consonance to the investment agreement with conglomerate San Miguel Corporation (SMC) which Ang heads.
The Airphil Express brand is owned by Air Philippines Corp., which used to be 99% owned by the Lucio Tan group before substantial shares were brought by San Miguel in April, while PAL Express is owned by Philippine Airlines. Both airlines used to be controlled by PAL Holdings of Lucio Tan before the entry of SMC. San Miguel paid $500 million for a management control 40-percent stake in PAL and 49-percent stake in Air Philippines.
The Board Resolution is awaiting regulatory approval from the Securities and Exchange Commission (SEC).
PAL AIRPORTMeanwhile, the flag carrier has dropped its plans to move to Clark International Airport due to infrastructure inadequacies which when build now would be ready only in 2030 at the earliest possible time, thereby limiting the growth potential not only of the airline but to the entire aviation industry in an island archipelago with 105 million people.
To address the government shortfall, SMC contemplates plan to put up a new international airport in Bulacan faster than how Clark is being built to accommodate its massive fleet of 100 planes by 2020. The proposal will be submitted to the President by the first quarter of next year for regulatory approval.
The airline believes that relocating to another airport outside Clark International Airport, funded by them is a better option for the company' s growth as Clark suffers from arrested development brought by project delays and cancellations.
Ang said that their envisioned international airport would be situated in a 2,000-hectare property capable of four parallel runways with maximum capacity of 100 million passengers housed in the most modern designed terminal following the footprints of Incheon Airport in South Korea, voted as the best International airport in the world by Airports Council International (ACI).
It is projected to be finished within 3 years from regulatory approval and should be ready by 2016 with two initial runways 4K in length capable of 62 landings and take-off every hour, or 31 landings or take-off at either runways. The terminal is expected to accommodate 30 million PAL passengers.
"The proposed international airports could handle 1,500 events per day putting the Philippines at par with the airports in Sydney, Australia as well as Heathrow in London." says Ang.
PAL said that NAIA will not be a better place by 2016 if the growth projections at the premiere airport continues. The airline exclusively occupies Terminal 2 which is already suffering from over capacity.
Ang clarified that the proposed international airport would co-exist with Clark and Ninoy Aquino International Airport (NAIA), saying it will be up to Department of Transportation and Communications (DOTC) how they make use of Clark after their proposal is approved.
Ang revealed that the company would spend US1 billion to put up just the airport alone with additional equity infusion of $500 million to be taken from existing shareholders which would be enough to raise the financial requirement of the project.
Ang hinted the financing of the airport to be funded by soft loan from the Export-Import Bank of Korea with Korean contractors preparing detailed engineering and building of the proposed international airport.
San Miguel Corporation operates Caticlan Airport, the country's busiest domestic airport by traffic movements. It is also the Philippines largest conglomerate with more than US$600 million in net revenues.