Airphil Express to Take Over PAL Domestic

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).


Meanwhile, 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.


  1. In Bulacan? Why not Sangley Point in Cavite City, It already has an airport used by the Americans,and just extend the Cavitex there.

  2. Sangley has one runway and is too short for any airline sized jet.

  3. RSA passionate on PAL airport

    Part I
    “Mark this day in your diary… Sept. 20, 2012… put down there that on this day Ramon Ang told you by this time next year, a new international airport will start to rise.”

    That was how San Miguel Big Boss Ramon Ang responded to my question about how serious he is in putting up a new international airport. Over lunch at his office with PhilStar Columnist Cito Beltran, RSA still won’t tell us where exactly his new airport will be. He still has to sign up a few more hectares of land for an airport that promises to be even larger than the current Clark International.

    RSA told us that every Filipino will be proud of this new airport. It will have four runways, two exclusively for take offs and two only for landings. The terminal building will be state of the art in ecologically responsible architecture. There will be solar panels and will be so designed to minimize power consumption for air conditioning.

    The latest in aviation navigation facilities will be there… the same stuff the government has been hesitating to acquire for NAIA all these years. It will be connected to the Bonifacio and Makati business districts by a 10 lane expressway that will cut travel time to just a maximum of 20 minutes. He could put an express train for another billion dollars, he said, but he doesn’t think it is necessary.


  4. Part II
    Contrary to earlier reports, RSA said the new airport will serve not just PAL but all other international and domestic carriers including arch rival Cebu Pacific. Once it is up, he promised, Filipinos will no longer feel embarrassed with foreign visitors because the days of having the world’s worse airport will be over.

    How would he fund it? That’s not a problem, he insists. He has sounded off a number of sovereign wealth funds in the region and they are just looking for a project such as this. He also promises to deliver it within three years… within the term of P-Noy.

    But what about government permits? Wouldn’t that slow him down? I told him that the current CAAP chief isn’t too hot about the idea of a private sector led major airport too close to Clark and NAIA.

    RSA doesn’t think government will be in the way. For one thing, the local governments of the town and province will be supportive. Environmental clearance shouldn’t be too difficult, he said, with the panel of experts working on the project. He believes even the President will be very supportive because this dream airport will not entail any government money and will be inaugurated within his watch.

    So, I asked him again: do you really think you can pull this off? And the answer is the same, he has no doubts he can pull it off. He explains that he is a dreamer. He doesn’t dwell on problems of the past but moves on to a better world. And he makes it happen.

    “No one believed I could pull off what I have so far accomplished but I did,” he declared. He said he doesn’t let his critics and naysayers bog him down. He just goes on to prove them wrong.

    I don’t honestly know if RSA can pull off this big project and I have my doubts. But I certainly hope he would succeed. Given that government has proven itself unable to do anything about NAIA and even about Clark all these years, I am ready to support any private sector effort to get the job done. We have nothing to lose anyway, since RSA will not be risking government money.

    I hope the President, the new DOTC leadership and private sector leaders will help get this dream airport realized. Maybe just this once, we can hold back on the crab mentality.

    And the timing is right… we are flavor of the month among investors or so they say. If the sovereign wealth funds see we have a serious project that is supported by everyone, raising the money should be a breeze.

    This may be our last chance to have a respectable airport. If we are going to depend on government, it isn’t going to happen. DOTC can’t even open up Terminal 3 to full use after over a decade of it being a white elephant.