NAIA Cannot Support 100 New Planes

September 30, 2012

Philippine Airlines is looking beyond the borders of Ninoy Aquino International Airport (NAIA) to accommodates its massive fleet on order but the company said it would not be in Clark Airport saying the airport is too far and without support services.

If the government is not building it for them, they will need to build a new massive airport next year to support its growth, and that new airport is gaining favorable grounds from International Air Transport Association (IATA), presently headed by Cathay Pacific Airways CEO Tony Tyler who went and meet the President of the Philippines Benigno Aquino III last week in support of new airport in Manila.

The government is pursuing the development of Clark International Airport to shift traffic away from NAIA in Manila but suffers major infrastructure bottleneck making the viability of the airport poor from IATA perspective.

IATA on Wednesday said the Philippines needs an airport hub in Manila and not in Clark which is 100 kilometers away from Manila with no affordable and efficient transport link. 

Tyler said that even if the government constructed a high-speed railway system to transport passengers from the metropolis all the way to Clark it would still be not enough, and suggested that the government spend the money elsewhere, possibly for an alternative airport within Manila. 

The IATA Chairman urge President Aquino to consider proposal of making a new hub airport for Manila a priority. 

"Building a secondary airport or increasingly splitting the traffic with Clark in its current form will not be sufficient to put the Philippines on the same playing field as its much more competitive neighbors,” said Tyler.

He said the Philippines deserves a better airport infrastructure because existing airports in Manila are operating near their capacity and there does not seem to be any possibility for significant expansion at the current site.

NAIA is projected to operate in excess capacity by 2014 when new aircraft orders from domestic carriers PAL, Airphil Express, Cebu Pacific, Zest Air, and Seair starts arriving. Philippine carriers has more than 100 aircraft on orders from airplane manufacturers.

"It’s time for change," Tyler said in a briefing telling that NAIA cannot support growth after that period.

IATA lists airlines calling NAIA as ANA, Asiana, Continental Micronesia, Delta, Japan Airlines, Korean Air, Malaysia, PAL, Royal Brunei, Qantas, Singapore, and Thai Airways.

Ramon S. Ang, President and Chief Operating Officer of IATA member Philippine Airlines (PAL) said recently that the airport planned for construction next year is not for PAL and its subsidiary alone, hinting that other IATA member airlines would relocate too to the new facility which is scheduled for opening in 2015.

Ang said he already told the shareholders of LT Group and San Miguel Corporation that they would have to infuse equity of between $1 billion and $2 billion for an airport project that cost around US$ 6 billion to be funded from Sovereign Wealth loans of other countries, notably South Korea, Japan and the EU. 

The airport will be built by a Korean Company which will have two initial runways, and a modern terminal building with initial capacity of 30 million. It could handle 1,500 events (landing and take-off) per day putting the Philippines at par with the airports in Sydney, Australia as well as Heathrow in London. The proposed airport would be accessible via elevated six-lane highways and would also feature hotels, malls, and other facilities.

San Miguel Corporation earlier disclosed to Philippine Stock Exchange (PSE) that “The company and the Lucio Tan Group are jointly evaluating the possibility of constructing an airport which will serve as the country’s main gateway.”

Ang said he would push through with the presentation of the proposed international airport to President Aquino for approval in January.

Decoding PAL's new A330 Orders

September 29, 2012

Philippine Airlines (PAL) has announced yesterday at the sidelines of PAL Holdings Annual Stockholders Meeting that it exercised options to buy 10 Airbus A330-300 aircraft for $2.5 billion, with deliveries planned in 2013-2014.

The listed Price of A330-300 as of August 2012 is US$ 231 Million according to Airbus. Airlines usually settle around US$200-230 million for the aircraft orders. Garuda recently ordered 11 A330's with a price tag of US$ 2.54 billion, making each unit cost US$ 227 million. The eleven A330-300 airplanes will also join the Garuda Indonesia fleet starting 2013 until 2017. Malaysia Airlines (MAS) ordered 25 aircraft in 2009 with delivery schedule from 2011 to 2016 valued at US$ 5 billion, or US$ 200 million each.

So why the huge discrepancy in the price tag?

Reports has it that PAL orders for A330 was for the HGW variant. The upcoming variant to be introduce by Airbus is 240T. And this variant is only available in the summer of 2015. Malaysia Airlines (MAS) is the launch customer for the 240-tonne A330 aircraft variant.

The current HGW variant is the 235T coming off Toulouse plant since 2010. This is the same variant ordered by Hawaiian, Garuda, Malaysia and Singapore Airlines, as well as that of Cebu Pacific. Other users are Iberia, Swiss International Air Lines, China Southern, Air China and General Electric Capital Aviation Services (GECAS).

PAL A330 is the original variant ordered in 1992 with 212T weight. As compared to the latest iteration, that is a whooping 23 ton increase as compared to the 2010 model. More weight, more range, more capacity. Its the reason why Hawaiian A330 can fly Manila without penalty and why PAL A330 can't.

With the price tag above, PAL A330 orders could not be associated with the 235T plane. So it must be the 240T variant.

The 240T A330-300 has 400nm extra range, that is 5,950nm (11,020km) – with 300 passengers and carry nearly five tonnes more payload than today’s 235 tonne aircraft according to Airbus. Compared with the original 212T A330-300 in 1992, the 240T A330-300 can fly 2,000nm (3,700km) further. This plane can reach Manila-Amsterdam or Manila-Vancouver without need to stop going back home.

PAL said they will receive eight A330 next year. But the A330 variant available next year is only the 235T. 

What gives?

Here is the likely explanation. When PAL ordered the A330 and A340 in 1992, they all received the leased version from Airbus in 1996 until actual delivery was made in 1997. There was an A330-200 and A340-200 variant in the PAL fleet in 1996 but the airline never ordered those. When the orders arrived later, one by one those planes went to other operators. Such arrangement was discussed in the book "Airbus: The Complete Story" by Bill Gunston.

From that business arrangements, it can be safely presumed that PAL entered soft lease arrangement with the aircraft manufacturer, leasing the earlier 235T version while waiting the line for the newer variant available in 2015. With that scenario it makes perfect sense. Coincidentally, the 240T variant hovers around US$250 million tag.

The PAL lease arrangements has precedence.

Singapore Airlines (SIA) leased 19 Airbus A330-300s from Airbus to replace its Boeing 777-200 and -200ER aircraft. It has 15 additional examples to be delivered between 2013 and 2015, all 235T variant. All orders has a lease period of five to six years with options for extension.

SIA, Garuda and MAS engineers must not be wrong about the planes merit on medium haul. Airbus 235T plane seating 300 pax burns 16% less fuel per seat than a 302-seat 777-200ER on a 1,800nm mission. Good enough for services to South Asia, China, North Asia, Australia and Middle East markets.

Engine Choice, Trent?

Another offered explanation is the incorporation of engines cost to the purchase price. Philippine Airlines did not announced choice of engines to power the new A330-300 but an insider from their engineering division told of a shift from engine supplier.

The old A330 were all powered by General Electric CF6-80E1 engines, a derivative from successful CF6 engine programme of GE Aviation intended for the Airbus A330.  Thus, the extension 301 (0-GE, 1-CFM, 2-PW, 3-IAE, 4-RR, 6-EA)

But taking cue on the success of competing engine maker, PAL is prepared to jump ship to an engine supplier taking hold of the A330 Market.

Rolls-Royce's Trent 700 has established itself as the engine of choice of major Asia Pacific airlines operating the A330 with over 57 per cent market share since it entered service in 1995. It is also the market leader on future engine orders on the aircraft accounting close to three quarters of the total A330 sales. It powers the A330 of Cathay Pacific, Singapore Airlines, and Garuda Indonesia Airlines.


Recently, Garuda awarded Rolls-Royce US$ 200 million for Trent 700 engines to power 11 Airbus A330 aircraft in April. The contract includes long-term TotalCare® service support, making the price of the two engines at US$ 25 million for each plane. Garuda airline will have 24 A330 aircraft powered by Trent 700 engines by 2015. Similarly, PAL will have 20 A330-300 by 2017. It is possible that the remaining cost covers the engines that powers the aircraft.

Cebu Pacific awarded US$280 million to Rolls-Royce for Trent 700 engines to power eight Airbus A330 aircraft together with long-term TotalCare® service support.

"The Trent 700 has become the engine of choice for A330 operators, selected for around 75% of future engine orders on the A330." says Peter Turner, Rolls-Royce's vice-president of civil aerospace. Rolls-Royce did not confirm nor deny the engine of choice of PAL's new A330. Perhaps waiting for Ramon Ang's announcement.

Cathay Pacific Engineering Director Christopher Gibbs has been very impressed with the performance of Trent 700. Cathay Pacific is the largest operator of A330 aircraft with 48 frames flying for the group and 14 on firm orders.


Emirsyah Satar, Chief Executive Officer of Garuda Indonesia Airlines is also impressed with the Trent 700’s performance in technical and economic terms.

Nick Devall, Rolls-Royce, Chief Commercial Officer – Civil Aerospace, said: "We are delighted that Garuda Indonesia Airlines, a valued customer, has again put its trust in our industry-leading technology and support services as part of its plans for continued growth. This order underscores the market-leading position of the Trent 700."


The Trent 700 improvement programme will be finalised this year, with enhanced engines expected to enter service in 2015. Improvements will also be made available for retrofit to the current engine fleet. The enhanced Trent 700 will complement the improvements to the A330 aircraft that Airbus has announced for delivery in 2015.
 
As it now stands, The Airbus A330-300 is the most fuel efficient aircraft on medium-haul. It is the best plane for PAL to Japan, Korea, China, Australia, New Zealand, Hawaii, India and the Middle East.

PAL Express A330

Ramon Ang rebranded  Airphil Express to become once again PAL Express. Both units were the budget arm of local carrier Philippine Airlines (PAL), with the former being brand name of Air Philippines Corp., used to be 99% owned by the Lucio Tan group before SMC investments, while the latter is owned by the company 92% of which is owned by LT group.

Diversified conglomerate San Miguel Corporation acquired management stake in both PAL and Air Philippines in April.

The PAL President said there won’t be Airphil Express anymore as PAL Board approves change of name of the low cost airline. PAL Express flew intra-regional routes in Visayas and Mindanao, flying secondary routes to smaller airports like Caticlan to bigger airport like Surigao which cannot accommodate mainline PAL jet aircraft. The airline previously ceased operations in March of 2010 and transferred all service to Airphil Express.

Ang said the revived PAL Express will focus on regional and domestic flights while PAL would be aggressively pursuing long-haul flights.

In recent development, PAL surrendered most of its domestic destinations in favor of its low cost subsidiary PAL Express which is planning to go medium haul for Australia, the Middle East, North Asia and South Asia market. 

The PAL unit will compete head on with industry leader Air Asia, Scoot of Singapore Airlines and Cebu Pacific. While Scoot may have some of the triple seven units of Singapore Airlines, PAL Express will be powered initially by the old A330 of PAL which is best for major domestic and intra-asia sectors, while the newer models are intended for service to the Middle East Market.

PAL Express is seen to have a lower operating cost than Cebu Pacific despite maintaining a 15 year old aircraft considering ownership issues in the former while the latter maintains operating leases. 

 

According to Aircraft Value Reference, a UK-based aircraft appraisers,  PAL Express will be using LGW A330-300 hovering close to US$25 million minimum to $90 million maximum as to market value as compared to its current model. Operating the same on lease would cost PAL Express between $280,000 to $900,000 for Cebu Pacific per month, negating operational efficiency of the new aircraft on intra-asian routes.

PAL Orders 10 more A330HGW

September 28, 2012

Philippine Airlines (PAL) announced this afternoon that it has exercised purchase options for ten (10) more Airbus A330-300HGW wide-bodied aircraft worth US$2.5 billion on top of existing orders for 10 A330 made last August.

"We exercised another option for 10 wide-bodied aircraft two weeks ago. The list price is $250 million each. We will be operating more wide-bodied planes in the region because that’s what the market wants," PAL President Ramon S. Ang said at the sidelines of the PAL Holdings stockholders’ meeting.

He said eight of the new orders will be delivered in 2013.

 "We have 3 more Boeing 777 units coming. One in November and the two by next year, so we will have 10 new wide bodies next year." says Ang.

PAL recently bought 54 Airbus planes in August worth $7 billion comprising 34 A321s, 10 A321neos and 10 240t A330-300s. The 10 aircraft deal today is also for the higher-weight A330.

Ang stated that they will start receiving A321s in the second half 2013. These planes will be used for its subsidiary Airphil Express which the company intends to rename as PAL Express that will serve domestic and regional flights. The Neo series will be flown by PAL in 2015.

Ang said the new PAL fleet will save the airline at least 20% off cost on revenues equivalent to some US$300 million per year.

IATA Supports PAL Airport

Clark Not Solution For MNL Congestion

President Aquino converses with International Air Transport Association (IATA) director general and chief executive officer Tony Tyler during a courtesy call at the Music Room in Malacañang Palace on September 27, 2012.            Photo courtesy of Malacañang Photo Bureau.

September 28, 2012

International Air Transport Association (IATA) representing 240 airlines around the world says it wants the Philippine Government to reconsider its plan to develop Clark International Airport as the Philippines' main gateway due to accessibility issues.

IATA Chief Executive Officer and Director General Tony Tyler from Cathay Pacific Airlines, said Clark is not a long-term solution to the country's capacity shortage. 

"If anything, the government’s plan to move the Ninoy Aquino International Airport (Naia) 100 kilometers away from the metropolis would only make traveling more inconvenient to passengers," the Association representative said.

"In my view, Clark is not the solution. It's too far away from Manila and it's in Manila where people want to go" Tyler adds.

"The state of air transport infrastructure in Manila is nothing short of a travesty," he said, adding that this is holding back the development of the Philippines.

"The Philippines also deserves better airport infrastructure. Arriving at Terminal 1 yesterday (September 26) brought a very strong sense of deja-vu. It was being constructed when I worked here in 1979. It has not changed much since that time. For me that brought back some fond memories. But for arriving tourists and business people it is a memorable welcome – and mostly for the wrong reasons," he shared.

"It is a congested and chaotic experience," he said.

He cited the World Economic Forum’s Travel and Tourism Competitiveness Index, which ranks the Philippines 112 out of 139 countries for the quality of its air transport infrastructure.

"The only Asian countries to rank lower are Nepal, Bangladesh and Mongolia," he stressed.

SUGGESTIONS

IATA’s view support recent suggestions by flag carrier Philippine Airlines (PAL), an IATA member, for the construction of a new airport north of Metro Manila.

PAL President Ramon S. Ang earlier said Clark was too far from Manila to be a viable option to replace NAIA.

Tyler said the planned construction of a high-speed rail line that would go to to Clark in 45 minutes would be a costly experiment that would most likely fail. 

Meanwhile, IATA will suggest to the government to make IATA Operational Safety Audit (IOSA) and the IATA Safety Audit for Ground Operations (ISAGO) requirements to operate in the country, without any cost for the government.

Tyler noted IATA airlines' safety performance are 52% better than other airlines.

"IOSA makes a positive difference. IATA does not produce banned lists or rankings," he said,

"In the interim period we need to maximize the potential of the current facilities — both the terminal building and airside. The implementation of the IATA Worldwide Slot Guidelines is now complete. And we are eager to work with the authorities on further solutions."

He also mentioned the upgrade in air traffic control system at NAIA. "We need to unfreeze a major upgrade of the air traffic control system which is badly needed."

He urged the government to prioritize aviation infrastructure. "Failure to make appropriate investments in air transport is leaving the Philippines behind in the Asian economic growth story."

"Look around the region. In the last 15 or so years we have seen whole new airports open in Hong Kong, Nagoya, Seoul, Kuala Lumpur, Shanghai, Guangzhou and Bangkok. These countries place aviation connectivity as a core component of their economic strategy. And they have invested in the infrastructure to support the air transport links. And they are reaping the economic benefits," he said.

"I will be urging the President to personally intervene to sort this out. IATA certainly stands ready and willing to help. IATA has been providing support to improve the safety and efficiency of the air traffic management through observation programs of air traffic control, training for Civil Aviation Authority of the Philippines personnel and development of procedures to improve operational efficiency.  We have also facilitated working groups to identify airport safety hotspots and review ATC procedures," he said.

Saudi Arabia Expands Bilateral

Grants 21 entitlements to Riyadh and Jeddah routes, unlimited to Damman from Clark

September 26, 2012

The Philippines and Saudi Arabia signed new bilateral agreements earlier this week to to increase the number of weekly flights to each country from the current level of 10 to 21 flights.

Both countries amended their air services agreement to allow 21 weekly flights from Manila NAIA to Jeddah/Riyadh route. 

Currently, only Saudia airlines operates Manila on the routes to Damman and Riyadh daily.

The two countries also agreed to allow unlimited flights between Damman in Saudi Arabia and Manila Clark.

Kalayaan 1 travels Brunei

September 23, 2012

Kalayaan 1 Travels to Brunei Darusalam with President Aquino

PAL unveils initial salvo on project winter

September 20, 2012

Philippine Airlines is ending its triangular service to Australia as it shakes its flight schedule between Sydney, Melbourne and Manila starting October 28 to individual direct flights leaving Manila in the evening.

PAL will fly Sydney four weekly nonstop flights and Melbourne three weekly nonstop flights from Manila. All flights will be operated with Boeing 777-300ER aircraft.

Sydney flights will run on Monday, Tuesday, Thursday and Saturday mornings, leaving Sydney at 0945. Meanwhile, Melbourne will see flights on Wednesday, Friday and Sunday mornings, departing Tullamarine Airport at 0950. Both Sydney and Melbourne flights will arrive Manila at 1500.

AirAsia in talks to buy Zest Airways

To gain slots at Manila Airport

September 20, 2012


By Paolo G. Montecillo
Philippine Daily Inquirer

Malaysia’s AirAsia group is making a move to acquire local budget airline Zest Airways in a bid to expand the regional giant’s foothold in the fast-growing Philippine market. 

Highly placed Inquirer sources said that while nothing has been signed as of yet, negotiations were ongoing between AirAsia and the group of former ambassador and juice-drink magnate Alfred Yao.

In an interview on Wednesday, Yao confirmed that the company was in talks with several groups on the possible entry of new investors to help the airline compete in the country’s crowded budget carrier sector.

“We have been approached, but nothing is final yet. There are offers,” he told the Inquirer. Yao declined to confirm talks with the AirAsia group, owned by former music industry executive and Malaysian billionaire Tony Fernandes.

He said Zest Airways would make an appropriate announcement once a deal has been signed.

AirAsia already has a presence in the Philippines through local unit AirAsia Inc., a consortium between Fernandes, who owns 40 percent, and Antonio “Tonyboy” Cojuangco Jr., Michael Romero and Marianne Hontiveros, who own 20 percent each.

Constitutional restrictions bar foreigners from owning more than 40 percent of transportation companies. The same limitation applies to other utility firms, which are businesses considered as “imbued” with public interest.

AirAsia in the Philippines operates flights between the Clark Freeport in Pampanga and domestic routes like Davao, Puerto Princesa and Kalibo. The company also has international flights to Hong Kong, Macau and Kuala Lumpur.

AirAsia Malaysia, meanwhile, operates flights between Kuala Lumpur and the Clark International Airport in Pampanga. AirAsia Malaysia also has flights between the former military base and Kota Kinabalu.

Asked if flag carrier Philippine Airlines (PAL) was approached for a possible investment in Zest Airways, president Ramon S. Ang said, “Late tayo” (we were late).

Local AirAsia officials could not be reached for comment.

Data from the Civil Aeronautics Board (CAB) released last week showed the growth in the country’s international airline sector slowing to 7.34 percent in the first half, slower than the 11 percent booked last year.

Domestic demand, however, remained robust, with passenger traffic within the country growing 13.33 percent in the same six-month period.

New Tacloban Terminal to rise

DBM tenders P800 Million for Tacloban terminal

September 16, 2012

The Department of Budget and Management (DBM) has released funds for the construction of new passenger terminal building at Tacloban airport says Budget Secretary Florencio Abad. 

DBM already earmarked P4.6 billion for key DOTC airport projects including improvements to Ninoy Aquino International Airport Terminal 1 costing  1.64 billion, and another 2 billion for completion of Daraga Airport.

Meanwhile, the Department of Transportation and Communications (DOTC) is bidding out three contracts worth about P24 million for feasibility studies on the proposed Bukidnon airport and the upgrade Surigao and Naga airports.
 

P7.47 million has been earmarked for the feasibility study on the upgrade of the airport in Surigao City and another P7.25 million for a study on the upgrade of the airport in Naga City.

Patrick Tan Takes Over Seair

Zapanta heads subsidiary

September 15, 2012

Low cost carrier South East Asian Airlines (SEAIR) has appointed Patrick Tan as President and Chief Executive Officer of Tiger affiliate Southeast Asia Airlines (SEAIR) replacing Avelino Zapanta who will now head Seair International (SEAIR I), a new company created to serve missionary routes.

“This deal represents a significant step forward for Seair and will allow the airline to continue its tremendous growth and job-creation drive for Filipinos, bringing increased prosperity, highly-skilled jobs and tourism to the country,” newly appointed CEO Patrick Tan said in a statement.

 

He added that Zapanta, who was “instrumental in helping Seair grow into the airline that it has become today, will continue to share his expertise and wealth of experience in his new position as senior adviser to Seair.”

Zapanta has contributed over six years of his career to bring this transaction to a close and secure a proper succession with the appointment Tan as Seair’s new chief.

“Mr. Zapanta will head SEAIR I. He will be the president of Seair I. We believe he could continue to head an airline such as Seair I since he had been with Seair Inc. before,” Greek-American Nikos Gitsis, one of the founders of Seair Inc., said in interview with Businessmirror.

Tiger Airways completed the purchase of a 40-percent stake in Southeast Asian Airlines.

Gitsis and Iren Dornier sold a combined 40-percent stake in Seair Inc. to Singapore’s budget carrier Tiger Airways for $2.5 million but lending the airline $40 million more in investment over a five-year term.

“We started a new airline called Seair International which is owned by me, Dornier, Tomas Lopez and  Geraldine Olivares. We will reposition the airline to serve missionary developmental routes and one of the things we want to do is to relaunch the Batanes flight because we removed that from Seair Inc.,” said Gitsis.

Seair I will take over the leisure routes of Seair Inc. which has now been transformed as a budget carrier. It will fly to destinations where bigger commercial planes could not land using its existing fleet of three Dornier 328s and one LET 410UVP-Es.

Gitsis said Seair I will purchase two more LET 410s next year to be able to serve more flights going to Batanes and Palawan.

“We plan to expand the fleet and position the aircraft to service missionary destinations like inter-Palawan, including Puerto Princesa-El Nido, Busuanga, Puerto Princesa-Taytay, Puerto Princesa-Cuyo, among others.  We will keep Batanes and also focus on Palawan,” added Gitsis.

Seair I is waiting for the issuance of an Air Operator Certificate (AOC) from the Civil Aviation Authority of the Philippines (CAAP) before the relaunch targeted in the last quarter of this year.

“We already secured a CPCN [certificate of public convenience and necessity] from the CAB [Civil Aeronautics Board] and we are just waiting for the CAAP to issue our AOC. We will start operating Seair I by October or November this year. We have pilots and staff good and ready to go. Mr. Zapanta will come back,” said Gitsis.

Tan was previously vice president for commercial affairs before he became Chief Operating Officer, and was responsible for growing SEAIR revenues from PHP 200 million per year to PHP 1 billion per year. He was in charge of SEAIR sales and marketing activities for seven years, overseeing company relations with over 200 travel agents across the globe.

Tan is also a trustee and vice president for external affairs of Boracay Foundation Inc., an influential business group for the conservation of the famous island destination, and serves as a consultant to the board of the Flying Medical Samaritans, and is a sailing member of the Manila Yacht Club. A certified private pilot, he is also a member of the Aircraft Owners and Pilot’s Association (AOPA – Philippines).

Tan earned a Bachelor of Science in Applied Physics from Ateneo de Manila University and a Bachelor of Science in Business Management, Major in Marketing, from De La Salle University.

Seair operates a fleet of two A319's and three A320's as it flies to Bacolod, Cebu, Davao, Iloilo, Puerto Princesa, Tacloban, and Kalibo, while its three turboprop D-328 flies Batanes, Palawan and Caticlan. The airline operates international routes out of Clark to Hong Kong, Singapore, Bangkok, and Kota Kinabalu.

“Our target is to have 10 Airbus fleet within three years or less.” says Tan.-- with reports from Stella Arnaldo and Lenie Lectura.

PPS New Terminal to rise

As Gov't approves $71.6 Million PPS Airport Project

September 13, 2012

The government of the Philippines through Finance Secretary Cesar V. Purisima has signed an agreement with South Korea represented by Chairman and President Yong Hwan Kim of Korea's Export-Import Bank for a $71.6-million loan to construct the new Puerto Princesa airport terminal project under Seoul’s Economic Development Cooperation Fund (EDCF) as Public-Private Partnership (PPP) projects falters in favor of the ODA financing recommended by Transport Secretary Mar Roxas. (Read our 2009 Story)

Puerto Princesa airport will have its runway expanded and new taxiway developed for the construction of a new and bigger passenger terminal building with gate facilities under the official development assistance (ODA), worth 3.3 billion pesos. The Government of the Philippines will shoulder the remaining 1 Billion Pesos as counterpart funds to be sourced in the GAA for the duration of the project.

A new ramp and control tower will also be constructed for the said project together with installation of navigational aids to accommodate increased domestic and international flights. A new access road will also be build to service the terminal which is expected to handle 3 million passengers.

The airport is a priority infrastructure project of the Aquino administration, in preparation for the increase tourists arrival in the city after Puerto Princesa Underground River basin was included as one of the New 7 Wonders of Nature.

The loan agreement will be payable in 40 years and with a 10-year grace period with an interest rate of 0.1%. Construction is expected to begin within the year for completion in 2015.

Engineering works was provided by Price Waterhouse and Cooper International.

C-27J Spartan to join PAF

As Indonesia wins procurement for a spy plane

September 11, 2012

The Department of National Defence has selected Italy to supply three medium-sized military transport aircraft manufactured by Alenia Aeronautica, while Indonesia was awarded  the long-range maritime patrol and surveillance plane, says Peter Paul Galvez, DND spokesman.

"It is just a matter of approval now by the President" says Galvez. Once President Aquino approves the acquisition, the planes would strengthen the country’s air force and heightened navy's maritime domain awareness.

The Alenia C-27J Spartan is a medium-sized military transport STOL aircraft built by Alenia Aeronautica having the same engines and systems of the Lockheed Martin C-130J Super Hercules.

The C-27J was selected because of its communality with existing C-130 frames of the Philippine Air Force thereby minimizing cost for maintenance procedures, and at the same time training personnel for future C-130J acquisitions.

Meanwhile, CASA/IPTN CN-235 MPA is a medium-range twin-engined transport plane that was jointly developed by CASA of Spain and Indonesian manufacturer IPTN, part of Airbus Military, as a regional airliner and military transport. Its primary military roles include maritime patrol, surveillance, and air transport.

CN-235 MPA was chosen because of its ability to stay in the air longer which is good for maritime surveillance and its capability to double as a military transport. Its rear ramp access made the choice easier compared to the ATR-42MP says the DND spokesman.

The CN-235 MPA can be fitted with the Seaspray 4000 radar from BAE Systems, the AN/APS-134 from Raytheon or the Ocean Master 100 from Thales. DND did not disclose what radar they will fit in the plane.

“The long-range patrol aircraft would be devoted solely to conducting maritime surveillance.” says Galvez.

The surveillance plane has a crew of two, a pilot and co-pilot, and can carry 44 passengers and a payload of 13,120 pounds with a cruising speed of 454 kilometers per hour and a range of 2,730 nautical miles.

Philippine carriers see huge opportunities in China

Once restrictions are lifted

September 11, 2012

Philippine carriers expect to significantly expand their China operations over the next several years and remain confident in the opportunities in the Chinese market despite a current government warning on holidaying in the Philippines. Philippine low-cost carriers – including AirAsia Philippines, Cebu Pacific, PAL Express/AirPhil Express and Zest Air – are poised to be the largest beneficiaries from increasing demand in the Philippines-China market.

In recent years an influx in charters has catered to a large portion of the growth in the Philippines-China market. But charters between the two countries have stopped operating in recent months due to a Chinese government warning against travel to the Philippines, an unfortunate politically-motivated byproduct of the dispute over the Scarborough Shoal in the South China Sea. The return of charter operations and a significant increase in scheduled flights are expected once the warning is lifted.

There are currently about 11,000 one-way scheduled seats per week in the Philippines-China market, down about 15% from May-2012 when China first issued its warning against travelling to the Philippines following a naval standoff with the Philippines around the Scarborough Shoal. Philippine carriers account for nearly three-quarters of capacity in the market. Philippine Airlines (PAL) is the largest carrier, accounting for 37% of current capacity between the Philippines and China.

Cebu Pacific is the second largest carrier in the Philippines-China market, accounting for 27% of total capacity. A second Philippine LCC, Zest Air, also serves mainland China but only accounts for about 9% of total capacity in the market. China Southern currently accounts for about 21% of capacity in the Philippines-China market while Air China accounts for the remaining 6%, according to Innovata data.

PAL currently serves Beijing, Shanghai and Xiamen from Manila while Cebu Pacific serves Guangzhou, Beijing, Shanghai and Xiamen (launched in Mar-2012). Zest serves Shanghai and Quanzhou (launched in May-2012, giving Qanzhou Jinjiang Airport its first scheduled international service). From the Chinese side, China Southern serves Manila from Guangzhou and Xiamen while Air China only links Manila from Beijing.

Philippines to China capacity (one-way seats per week) by carrier: 10-Sep-2012 to 16-Sep-2012

Carrier	Routes and weekly seats	Total weekly seats and capacity share
Philippine Airlines	Manila-Beijing (750) Manila-Shanghai (2114) Manila-Xiamen (1201)	4065 (37%)
Cebu Pacific	Manila-Beijing (716) Manila-Guangzhou (537) Manila-Shanghai (1253) Manila-Xiamen (450)	2956 (27%)
China Southern	Manila-Guangzhou (1022) Manila-Xiamen (1253)	2275 (21%)
Zest Air	Manila-Quanzhou (504) Manila-Shanghai (504)	1008 (9%)
Air China	Manila-Beijing (656)	656 (6%)

Source: CAPA – Centre for Aviation & Innovata

Philippines-China was a large charter market before Scarborough Shoal conflict

PAL, Zest and Cebu Pacific also operated frequent charters into China prior to May-2012, when Chinese tour companies cancelled their charter programmes as a result of the travel warning. Most of the charters operated to airports near beach resorts (such as Kalibo) rather than Manila. The warning has also significantly impacted demand and profitability on scheduled routes, according to executives at Philippine carriers.

The PAL Group's LCC subsidiary, AirPhil Express (which later this year will readopt the previous brand PAL Express), also operated flights to China prior to the onset of the current crisis in May-2012. PAL Express will likely resume flights to the country once tensions ease and would be the logical brand for adding destinations in China that are not served by PAL mainline given AirPhil/PAL Express’ leisure focus and all-economy configuration.

While Philippine carriers would be interested in increasing capacity to major Chinese cities, slot and traffic right restrictions will likely limit any growth in Beijing, Shanghai and Guangzhou to up-gauging existing flights. Cebu Pacific, for example will be able to more than double capacity on its Beijing and Shanghai services by switching from Airbus A320s to Airbus A330s, which it will start taking delivery of in mid-2013. But the real opportunities are in secondary Chinese cities.

Cebu Pacific CEO advisor Garry Kingshott told CAPA's LCCs & New Age Airlines in North Asia conference on 06-Sep-2012 that “the opportunities in China and Chinese secondary cities are enormous. They will sustain many more operations for years to come as disposable income comes up and they are allowed to travel.”

Also speaking at the conference, Zest CEO advisor Brian Hogan cited Xian and Chengdu among the many secondary Chinese destinations which can potentially support LCC service from the Philippines. “When China opens up oh my goodness you could put a 1,000 airplanes in and out of there ... there’s people everywhere. They want to travel,” Mr Hogan said.

AirAsia Philippines seeks China traffic rights

New LCC AirAsia Philippines is also keen on the mainland China market and has already applied for traffic rights to China. AirAsia Philippines launched services in Mar-2012 and now operates domestic as well as international flights to Kuala Lumpur, Hong Kong and Macau.

AirAsia Philippines could launch flights to mainland China as early as 2013, at which point it is hoped that the current travel warning will no longer be in place. AirAsia Philippines will seek to serve points in mainland China which are already served by other AirAsia affiliates. The AirAsia Group now has seven destinations in mainland China – Beijing, Chengdu, Chongqing, Guilin, Guangzhou, Hangzhou and Shenzhen. Guangzhou and Shenzhen are served from both Kuala Lumpur and Bangkok while Beijing, Chengdu, Guilin and Hangzhou are served from Kuala Lumpur and Chongqing is served from Bangkok. Four more mainland China destinations are to be added in the coming months – Nanning, Kunming, Xian and Wuhan.

AirAsia’s large presence in China through its affiliates in Malaysia and Thailand could give AirAsia Philippines an advantage as Philippines-China becomes a hot market. AirAsia Philippines will not have to spend as much to launch and support new services to secondary cities in China as its competitors because it can leverage the existing services of AirAsia X, AirAsia Malaysia and Thai AirAsia. Being affiliated with a well known pan-Asian brand will also help AirAsia Philippines market any new service to Chinese residents, which would account for the overwhelming majority of passengers on any new Philippines-China route.

Limited domestic opportunities prompt Philippine LCCs to look towards North Asia

Most Philippine LCCs now see more opportunities in the international market than domestically given the intense competition and overcapacity that is plaguing the domestic market. There are currently five LCCs operating domestically in the Philippines – market leader Cebu Pacific, AirPhil Express (soon to be rebranded PAL Express), Zest, SEAir and AirAsia Philippines. SEAir launched a new LCC operation covering domestic trunk routes in late Jul-2012 with support from new part-owner Tiger Airways.

AirPhil, AirAsia Philippines, Cebu Pacific, SEAir and Zest will all likely focus medium-term expansion on the international market, particularly China and other north Asian destinations. “North Asia to me is mecca,” Zest’s Mr Hogan tells CAPA. “I’m not excited by the domestic market.”

Of all the international markets from the Philippines, China offers the biggest potential opportunities as most other short-haul international markets such as South Korea, Hong Kong, Singapore and Malaysia are already well served by LCCs. (There are opportunities in Japan – which is only served by one Philippine LCC, Cebu Pacific, with only one destination – but all Philippine carriers have been barred by Japanese authorities from adding capacity until the Philippines can pass an ICAO audit.)

Top five international markets from the Philippines based on capacity (seats per week): 10-Sep-2012 to 16-Sep-2012

Market	One-way seats per week
Hong Kong	36,284
South Korea	30,710
Singapore	29,061
Japan	21,364
China	10,960

Source: CAPA – Centre for Aviation & Innovata

South Korea is already now the largest source of visitors to the Philippines. There are currently just over 30,000 weekly one-way scheduled seats between South Korea and the Philippines and during peak periods there are up to 40,000 weekly seats. (Hong Kong is the largest international market from the Philippines based on capacity but South Korea is a larger source of visitors.)

There is also a huge charter market between the Philippines and Korea. Most of the charter flights operate to and from Kalibo, which is the closest international airport to the popular resort island of Boracay (about 90 minutes by bus). Mr Hogan says Zest currently operates 32 charter flights per week to Korea and Korea accounts for 25% to 30% of the carrier’s total business (Zest also currently operates 18 weekly scheduled flights between Korea and the Philippines).

Charters to Korea help Philippine LCCs as well as PAL improve their aircraft utilisation as the flights are almost always operated in the middle of the night using A320s which are used primarily in the domestic market. (LCCs also operate some international scheduled flights late at night and early in the morning but these only utilise a small portion of their fleets.)

PAL and the LCCs are keen to offer more scheduled flights to Korea and China as scheduled flights are potentially more lucrative than charters. While charters are low risk because the tour companies cover the cost of the flights, the margins are typically low and the tour companies are charging a lot more than LCCs would charge for the same seat. For example while Zest will continue to look to grow its Korea charter business, adjusting its model to accommodate the request of Korean tour companies such as in-flight meals, it is also keen to expand its scheduled operation into Korea and will launch a daily flight from Clark Airport outside Manila to Seoul Incheon in Oct-2012. The addition of Clark-Seoul will give Zest five scheduled routes to Korea along with Cebu, Manila and Kalibo to Seoul and Kalibo-Busan.

China could become the Philippines largest market

Philippine carriers believe the China market could eventually overtake South Korea although it is now only one third the size. While there are only two cities in Korea with scheduled service to the Philippines, Busan and Seoul, there are dozens of Chinese airports that can potentially support service to the Philippines. Chinese regional airports are also seen as more aggressive in recruiting foreign LCCs than airports in Korea or Japan.

Nearly all of China is within the range of narrowbody aircraft from the Philippines, opening up opportunities in every region of the fast-growing country. Mr Kingshott points out that the Philippines is uniquely positioned to benefit from the expected boom in China outbound tourism as the Philippines is the closest tropical destination to China.

For now however Philippine carriers have to be patient and wait for the Philippine-China relations to improve before exploiting the huge opportunities in the Chinese market. So far there have not been many encouraging signs since the Scarborough Shoal conflict began in Apr-2012. But Philippine carriers remain optimistic that the China travel warning will be lifted sooner rather than later. Once it does, rapid growth will almost certainly ensue and China could eventually become the largest source of tourists for the Philippines.

5J, Z2 Cleared for UAE landing

CAB rules ends PR code-shares to EK and EY

September 10, 2012

The Civil Aeronautics Board (CAB) concluded new Air Service Agreement (ASA) with the United Arab Emirates providing additional 14 flights to the Emirate Kingdom.

CAB Executive Director Carmelo Arcilla said UAE agreed to increase entitlements from the current 14 flights per week to 28 flights for each side between Manila Abu Dhabu, and Dubai.

Abu Dhabi has 7 entitlements being used by flag carrier Etihad and Dubai has 7 entitlements used by flag carrier Emirates to Manila, while the other 14 entitlements was solely held by flag carrier Philippine Airlines (PAL). Both airlines have code-share relationship with PAL allowing them to fly a total of 28 flights a week to Manila using Boeing 777-300ER planes.

The new ASA allowed both Emirates and Etihad 7 more flights entitlements each per week to both Dubai and Abu Dhabi, respectively, while the other new 14 entitlements are to be shared by Cebu Pacific (CEB), Air Philippines, and Zest Air for rights to Dubai and Abu Dhabi. 

The new frequencies firms up Cebu Pacific and Zest Air’s plan to mount long-haul flights to UAE next year from Manila.The remaining 14 rights is held by Philippine Airlines which it said would also be used by them next year.

Arcilla said they would likely award seven UAE entitlements to Cebu Pacific and another seven to Zest Air.

Air talks were held in Abu Dhabi in Sept. 5 and 6, amending the previous ASA's both countries last negotiated in 2009.

Also agreed in the air talks were unlimited traffic rights between points in the Philippines and the UAE, except Manila, in accordance with Executive Order 29 (EO29), otherwise known as the "Civil Aviation liberalization policy" of the Aquino administration.Under EO 29, the Third, Fourth, and Fifth Freedom of the air Rights are allowed, except Manila subject to reciprocal rights.

The two delegations agreed to confirm the designation of Emirates Airline , Etihad Airways , Air Arabia , RAK Airways and Fly Dubai as National Carrier from UAE Side, while the Philippines designated Philippine Airlines, Cebu Pacific, Zest Air and Air Philippines as National Carriers.

The agreement was signed by UAE's General Civil Aviation Authority (GCAA) Deputy Director General Omar Bin Ghaleb and Undersecretary Jose Perpetuo M. Lotilla of the Department of Transportation '&' Communications in the Philippines.

Representatives from Abu Dhabi Department of Transport, Dubai Civil Aviation Authority, Sharjah Department of Civil Aviation, Ras Al Khaimah Department of Civil Aviation, Etihad Airways, Emirates Airline, Air Arabia and RAK Airways attended the negotiations.

According to the ASA, both parties agreed for 28 weekly frequencies for each side to/from Manila, 14 of which is divided between Dubai and Abu Dhabi, Forty two (42) additional weekly frequencies for each side to/from Clark International Airport, Twenty one (21) additional weekly frequencies for each side to/from Cebu International Airport; and unlimited weekly frequencies for each side to/from other airports in the Philippines.

The designated airlines of the UAE shall have the right to exercise full fifth freedom traffic rights only up to fourteen (14) weekly frequencies between any intermediate point(s) and Diosdado Macapagal International Airport (Clark) only, and any point(s) beyond, except Japan, the USA and Canada.

The designated airlines of the Philippines shall have the right to exercise full fifth freedom traffic rights only up to fourteen (14) weekly frequencies between any intermediate point(s) and any one point in the UAE only, and any point(s) beyond, except the United Kingdom, Saudi Arabia and Kuwait.

Arcilla also said PAL may have to end its code share relationship with Emirates and Etihad next year after the latest ruling of CAB requiring them to service the route or lose entitlements to the UAE. In the application hearing of CEB, PAL promised to reintroduce Dubai and Abu Dhabi to its route network by next year in exchange for not recalling its issued entitlements.

Cebu Pacific has filed before CAB a reconsideration to its earlier order denying CEB UAE entitlements. The airline earlier requested the agency to recall PAL’s flight entitlements to the UAE as the airline stopped direct flight there. It argued that since PAL is no longer mounting direct flights, CAB should reallocate entitlements to other airlines. CAB dismissed the case adopting PAL's argument that they are still flying UAE on code-share arrangement with UAE airlines Etihad and Emirates Airlines.

Arcilla said the motion for reconsideration filed by both Cebu Pacific and PAL is still pending with the board.  PAL seeks reconsideration on CAB's order requiring it to service the route or lose entitlements.

“There is no final decision yet,” he said.

For Emirates, termination of code-share relationship with PAL is not seen to make a dent on its drive to grow the market with its new entitlements, although it will affects the plan deployment of its A380 to Manila which capacity is dependent upon PAL's right. The airline is expected to continue flying Manila twice daily without PAL.

Etihad on the other hand says that it will maintain its frequency of two daily flights from the grant of additional seven rights although hints introduction of third daily flight should CAB's earlier order be reconsidered.

Philippine Airlines is expecting deliveries of four 240 ton new generation Airbus A330-300 in 2013 for services to the Middle East and Australia. The high-gross weight (HGW) A330 variant is capable of direct flights to all parts of Saudi Arabia and to as far as Istanbul in Turkey, fully loaded according to disclosures by Airbus.

CAB will also conduct air service negotiations with the Kingdom of Saudi Arabia on Sept. 24 and 25.

Earlier talks with Singapore on Aug. 15 and 16, and Australia on Aug. 28 and 29, bogged down amidst reluctance by the Philippine panel to offer unlimited fifth freedom rights proposal by Singapore and Australia. 

“They want Fifth Freedom so they can pick up passengers in Japan, Korea and China. Our airline thinks this request is negotiated on the basis of reciprocity of balance. Australia's beyond rights apply only to New Zealand, while Singapore offers Australia and limited rights to Indonesia. We agreed however to add more frequency after all entitlements are used up,” Arcilla said.

The country also had unsettled air talks with Indonesia and Taiwan.Indonesia still maintain restrictive aviation policy while Taiwan wants additional seat entitlements to the country despite existing unused entitlements.

Bulacan, Maybe?

$500-M new PAL airport sets off guessing game

September 2, 2012

By Recto L. Mercene

WHEN Philippine Airlines (PAL) President Ramon S. Ang announced before the weekend that they will build a $500-million airport as an alternative to the congested Ninoy Aquino International Airport (Naia), he did not say where the new facility would be located but hinted that it would be about 15 minutes away from the Ayala business center in Makati City and would sit on a 2,000-hectare property.

Why the secrecy? Is it because he does not want speculators to grab surrounding real estate, whose value would zoom to the skies, and make real-state dealers instant millionaires?

Ang’s conundrum sent the media into a guessing spree.

Try as we can, we could not envision a place that is that big, or wide enough to accommodate an airport complex, with two runways that could handle 150 flights per hour.

Ang said the site for the $500-million airport could accommodate up to four runways, and that they would present their plan to President Aquino in January or February next year.

A source helped us figure it out where the PAL president could be coming from, telling the BusinessMirror over the weekend that the new $500-million PAL airport might find a home in Binangonan, Rizal.

The highly reliable source said the coastal town of Binangonan figured in a study made by the National Economic and Development Authority (Neda) almost 10 years ago as a possible site for a new modern airport. He added that nothing much about the study has been heard since.

The source said the possible site has an area of a little more than 2,000 hectares. He could be referring to a 2,170-hectare property in Bina­ngonan that belongs to IRC Properties Inc.

According to the IRC web site, the property lies about 20 kilometers east of Metro Manila in what is “envisioned to be the next growth corridor, where major business and economic activities would take place.”

The company has prepared a master plan for the land.

Its web site said, “The plan, formulated by Palafox and Associates, draws up a multiple land-use program characterized by a balanced and [complementary] mix of industrial, agro-industrial, commercial, residential, recreational and institutional projects. Feasibility studies, architectural and engineering plans for the low- and medium-cost housing projects have also been prepared.”

But, IRC said, a “very weak and greatly affected real-estate market continuing up to 2002” prompted it to suspend “development and clearing activities” until the property market becomes active again.

The first thing that came to mind as to where the new airport facility will be built was not Binangonan but Sangley Point in Cavite, home to the Air Force 15th Strike Wing. It is about 15 minutes away from the Ayala business center by helicopter, it has an existing runway built by the American military, and a little reclamation of Manila Bay would increase its present 140 hectares to one that could equal Hong Kong’s Chep Lap Kok Airport, or Singapore’s Changi International Airport.

Sangley is one of the few remaining military assets, out of the 23 facilities that the Americans left when they withdrew from the Philippines in 1991. It used to be the home of a squadron of P-3 Orion “submarine hunters.”

The other former US facilities are Clark Air Base, now the Diosdado Macapagal International Airport; Subic Naval Base, now the Subic Bay Metropolitan Authority; and Mactan Air Base, now the Mactan-Cebu International Airport.

Civil Aviation Authority of the Philippines (Caap) air-traffic controllers from the Ninoy Aquino International Airport (Naia) exercise jurisdiction over Sangley air traffic, so there is no conflict at all regarding their simultaneous operations.

A newspaper reader suggested that since the Philippine Reclamation Authority (PRA), formerly the Philippine Estate Authority (PEA), is reclaiming 635 hectares of Manila Bay, the money spent could be used to realign the reclamation so that a modern airport could be built at the Naic, Cavite, side and spare the Las Piñas-Parañaque Coastal Lagoon, where a bird sanctuary is located.

The reader said, “Sangley’s 138 hectares, plus the planned 635 hectares to be reclaimed, will be a little bigger than half of Changi in Singapore and that of Chek Lap Kok in Hong Kong.”

A total area of 773 hectares is more than enough to host a modest but modern, safe and accessible airport of world standard, the reader opined.

The reader said that half of the present facilities of the Manila International Airport Authority (Miaa) can be operated as a domestic airport and half as a commercial center to complement Megaworld.

“To avoid traffic congestion, the domestic airport must be linked to Sangley from Terminal 3 via Pagcor Entertainment City by a monorail on a viaduct or a tunnel. Fast-craft ferries can double as Manila Bay Tour and serve the transportation needs of the new airport from the Mall of Asia harbor, which could also be developed into a central transport terminal for the convenience of passengers.”

Several other groups earlier suggested turning Sangley Point as alternative to the Naia, but the government simply would not listen.

Newly appointed Interior Secretary and former Transportation top honcho Manuel Roxas II said during his stint at the Department of Transportation and Communications that Sangley Point cannot be a viable alternative to the Naia.

According to Roxas, expanding Sangley Point airport to allow the layout of another parallel and independent runway would entail reclamation of a huge swath of Manila Bay in Manila and Cavite.

“Sangley is probably going to be a single-runway facility for GenAv [general aviation],” he said, adding that reclaiming a large tract would only equal the area now occupied by the Naia, which proves to be “too small to allow two parallel and independent runways.”

Roxas said Clark is still “the long-term alternative” with its available 2,000 hectares that could accommodate up to three parallel independent runways.

Making Clark airport as the main gateway, however, requires a fast rail access to Metro Manila.

This is the same objection voiced by Ang, who said plans for a $10-billion fast train to connect Makati and Clark is not practical.

Since Sangley remains a poor choice, that leaves the 2,000-hectare San Miguel property in San Jose City, Bulacan, the best alternative for an international airport, according to an airport source.

The source said that for years, it is a little-known secret that San Miguel has been offering its San Jose City, Bulacan, property as an alternative airport to the then-Air Transportation Office  (ATO), Caap’s forerunner. But nothing came out of it after the ATO was abolished.

There are certain problems that would have to be addressed before the runways are built, but knowing that Ang appears to enjoy a degree of closeness to the Aquino administration, these problems are “not insurmountable,” the source added.

Constructing an airport complex, including the runway, is not just building any infrastructure.

The source said that normally, a 10-year compilation of the site’s wind direction and velocity, rainfall, precipitation and several other weather parameters would have to be studied, in order to determine the runway’s feasibility and eventual layout.

“What good is a runway if most of the year, the airport is drenched with rain, has poor visibility, adjacent to mountains or man-made obstacles? What if airplanes are buffeted by strong crosswind during landing and takeoff?” he asked.

As an example, the source pointed out that the east-west layout of the Naia is not accidental. It is also not an accident that it is located where it is now, when Metro Manila is usually drenched by rain, and yet the airport is usually rain-free in more days than other places in Metro Manila.

The Naia runways straddle the Pasay City-Parañaque City area and is usually affected by the northeast monsoon and the southwest monsoon or habagat, blowing almost equally from the northeast and southwest directions during the year.

The source, an aviation expert, said airplanes sometimes take off toward Antipolo, Rizal, in a northeasterly direction using Runway 06. “060” degrees is the northeasterly bearing of Runway 06 starting from the Parañaque side toward Antipolo, while airplanes taking off on Runway 24 on a southwesterly direction, hence the bearing is 240 degrees, starting from the South Luzon Expressway side toward Parañaque.

That is how Runway 06-24 is named, the source said.

But why is there a Runway 13-31 running in the north-south direction?

The airport expert said in the early days of aviation, when most airliners are small, airplanes have to land and take off directly into the wind because they could not handle strong crosswinds, so the choice was either Runway 06-24 or Runway 13-31, depending on the wind direction and velocity.

Today, jumbo jets can withstand 15-knot crosswinds, which would sweep off the runway smaller airplanes.

Another obstacle that Ang had to face is an existing CAAP regulation that says no international airport should be built within 24 kilometers of an existing international airport.

San Jose City, Bulacan, if this is where Ang’s airport is finally built, sits at the south side of the province and shares a common boundary with Metro Manila and Rizal. It is yet to be determined whether it is within the 24-kilometer-limit of the Diosdado Macapagal International Airport (DMIA).

The aviation expert, who said a long study was needed before any new airport could be built, noted that it is now the norm for private firms to run an airport complex. Formerly a ranking Caap official, he also cited findings showing that government-run airports could not keep up with developments and usually run into red ink, unless subsidized by the government.

Although Changi in Singapore and Chep Lap Kok in Hong Kong are run by government-owned and -controlled corporations, the expert said, airports in New Zealand, Australia, Malaysia, Vietnam, Germany (Frankfurt Airport) and many others are privately operated and proved to be financially successful.

A version of this article appeared on September 1, 2012 edition of the Philippine Business Mirror, with the headline: $500-M new PAL airport sets off guessing game.