Banned

MIAA Closes Airport to General Aviation, 
Opens Sangley to Commercial Traffic

1 August 2013

The Civil Aviation Authority of the Philippines (CAAP) has issued an order limiting flights of general aviation traffic from using Ninoy Aquino International Airport beginning July 31.

In its stead is the Sangley Airport in Cavite which begins its first commercial traffic since its inception as a military airport by the Americans in 1945.

The restriction was issued by Transport Secretary Joseph Emilio Abaya on June 28 under Department Order No. 2013-08.

In a statement by  CAAP Deputy Director General John Andrews during a press briefing this afternoon, the flight restriction covers corporate jet and air taxi landings and take-offs at NAIA to only two cycles per hour, which is equivalent to two take offs and landing from 11 PM to 11 AM only.

General Aviation flights used to have seven to eight cycles per hour, according to Andrews. 

With the opening of Sangley Airport,  all the general aviation flights will eventually be transferred in Cavite, as well as small propeller and turboprop flights soon, making NAIA a jet-only airport as it prepares to accommodate the arrival of 12 widebody jets of both PAL and CEB this year. 

In a separate statement, Angel Honrado, Manila International Airport Authority General Manager, said the new policy will raise NAIA's rated capacity to 42 landings and take-offs per hour from the present 40 with the reduction of Genav traffic.

“We will be able to minimize delays and cancellations,” Honrado said.

Honrado added that NAIA was able to handle as high as 52 events (landing and take offs) per hour in the past but because of high delay incidence they were able to reduce congestion to as low as 36 events in past two years.

NAIA registered an average of 550 aircraft movements daily with 450 planes using runway 06-24, while  runway 13-31 handles 100 planes on average per day.

General Aviation planes causes delay in congested airport because they occupy a lot time on approach and landing due to their speed limitation as compared to the faster jet which can vacate the runway through the rapid exits in less than 60 seconds as compared to the props which takes almost 120 to 180 seconds from final approach to landing.

MASWings Apply Permit to Fly South

 PPS, CEB, ZAM, DVO Finally!

31 July 2013

Malaysia Airlines subsidiary MASwings has finally applied with the Civil Aeronautics Board (CAB) for “Foreign Air Carrier’s Permit (FACP) to operate international scheduled air transportation services” in the Philippines. 

MASwings intends to fly to Puerto Princesa in the Philippines from Kota Kinabalu, says its Chief Commercial Officer, Shauqi Ahmad after deferring its application couple of times in the past due to adverse market conditions. 

Flight is expected to begin at the end of the year after securing regulatory approvals.

Ahmad said it will be the airlines first destination in the Philippines and the route will be flown using ATR 72-500 planes.
The airline intends to open additional destinations in Zamboanga, Davao and Cebu from Kota Kinabalu and Sandakan after launching flight to Puerto Princesa.

Parent Malaysia Airlines recently confirmed an order for 20 ATR 72-600s and 16 options valued at $840 million which will go to its Firefly and MASWings subsidiaries beginning in mid 2013.

MASwings currently operates a fleet of 10 ATR 72-500 similar to those being used by Cebu Pacific. It expects to receive 16 of the newer generation ATR 72-600 for flights between BIMP- EAGA Region.

Cebu Pacific Orders Two More A330

27 July 2013

Cebu Pacific sealed operating lease agreements for two additional Airbus A330-300 from US-based Intrepid Aviation for 2014 to 2015 delivery as it targets more destinations in Asia Pacific and the Middle East, a statement on Wednesday revealed.
The airline is doing rotation daily of its first A330 to Singapore and Seoul. The second A330 is scheduled to fly Dubai and the third on order is scheduled to fly Melbourne with the fourth one also slated for middle east run.

Why FEDEX Can't Fly

FEDEX must be Filipino Owned

By Edu Punay



22 July 2013

The Court of Appeals (CA) has effectively stopped the operations in the country of international forwarding firm Federal Express (FedEx).

FEDEX has to comply the 40% Ownership to fly the Philippines

The fourth division of the appellate court last week voided the permit granted in 2011 by the Civil Aeronautics Board (CAB) to Federal Express Pacific Inc.

The CA ruled with finality that FedEx’s operations in the country violate the constitutional ban on foreign ownership of firms delivering public utility services.

In a two-page resolution released last week, the CA denied the motion for reconsideration filed by FedEx.

Instead, it affirmed its decision last Jan. 23 which held that FedEx is a foreign corporation and could not engage in public utility services such as international airfreight forwarding.

The court reiterated that FedEx’s operations are detrimental to the interest of local competitors and of the Philippine economy as a whole.


“We hereby declare respondent Federal Express Pacific, Inc., a ‘foreign corporation,’ disqualified in our country from operating as an ‘international airfreight forwarder’ which is clearly a public utility,” read the ruling penned by Associate Justice Danton Bueser.

Associate Justices Amelita Tolentino and Ramon Garcia concurred in this decision.

With the new ruling, the May 2, 2011 resolution of the Civil Aeronautics Board (CAB) granting Federal Express Pacific Inc. a regular permit to operate international airfreight forwarding has been “null, void and of no further force and effect.”

As basis, the CA cited Article XII Section 11 of the Constitution, which provides that “operation of a public utility shall be granted to Filipino citizens or to corporations or associations organized under the laws of the Philippines.”

The CA was ruling on petitions filed by Merit Freight International Inc. and Ace Logistics Inc., questioning CAB’s decision to grant FedEx a regular permit to operate international airfreight forwarding.

In questioning CAB’s decision, Merit argued that international airfreight forwarding is a public utility reserved for qualified Filipino individuals and corporations as embodied in the 1987 Constitution.

Ace, for its part, said CAB erred in granting permit to operate to Federal Express Pacific Inc. despite the fact that it is a 100 percent foreign-owned and foreign-based corporation.

In granting the petitions, the CA also cited a previous resolution by the CAB dated June 1, 1990, directing Royal Cargo Corp., a company whose president then was a foreigner, to relinquish its top position to a Filipino national in accordance with Article XII Section 11 of the 1987 Constitution.

Royal Cargo questioned CAB’s resolution before the Court of Appeals, which ruled that the petitioner is covered by restrictions embodied in the 1987 Constitution.

The court also rejected Federal Express’ argument in its appeal that Merit has no legal standing to question its application for a regular permit and no personal stake in the outcome of the case.

The CA ruled that Merit, as a citizen, has the requisite locus standi – or the right to bring an action to be heard in court – to question the matter.

Toronto Stays

21 July 2013

Philippine Airlines has re-considered yesterday its decision to axe Toronto from September 18, 2013 by announcing that it will continue to fly eastern Canada three times a week.

The airline said it has secured approval to lease two more A340-300 to support this route and its growing long haul network.

Earlier, PAL said it terminated the service because it wont have the aircraft to service Toronto.

LTP Upgrades A380 Hangar for MRO

20 July 2013

  

Lufthansa Technik Philippines will spend US$20 million

this year to expand its MRO) operation in Manila

Lufthansa Tecknik Philippines (LTP) announced a $20 million expansion of its A380 hangar to accommodate aircraft overhaul from the present cabin modifications.

At the sidelines of the company's stockholders meeting, MacroAsia president Joseph T. Chua said the expansion is necessary to address the needs of its clients, particularly Qantas.

LTP is a joint venture between MacroAsia and Germany's Lufthansa Technik AG, providing line and base maintenance as well as MRO services to at least 50 customers from around the world in its facilities at the Ninoy Aquino International Airport, Clark , Cebu and Davao.

Among LTP's long time base customers are Qantas Airways, Cathay Pacific, Virgin Atlantic, Lufthansa Airlines, Austrian Airways, Swiss Airlines and Philippine Airlines. 

Line customers include among others Qatar Airways, Hawaiian Airlines, Japan Airlines, ANA, China Eastern, Air China, Cebu Pacific, Air Niugini, Eva Air, Etihad, China Airlines and Korean Air

EU Ambassador Argues Why Flying Direct Matters

19 July 2013

By Guy Ledoux 
Ambassador of the European Union to the Philippines

"The lifting of the EU air ban for Philippines Airlines
on 10 July opening the door for direct flights to Europe
is significant in today’s world where time is precious."

One month ago, I took the plane for Brussels to attend the EU-Philippines Senior Official meeting. As I was in the check line, I learned that the computer system of the airline I was using had broken down and the checking was done by hand. 

We were back in the old age where the airline attendant was writing your name and seat number by hand on your boarding pass. Inevitably the boarding time was delayed by 2 hours. 

When I was finally comfortably seated in the plane a very strong storm hit the airport and we had to wait another two hours for the weather to improve so that we could take off. 

Of course with that sort of delay, I missed my connecting flight and instead of arriving at 7 a.m. in Brussels I arrived at 6 p.m. I must emphasise that the delay was not related to the airport nor to the local staff. These sorts of situations happen. I was however upset that I could not enjoy the short break I had planned which included the visit of the newly renovated Rijks museum of Amsterdam.

In our modern world, travellers, whether for business or leisure, expect airlines to be on time. When it is for business, a late arrival might result in an important meeting with a customer missed. When it is for leisure, time is also precious and one prefers to spend a few hours more on the beach than in a cramped airplane parked on the tarmac.

The lifting of the EU air ban for Philippines Airlines on 10 July opening the door for direct flights to Europe is significant in today’s world where time is precious. The re-introduction of direct flights will bring the travel time between Manila and Paris or Manila and London from around 17:00 h to 12:00 h. Businessmen and tourists will appreciate the absence of connecting flights with all the related inconvenience such as transit time, transit formalities and risk of losing luggage.

The Philippine government considers tourism one of its key growth industries that should contribute to providing much needed jobs. The beauty of Philippine beaches and diving opportunities undoubtedly represent a key comparative advantage for the Philippines. In 2012, European tourist arrivals in the Philippines were up 10%, with 349,000 visitors, despite the absence of direct flights. Direct connections will provide a strong additional incentive for European tourists to visit the Philippines.

The lifting of the air ban, starting with the national flag carrier, demonstrates that the Philippine government is following a steady path of reforms. Having identified tourism as a growth industry it concentrates its efforts on progressively eliminating all bottlenecks affecting the sector. By renewing its fleet with an order of 67 new planes from Airbus, Philippine Airlines will offer its customers attractive direct flights from Europe and local investors are building new hotel facilities showing that the private sector is following suit. These combined efforts will definitely validate the department of tourism’s slogan: Its more fun in the Philippines. (Published on the Philippine Star on July 19, 2013)

Too Ambitious!

CAPA labels PR flight to EU too risky

19 July 2013

After 15 year hiatus, Philippine Airlines (PAL) will be back in Europe with ever increasing and tense competition to the region amidst recession in the EU area. Can PAL survives the competition?

The Centre for Asia Pacific Aviation (CAPA) thinks otherwise and labelled the airlines desire to fly to Europe as "overly ambitious".

In its analysis, it found that its better for PAL to focus its attention "on the better performing Asia-Pacific market" which CAPA said is generally a more profitable option, considering the present economic environment.

"A large online network could help and quickly build PAL’s brand in the European market, where the carrier is relatively unknown. But operating several 12 to 13-hour routes in a market that is highly price sensitive and has limited premium demand is very risky", it said. 

CAPA added that "Such long-range flights are expensive to operate and PAL could struggle to achieve the yields necessary to make the routes viable, particularly as it will need to price competitively against more economical one-stop products".

Philippine Airlines (PAL) Chief Operating Officer and President Ramon Ang has different perception in mind saying that they have studied the European market more than once for so long that they are certain to be competitive in the Europe-Asia market. Its market study also found that daily flights to major European destinations gets better results than having to fly on odd-even days.

Ang said that PAL's ticket prices will be "very competitive" with other airlines, which offer economy seats from Manila to London at $1,200 or about P52,000.

PAL is targeting close to 1 million migrant workers in Europe as well as leisure travellers heading to the Philippines. But CAPA maintains that Gulf carriers are in better position to carry European tourist to the country given their much larger European networks.

PAL bids Toronto Goodbye

Ends flight September 18

17 July 2013

Toronto become the first casualty of the European migration policy of Philippine Airlines as it announced termination of its Toronto service effective September 18, 2013.

The airline said it has no choice but to sack the east coast flight because it wont have the aircraft to service the destination after opening of European Airspace.

PAL recently launched  services between Manila and Toronto on November 30, 2012 as its first gateway to the East Coast of North America in 15 years, since they shut down their New York operation in 1997.

Flights to Vancouver however will remain on daily basis and most likely be downgraded to an Airbus 340-300 service.

The airline said they will be redeploying all its Boeing triple seven to Europe. Triple seven services to Japan and Australia are likewise redeployed to be replace by new generation Airbus330-300 aircraft in October.

One destination such as Amsterdam requires two aircraft for daily rotation. Previously, PAL said they will start flying to Amsterdam, Paris, Frankfurt, London, and Rome.

FAA Is Coming

16 July 2013

The US Federal Aviation Administration (FAA) Chief Michael Huerta will visit the country in August this year to announce the new status of the Philippines aviation safety rating.

The FAA currently classifies the Philippines as status “category 2” country, which bars local airlines from expanding flights to the United States due to regulatory concerns.

CAAP Director General William Hotchkiss III said the announcement came after a brief visit by FAA inspectors who were supposed to be in the country for two weeks but their trip was cut short citing there is nothing substantial to do by the Philippines.

“They were supposed to stay here for two weeks, but they just stayed for five days,” says Hotchkiss.

Two inspectors from the FAA arrived last week for routine inspection of regulatory compliance which coincides with the announcement by the European Aviation Safety Agency (EASA) of the partial lifting of the European Union ban to fly its airspace.

Hotchkiss said the two FAA inspectors noted some minor issues, but added that all major concerns had already been addressed.

The CAAP head said that he doesn't want to pre-empt the announcement by the FAA but he was certain that we will get the category 1 rating before the end of the year.

Let the Wars Begin

July 16, 2013

By Victor C. Agustin

Cebu Pacific and PAL Express have begun undercutting current PAL code-share partner, full-service Middle East carrier Emirates, in the Manila-Dubai route, with the two local budget carriers slashing round-trip fares by half when a three-way fight over the busy corridor starts in November.

The Cebu Pacific website over the weekend was quoting a P24,574.61 round-trip, week-long fare with a Nov. 1 departure, as against PAL Express' inaugural P27,729 week-long fare.

Emirates, currently the lone player, apparently has not adjusted to the forthcoming competition for the mainly overseas Filipino contract-worker market, and was still quoting a $1,289.20 (P56,174.31 by Emirates' calculation) for the same route.

Cebu Pacific's pricing, incidentally, does not include costs of checked-in luggage and on-board meals.

Cebu Pacific charges P500 for each hot meal (a choice of beef caldereta, bistek Tagalog, chicken adobo and chicken barbeque), with a two-meal service expected for the nine-hour flight. Drinks, including water, likewise cost extra.

The Cebu Pacific website also lists a P1,500 charge for every checked-in baggage of not more than 15 kilos.

Despite being a budget carrier, PAL Express on the other hand said it was throwing in a 10-kilo free luggage allowance and "1.5 meals" (apparently, one meal and one snack) for every passenger not only for the Dubai route but also for other forthcoming Middle East flights.

PAL, and not PAL Express, will also start flying to Abu Dhabi on October 1, a month earlier than Dubai.

The flag carrier has also slashed by half the economy fare being charged by Etihad, despite the latter being its current code-share partner for the route.

PAL is quoting a $322.60 fare for Abu Dhabi for October 1, and another $322.60 for Manila on the October 8 return leg. Etihad, on the other hand, quotes $637.60 for each leg, but with fuel, airport and travel taxes already factored in the fare.

Besides Dubai and Abu Dhabi, PAL has also announced it would resume flying to Saudi Arabian cities Dammam, Jeddah and Riyadh starting December 1.

How Big is EU Foreign Traffic?

13 July 2013

FOREIGN TOURISTS ARRIVAL (EUROPE)

RANK	COUNTRY	TOURISTS	YEAR
1	United Kingdom	113,282	2012
2	Germany	67,023	2012
3	Russia	33,729	2012
4	France	33,709	2012
5	Switzerland	23,557	2012
6	Netherlands	22,195	2012
7	Sweden	21,807	2012
8	Norway	19,572	2012
9	Italy	16,740	2012
10	Spain	15,895	2012
Data Source	Department of Tourism

PSE Lifts Trading Suspension on PAL Holdings

 12 July 2013

 By Krista Angela M. Montealegre

The Philippine Stock Exchange (PSE) has lifted trading suspension on PAL Holdings Inc shares effective today after the airline operator complied with the bourse's minimum public ownership requirement.

In a disclosure to the Philippine Stock Exchange, the operator of Philippine Airlines said its public float has increased to 10.22 percent from 0.55 percent earlier, thus complying with the minimum public ownership requirement of 10 percent.

PAL Holdings avoided delisting after private investors subscribed to P2.415 billion worth of common shares issued after its capital stock was increased to P30 billion from P23 billion previously.

The PSE had given listed firms until end-2012 to meet the free float rule. Trading in shares of companies that failed to meet the deadline was suspended starting last January, but the bourse gave them until June 30 to address the deficiency, barring which they would be delisted.

Amsterdam and Paris by October 27

Rome by December 1

11 July 2013

Philippine Airlines (PAL) disclosed that it plans to launch daily flight to France and the Netherlands in October 27 with morning departures around 6-7 AM in Manila arriving at lunchtime in Paris and Amsterdam, and with return flights arriving around 6-8 AM the following day.

Amsterdam
Slot Coordination for Airports in the Netherlands (SCAN) confirmed PAL application beginning in 27 October 2013 for the IATA Winter 2013/14 season:

PR 720 - MNL - AMS Arr. 11.30  a/c 77W daily
PR 721 - AMS - MNL Dep.13.00  a/c 77W daily

Paris
France Airport Coordination (COHOR) also confirmed PAL application beginning in 27 October 2013 for the IATA Winter 2013/14 timetable:

PR 740 - MNL - CDG Arr. 13.00  a/c 77W daily
PR 741 - CDG - MNL Dep.14.40  a/c 77W daily

Rome
Meanwhile, Aeroporti di Roma, the airport operator of Rome Fiumicino Airport confirmed the application of PAL for landing slots in Rome's premiere airport beginning 1 December 2013 for the IATA Winter 2013/14 timetable:

PR 760 - MNL - FCO  Arr. 6.30  a/c 330 daily
PR 761 - FCO  - MNL Dep.9.00  a/c 330 daily

Frankfurt
Airport Coordination Germany (FLUKO) said that they already received slot application of Philippine Airlines out of Frankfurt-Main but has problems securing morning slot arrivals requested by the airline for the IATA Winter 2013/14 schedule. FLUKO said the airline wanted early morning slots. No schedule has yet been announced.

PAL President and COO Ramon S. Ang said yesterday that flights to Europe will resume as early as September or October this year.

"Seven times a week flights to London, seven times a week flights to Paris and other destinations," Ang said.

"Our flights will take you 12 to 13 hours one way compared to other airline flights that take 18 to 24 hours from Manila to Europe because you still have to wait for several hours in their hubs," Ang added.

PAL's ticket prices from Manila to London begins at $1,200 or about P52,000.

Felix Cruz, PAL Vice President Marketing Support, said that while the airline wanted to start flying Frankfurt first which is PAL's largest European operation in 1998, they encountered slotting problems similar to that of London Heathrow which prompted them to consider Paris, and Amsterdam.

Cruz said they also encountered slot problems in Amsterdam and Paris which gave them a midday slot instead of the preferred morning arrivals in Europe.

Cruz said that destinations to Europe, are still subject to regulatory approvals and airport slot applications. He said that some changes might come along the way as to which airport they will go first.

The airline intends to fly the route using mixed A330-300, A340-300 and B777-300ER aircraft. PAL recently acquired four A340's ex-Iberia planes and intends to add two more to the existing fleet for destinations in Europe. Another new B777's is scheduled for delivery in November 2013.

The European Union (EU) on Wednesday announced the partial lifting of the blacklist imposed on Philippine carriers in 2010, opening the way for the resumption of flights by Philippine Airlines (PAL) to Europe, effective July 12.

Westward Bound

EU Updates Safety List of Banned Airlines

10 July 2013

Brussels

The European Commission has updated today for the 21st time the European list of airlines subject to an operating ban or operational restrictions within the European Union, better known as "the EU air safety list". 

Following improvements in the safety situation in the Philippines, Philippine Airlines is the first airline from this country allowed back into European skies since 2010. 

The same is true for the Venezuelan airline Conviasa, which was banned in 2012. Progress was also noted in Libya but the Libyan authorities agreed that Libyan airlines would not be allowed to operate in Europe until they are fully re-certified to the satisfaction of the European Union.

Siim Kallas, Commission Vice-President responsible for transport, said: "The EU air safety list was created for the protection of European skies and citizens, but it can also serve as a wake-up call to countries and airlines in need to get their safety house back in order. Today we confirmed our willingness to remove countries and airlines from the list if they show real commitment and capacity to implement international safety standards in a sustainable manner. Beside Philippines, Venezuela and Mauritania, good signs of progress are also coming from a number of other African countries."

The new list replaces and updates the previous one, adopted in December 2012, and can be consulted on the Commission’s website¹.

Taking into account the improved safety oversight provided by the competent authorities of the Philippines, and the ability of the air carrier Philippine Airlines to ensure effective compliance with relevant aviation safety regulations, and following an on-site safety assessment visit last June, it was decided to lift the ban affecting this carrier registered in the Philippines. For all other carriers registered in the Philippines the ban remains.

Conviasa, registered in Venezuela, was also removed from the EU air safety list, following the successful resolution of the serious safety deficiencies which led to its ban from EU skies in April 2012. These improvements were proved during consultations with the Commission and the EU's Agency for aviation safety (EASA), and through recent audits performed by Spain and by the International Civil Aviation Organization (ICAO) in Venezuela.

In December 2012 Mauritania became the first country to be fully removed from the EU air safety list, where it was added in 2010. The improvements that led to this decision were verified during an on-site safety assessment visit conducted by the Commission in April 2013. 

Consultations were held with the civil aviation authorities of Libya. Progress was noted by the Committee, but the Libyan civil aviation authorities agreed to maintain the voluntary restrictions applicable to all airlines licensed in Libya. This voluntary restriction excludes Libyan airlines from flying into the EU until when they will be fully recertified in accordance with international safety standards. The on-going implementation of these measures will remain under close monitoring by the Commission and the EU Air Safety Committee.

The Commission also praised the good progress in Sudan as well as in Mozambique.

The Commission recognised the efforts of the safety oversight authorities of the Democratic Republic of Congo, Indonesia, Kazakhstan, Libya, Mauritania, Mozambique, Philippines, Russia and Sudan to reform their civil aviation system and to improve safety, in order to eventually become able to guarantee the effective application of international safety standards. The Commission continues to actively provide support and assistance for these reforms in cooperation with ICAO, EU Member States and EASA.

Further updates to the EU air safety list were due to the removal of some airlines that ceased to exist and the addition of new ones recently created in a number of banned countries: the Democratic Republic of Congo, Indonesia, Kyrgyzstan, Mozambique, Sudan and the Philippines. 

Finally, Annex B of the EU air safety list (which contains carriers allowed to operate in the EU but under strict limitations and conditions) was amended in order to reflect the renewal of the fleet of Air Madagascar (permitted to use an additional aircraft) and of Air Astana from Kazakhstan (the old Fokker aircraft not anymore in use were deleted from the Annex).

Today's Commission decision was based on the unanimous opinion of the EU Air Safety Committee in which safety experts from each of the 28 Member States participate, as well as from Norway, Iceland, Switzerland, and EASA. 

Background information

The updated EU air safety list includes all airlines certified in 20 States, for a total of 278 airlines fully banned from EU skies: Afghanistan, Angola, Benin, Republic of Congo, the Democratic Republic of Congo, Djibouti, Equatorial Guinea, Eritrea, Gabon (with the exception of 3 airlines which operate under restrictions and conditions), Indonesia (with the exception of 5 airlines), Kazakhstan (with the exception of one airline which operates under restrictions and conditions), Kyrgyzstan, Liberia, Mozambique, Philippines (with the exception of one airline), Sierra Leone, Sao Tome and Principe, Sudan, Swaziland and Zambia. The list also includes 2 individual airlines: Blue Wing Airlines from Surinam and Meridian Airways from Ghana, for a grand total of 280 airlines. 

Additionally, the list includes 10 airlines subject to operational restrictions and thus allowed to operate into the EU under strict conditions: Air Astana from Kazakhstan, Afrijet, Gabon Airlines, and SN2AG from Gabon, Air Koryo from the Democratic People Republic of Korea, Airlift International from Ghana, Air Service Comores from the Comores, Iran Air from Iran, TAAG Angolan Airlines from Angola and Air Madagascar from Madagasca.

For more information:

Contacts : Helen Kearns (+32 2 298 76 38) Dale Kidd (+32 2 295 74 61)

PAL In Talks with Emirates & ANA for Tan Shares

July 8, 2013

San Miguel Corporation is in talks with Tokyo-based All Nippon Airways (ANA) and Dubai-based Emirates Airlines (UAE) for a major stake in flag carrier Philippine Airlines (PAL).

“We are now in discussions with ANA and Emirates.” says SMC President Ramon Ang.

Ang said these foreign airlines have expressed interest to invest in PAL and that SMC was open to taking any of them as a partner.

Lucio Tan has put his 51-percent stake in PAL on the block for SMC which has the option of first refusal in the flag carrier. However, only 40% of the Lucio Tan share would be sold to the foreign carrier due to constitutional limitations imposed on public carriers in the Philippines. The remaining 11% would be floated to the stock market to be taken by private investors.

Decision on the partnership agreement could happen “within this year.”

ANA aims to integrate PAL into its "Multi-Brand Strategy" in Asia, while Emirates aims to make Manila its "Bridge to the Pacific".

SMC has history of partnerships with Japanese firms, particularly with Kirin group, a part of Mitsubishi keiretsuin, holding 20% share of SMC, and Nihon Yamamura Glass Co. Ltd. in glass and packaging business.

Meanwhile, Emirates airline, a subsidiary of The Emirates Group, which is wholly owned by the government of Dubai is the largest airline in the Middle East, where majority of Overseas Filipino Workers are deployed. They also have extensive connections in Europe which PAL expects to service soon.

5J Breaks Seoul

July 6, 2013

Cebu Pacific broke grounds yesterday as it flew its first wide-bodied dense class A330-300 service to Seoul, South Korea.

Can Tigerair change its stripes?

4 July 2013

By David Leo
Aspire Aviation

Koay Peng Yen, Group CEO of Tiger Airways Holding said the Singapore-born and bred budget carrier has been creating synergies between all Tigerair airlines in Australia, Singapore, Indonesia, and the Philippines by allowing customers to book connecting flights from any of these carriers. Passengers can connect flights seamlessly in Singapore without clearing immigration or transferring their own luggage.

Budget carrier Tiger Airways has ditched its leaping tiger logo and changed its name to Tigerair. If the proverbial leopard cannot change its spots, is the new Tigerair a different airline?

Changing a name and updating a logo are all part of a corporate game to project a fresh image when the old begins to tire. A whole slew of airlines including Singapore Airlines (SIA), Cathay Pacific, Qantas, British Airways (BA) and United Airlines have done their part molting and face-lifting, the reason most commonly cited being one of keeping up with the times and be contemporary. So, in the words of Tigerair Australia chief executive Robert Sharp, the initiative is part of a bid to bring the airline into a “new era”.

For all that may be said about how the new logo and name embody the key elements of Tigerair’s personality which is “warm, passionate and genuine”, or that according to Tigerair Group chief executive Koay Peng Yen in Singapore they project the carrier’s “commitment towards a better and bolder Tigerair”, the truth is that Tigerair badly needs an image makeover.

The airline has suffered from complaints about flight delays and cancellations, a lack of compassion and poor customer service. Its Australian offshoot, which has not turned in a profitable performance in all its six years of operations, languished under a tarnished image when in 2011, Australia’s Civil Aviation Safety Authority (CASA) grounded its entire fleet over concerns of safety. Tigerair was also beaten by rival Jetstar as the best low-cost carrier in Australia in a recent Skytrax survey. Outside Australia, Tigerair also faces stiff competition from Jetstar as well as AirAsia.

Image Courtesy of James Morgan

One cannot be sure about what Sharp meant when he said of the new Tigerair: “We’re a real airline for real people.” However, he came closest to scratching beneath the surface of the truth when he asserted that the change was “more than just a fresh coat of paint and a new logo” but “the start of the revival of our airline.” Although he was referring specifically to the carrier’s Australian set-up, the change which will entail more emphasis on customer service is as applicable in the wider context of Tigerair’s operations. Clearly more needs to be done as pointed out by critics and sceptics on the internet, that unless the carrier visibly improves its services, the makeover is only skin-deep.

The new Tigerair without its stripes must be a new airline guided by a new service philosophy or the renewed will and sincerity to deliver on promises in order to rein in the competition. If Singapore Airlines were tardy in realising this, Virgin Australia which acquired a 60% stake in the Australian outfit last year and approved by the Australian Competition and Consumer Commission (ACCC) only in April this year found the timing opportune for change. You cannot discount that Virgin’s acquisition might have been the catalyst for the logo and name change to signal a new beginning. Virgin could from now on as a majority shareholder steer the new entity without the trappings and frailty of a damaged past.

Tigerair’s very own experience since inception has shown that having a successful parent is no guarantee of similar success down the line. One must not forget that Tigerair is after all a low-cost carrier that plays by a different set of rules and SIA’s forte is premium travel, when alluding to that relationship.

Interestingly, when Tiger Airways was incorporated in 2003 and commenced operations a year later, many observers thought its leaping tiger logo was an inevitable hark-back to the flying tiger of the old Malayan Airways and successor Malaysia-Singapore Airlines in which SIA claims its roots before Singapore and Malaysia split ways to operate their own flag carriers. Call it nostalgia, perhaps, or a clever ruse to reclaim birth rights. Whether it was deliberate or incidental, for reasons that one could only speculate, it is seldom that one can live the same dream in all its exactitude twice. It is time to construct a new one.

Clark Masterplan Revised

Builds Budget Terminal

July 3, 2013

The Department of Transportation and Communications (DOTC) is revising the masterplan of Clark International Airport (CIA) to include facilities for low cost carrier operations (LCC)s.

The masterplan update will cost the government P160 million for the revisions.

In the revision, a budget terminal will be build next year for completion in 2016 with a price tag of 6 billion pesos.

DOTC said the new budget terminal will be an entirely different structure to look more like Changi Airport in Singapore but linked to the existing legacy passenger terminal building.

The original masterplan for Clark International Airport does not include budget terminal for Manila-Clark as it is fondly called by foreign airline operators.

Low Cost Carrier traffic accounts to 80% of all aircraft movements in the airport according to DOTC Official.

“80 percent of traffic is LCC so there is a need to build a budget terminal,” Jaime Raphael Feliciano, DOTC assistant secretary for Planning and Project Development.

DOTC has allotted P3 billion of its 2014 budget for the construction of the 45,000-square meter budget terminal while another 3 billion will be appropriated in 2015 to complete it.
The budget terminal will hold 4.5 million passengers per year.

Currently, Clark has a legacy terminal with passenger capacity of two million per year.

DOTC said the legacy terminal will likewise be expanded to accomodate a million more possibly under a public private partnership (PPP) program which will see the construction of additional floor space for pre-departure area and one more boarding gate.

Earlier, Clark International Airport Corp. President Victor Luciano proposed the construction of a 10 million passenger terminal building, but his proposal was trimmed down by DOTC for being "too ambitious". 

Legacy carriers Asiana Airlines and Dragonair, are the only full service carriers operating Clark at the moment, but they will be joined later in October by Emirates and Qatar Airways doubling the legacy traffic to 25%.

The rest of the traffic is fed by AirAsia, Cebu Pacific, Seair, Jin Air which are all low cost carriers.

Clark is the fastest growing airport in the country posting passenger traffic of 1.3 million in 2012. It is slated to be the country's third busiest airport this year.