NAIA Auctioned by 2015

29 September 2014

The Public Private Partnership Center says government will auction off the redevelopment, operations and maintenance of the Ninoy Aquino International Airport (NAIA) by the middle of 2015.

Cosette Canilao, PPP executive director, says the agency has already received several consultancy proposals from Nathan Associations and Ernst & Young Solutions, among others.

"We're hoping to bring it up to the National Economic Development Authority (NEDA) board by May next year. Once it's approved, maybe by June or July [2015] we can begin the bidding process," she said.

The consultancy contract will be awarded within the next two weeks. The consultant will conduct a feasibility study for the project, which is expected to begin in November 2014 and end by March 2015.

The NAIA privatization is still subject to approval of the National Economic and Development Authority (NEDA).

"The awarding will definitely happen during this administration and we can accelerate it further so that the implementation will also take place within this administration. This project is urgent as we all know the condition of our main airport," she said.

The project involves the redevelopment of the country's main international gateway, the transfer of the operations of NAIA 1, 2, 3 and 4 and the planned operations of NAIA 5. ABS-CBN News

SMC To Bid T2 Expansion

26 September 2014

Conglomerate San Miguel Corporation (SMC) announced yesterday that they will join the bid for the expansion of Ninoy Aquino International Airport, from third runway construction to Terminal Expansion.

SMC president Ramon S. Ang said there are no complications anymore with respect to their participation in airport projects similar to what happen at Mactan considering that they have relinquish control and participation of the flag carrier.

SMC’s recently sold back the 49 percent of Philippine Airlines (PAL) valued at $1.3bn to the Lucio Tan Group.

PAL operates at Centennial Terminal 2 and Ang is bent on winning its expansion contract with Department of Transport and Communications (DOTC) including Terminal 3 expansion project under the governments Public Private Partnership (PPP) initiative.

SMC was recently awarded the NAIA expressway project leading to the country's premier airport and Ang believes they can have synergy in airport operations. The company was also awarded by the government expansion project and operations of Boracay Airport in Malay, Aklan.

PAL Gets LHR Primetime Landing

Evening MNL Departure begins Winter Sked

26 Sptember 2014

Flag carrier Philippine Airlines (PAL) has been granted morning arrival slot at London's Heathrow Airport by Airport Coordination (ACL) in the United Kingdom, senior company official announced yesterday. 

Ramon S. Ang, outgoing airline President said that their application for morning arrival slot at Heathrow airport has been granted in a letter received Wednesday.

Ang said they have received traded slot for morning arrivals at Heathrow Airport by ACL for winter 2014 schedule which they immediately applied last summer under the offered arrival schedule time frame between 7:00 to 7:59 in the morning. 

PAL will now leave between 11:00pm to 12 midnight to arrive on the allotted time schedule. The airline recently flew this time schedule with a Boeing 777 plane last month.

Ang said evening departure schedule to London from Manila will be implemented in its winter schedule to be announce soon.

The Captain’s Seat

25 September 2014
By Cito Beltran

Ang’s group saw that PAL was using 55% of its revenues for fuel and maintenance above the maximum industry peg of 40%. PAL also had 7 types of aircraft and by the time the SMC group came in, some 16 planes were due for a “D” check or major maintenance work each costing $3 million or a total of $48 million in their first year of management. For 6 months the players computed maintenance, fuel inefficiency and utilization and eventually convinced Lucio Tan and his board to re-fleet and junk 16 planes.

A man who has spent all of his life at work will never be at home anywhere else.

That to my mind was why Mr. Lucio Tan simply had to get back control of Philippine Airlines. Contrary to the many rumors spread by ugly souls about losing face, losing control of businesses and the even uglier lie that commissions were being made from the company’s re-fleeting, Dr. Tan’s angst circled primarily around the proverbial “seller’s regret” and perhaps the discovery that many retirees like him have made: Having all that money can bore you to death.

Ramon Ang must have come to terms that there can only be one pilot and he was not willing to be co-pilot. He realized he could not “fly” PAL to even greater heights if he constantly had to carry the unwanted baggage of envy, distrust and being discredited by a cabal of operators only too willing to give Lucio Tan an excuse to claim back PAL. To quote RSA: “Yung samahan hindi na maganda after the first year.”

PAL was a business challenge, an opportunity to prove that under right management PAL could be better and “It was in the interest of the country’s reputation that the flag carrier looked good.” Ang of course is only too shy to admit that proving his critics wrong and putting his knowledge as a pilot and business guru to the test in aviation has long been in his bucket list of business challenges.

The two parties certainly had a management honeymoon in the first year where Lucio Tan had full control of the Board of Directors but was relieved of some U$300 million in collectibles, labor problems and an airline in the red. In addition to his board, Lucio Tan also had his original managers playing tag with the professional management team of San Miguel.

Given their peaceful coexistence, the San Miguel group quickly went to work to deal with “mistakes” such as Air Philippines directly competing for flights with PAL while posting an annual loss. The subsidiary was suppose to compete with the LCC or Low Cost Carriers but a very independent management went and bit the mother company in the butt by flying same routes, same time and lower rates than PAL.

Then followed the rationalization of aircraft size and design to routes and revenues. Ang’s group saw that PAL was using 55% of its revenues for fuel and maintenance above the maximum industry peg of 40%. PAL also had 7 types of aircraft and by the time the SMC group came in, some 16 planes were due for a “D” check or major maintenance work each costing $3 million or a total of $48 million in their first year of management. For 6 months the players computed maintenance, fuel inefficiency and utilization and eventually convinced Lucio Tan and his board to re-fleet and junk 16 planes.

Reacting to ugly rumors regarding purchases and commissions made on the Airbus planes, Ramon Ang, along with PAL CFO Jorge San Agustin and Mr. Andy Lee, who personally headed the study and negotiations for the new aircraft categorically denied such possibilities and backed this up with a certification and challenge from no less than Airbus for anyone to come forward and show proof. Apparently the entire process went under the magnifying glass of Lucio Tan and the Board and it was Lucio Tan who signed on the dotted line.

The management team also debunked claims that Lucio Tan felt insulted because the new management had stripped Tan and his family of long held businesses supplying PAL. Apparently the Tan group continued to hold on to engineering and maintenance contracts, Macro Asia ground handling, personnel staffing, Sky logistics check in and kitchen as well as being entitled to airline privileges that were not even enjoyed by Ang or his executives on their watch.

Rumor has it that at one point Lucio Tan had offered to sell out his shares, then changed his mind and offered to buy back SMC’s shares in PAL, but the white knight of the LT group bailed out. Then SMC was offered to buy out Lucio Tan until someone from the LT group suspected the entry of PAL into a code sharing agreement with Etihad Airlines as the first step into the eventual entry of Etihad as partner to replace the Lucio Tan group.

Rather than being cooked in their own fat, the LT group figured it would be smarter to buy out SMC and bring in Etihad whose investment can refund Lucio Tan’s expense while giving him control of an airline back in the black and tied up with a strong partner in the Middle East.

Question is: will Etihad come in with the necessary investment? If not, Tan’s only hope would be to convince Manny Pangilinan to be a white knight or turn to his contacts in Mainland China for financing. Any of the 3 options must happen because PAL will soon need added capital to pay for their planes for 2015 and 2016, that bill will be due in 90 days. According to the SMC team, the loan that Mr. Tan took out from BDO is just bridge financing also collectible in 90 days. In other words, after borrowing a lot of money, PAL and Mr. Tan will be needing even more to move forward or else it will eventually bring back the airline to square one.

Even worse if the LT group fails to cover the BDO loan, it could cost them control of PNB which covers the loan, while losing out to Lance Gokongwei whose airline Cebu Pacific could gain dominance all over again. As for SMC, the company apparently did not make money on the sale and were ecstatic to get their money back and get out of the Captain’s chair because the PAL overhaul distracted SMC management from concentrating on its core businesses.

The happy ending is that PAL has made money in the last 5 months, safety and maintenance standard of PAL is at industry level, the re-fleeting and purchase of Airbus planes solicited the indispensable support of Airbus so PAL could fly into Europe as well as the US once again and the country’s flag carrier now flies proud. That’s certainly Mission Accomplished for San Miguel and for Ramon Ang.

PAL A321 Orders Sold To GECAS

25 September 2014

Shannon - Flag carrier Philippine Airlines has sold two of its A321 aircraft (RP-C9910, RP-C9911) to Ireland based lessor GE Capital Aviation Services Limited (GECAS) under purchase-and-leaseback deal with Philippine Airlines involving two of its new Airbus A321 aircraft.

MIAA Integrates Terminal Fee on Tickets For International Departures

Integration Program begins October 1

23 September 2014

Passengers departing the Ninoy Aquino International Airport (NAIA) for international destinations will no longer be required to pay and queue up terminal fee starting October 1 next week, MIAA said this morning.

Manila International Airport Authority (MIAA) operates NAIA airport in the Philippine capital.

MIAA said the ₱550 international passenger service charge or terminal fee will be integrated into the cost of the airline ticket at point of sale in the Philippines.

Airline tickets bought abroad will not be covered by the regulation and will still be paid at the payment kiosk of the terminal.

The following are exempted from paying terminal fee:

1. Overseas Filipino Workers (OFW), who have a certification from the Philippine Overseas Employment Administration;
2. Pilgrims endorsed by the National Commission on Muslim Filipinos, and the Catholic Church for pilgrimage to the Vatican and Israel;
3. Athletes endorsed by the Philippine Sports Commission
4. Other travelers authorized by the Office of the President, such as government officials and employees on official travel abroad.

When legally exempted, payment of terminal fee could be refunded at NAIA if the paying passenger can present the overseas employment certificate, electronic tickets bought in the Philippines, boarding pass, and MIAA exemption certificate.

MIAA said the "terminal fee" they collected is used for the airport operations and maintenance broken down as follows; ₱390 for maintenance and upkeep,  ₱100 to the national treasury and  ₱60 for aviation security. Security Development Charge of ₱200 has been removed after collection of the said fee expired.

International Terminal Fee integration is made applicable to departures from Mactan-Cebu International Airport, and Clark International Airport. Airports except Kalibo and Iloilo airports which will be covered by a separate regulation later.

Terminal fee for domestic flights was already incorporated in domestic airline tickets since August 2012.

SMC lost money on PAL investment

Airline will need $2B from new partner
By Daxim L. Lucas

“If we fought over it, it would destroy the value of PAL,” SMC president Ramon S. Ang on PAL

San Miguel Corp. did not make a profit on its investment in Philippine Airlines (PAL) despite having turned around the moribund flag carrier during the two years when the diversified conglomerate was running the firm.

In fact, SMC president Ramon S. Ang said yesterday that the conglomerate—the country’s largest business group in terms of asset value—did not even break even on its PAL venture owing to its failure to recover its cost of funds.

“SMC lost money in this deal,” he said, breaking his silence for the first time since the airline was reacquired by tycoon Lucio Tan—its former controlling shareholder —two weeks ago.

Ang said he was willing to forego a long drawnout negotiation process with Tan because it was in danger of turning hostile, with frustration on both sides running high after a year of flip-flopping decisions by PAL’s former owner.

All told, the SMC group invested $1.36 billion in PAL—an amount Ang recovered, minus the interest that he should have charged for it over two years.

“If we fought over it, it would destroy the value of PAL,” he said, adding that adopting a hardline negotiating stance would result in a “lose-lose” situation for both sides and eventually erode the value of both tycoons’ holdings. “So I agreed to sell.”

Ang described the poor state of the airline’s finances when he assumed its presidency in 2012 after a $500-million deal with Tan gave SMC 49 percent of the airline, including management control.

He said that, on average, airlines spend 40 percent of total revenues on fuel and maintenance costs.

However, for PAL, which was saddled with older, gas-guzzling aircraft, fuel and maintenance expenses were as high as 55 percent of revenues when SMC came in. It was at this point when the new management decided to embark on a massive refleeting program and ordered a fleet of newer, more fuel-efficient planes from European plane-maker Airbus.

It was also at this point when allegations surfaced that Ang was supposedly earning commissions from PAL’s refleeting program. In response, Ang released a certification issued by Airbus upon his request to debunk the rumors.

“Both parties hereby represent and warrant that they have not paid, agreed to pay, authorized the payment of or caused to be paid, directly or indirectly in any form whatsoever any commission, percentage, contingent fee, brokerage or other similar payments of any kind, in connection with the establishment or operation of the agreement [to purchase 54 new aircraft] to any employee of the other party or to any person or entity in the other party’s country or elsewhere,” said Airbus senior vice president Cristophe Mourey in a July 23, 2012, letter to PAL.

“I don’t have the heart to make money from PAL,” Ang said, responding to allegations of profiting from aircraft orders.

Asked about the airline’s prospects going forward, Ang said it would be crucial for Tan to bring in a strategic partner to help buttress PAL’s books.

“Assuming the strategic investor would need to bring in $1 billion in equity, they would need up to $1 billion more for the airline’s working capital and to pay for aircraft deliveries in 2015,” he said. “So the new partner needs around $2 billion.”

The SMC chief said that he has effectively relinquished control of the airline since Sept. 15, describing his two-year stint at PAL’s helm as “mission accomplished.”

“We improved the image of the country overseas, we restored the airline’s profitability and we got the country taken out of the blacklist of both Europe and the US Federal Aviation Administration, with a lot of help from Airbus,” he said.

The San Miguel chief also said there was no truth to rumors that Philippine Airlines, under his watch, terminated all the privileges and benefits previously enjoyed by members of the Tan family and business group.

In fact, all contracts of Tan-owned firms with the airline continue to this day, including several contracts for MacroAsia and its maintenance joint venture partner Lufthansa Technik.

Ang said the only privilege that could perhaps remotely be considered an affront to the 80-year-old tycoon was the change in policy regarding the business class seats automatically reserved for Tan group members.

Previously, PAL kept two business class seats on all flights vacant, just in case the tycoon needed to hop onto a plane to any of its routes on short notice. When Ang was put in charge, he asked the Tan group that these seats be freed up because of the missed revenue opportunities. But they agreed that these seats would still be made available to Tan if he gives advance notice.

“That’s the only change in the benefits they enjoyed,” Ang said. “Everything else was the same.”

NAIA Radar Knocked-Off By Typhoon

19 September 2014

Flights at Ninoy Aquino International Airport went haywire early this morning after its radar was knocked down by torrential rains causing disruptions of flights in and out of Manila.

The radar facility in Manila went off around 3:50am after heavy downpour was reported at the airport premises. Affected flights were China Eastern arriving from Shanghai which was diverted to Cebu, and Jetstar Asia from Singapore which was diverted to Clark after reporting poor visibility of runway which also aggravated conditions at the airport. The lists is not exhaustive. PAL flights from San Francisco and Los Angeles managed to land the plane before radar went off.

CAAP said NAIA runways are available only using Area Navigation (RNAV) operations which require greater flight separations between landing and departing aircraft, strict pilot awareness and maintenance of the procedure center-lines as airport controllers are blind as to the exact whereabouts of aircraft which cause limited communication between tower, approach, and the pilots.

Manila Airspace restrictions includes curtailment of aircraft movements in the air limiting number of aircraft movements under ATC control to 11 arrivals and 11 departures per hour from the usual 30 to 35 flights. General aviation (Gen-Av) flights is likewise suspended from using NAIA complex other than flight emergency.

Immigration system at NAIA also went off line last night causing long queues at the airport before it was brought online 3 hours later. Please standby for more updates when they become available.

Radar facility is expected to be repaired by 12noon, but bad weather is hampering repair works.

A400M Offered To The Philippines

19 September 2014

A pair of brand new Airbus A400M Transport plane has been offered by the French Government to the Philippines for disaster relief. The offer was made by French President Francois Hollande at Palais de l’Elysee in Paris to President Aquino Wednesday as it signed updated bilateral Defense Cooperation Agreement (DCA) with the Philippines. 

No further details are available. But sources in Paris said that sale could be in the form of Official Government Assistance (ODA) from the French government financing the acquisition of the aircraft similar to the Rosenbauer firetruck purchases which was secured via loan grant from the Austrian government. 

The Philippines-France Defense Cooperation Agreement was signed by Defense Secretary Voltaire Gazmin and French Minister of Defense Jean-Yves Le Drian.

“The Philippines is in the process of modernizing our armed forces and improving our defense capability, and we believe that France will be a reliable partner in this regard,” Aquino said in a Press release.

Pierre Jaffre, Airbus executive vice president for Asia Pacific said said that it sees the possibility of selling its €150 million A400M military transport plane to the Philippine military. If approved, the Philippines could be the second country in ASEAN after Malaysia to order the aircraft. The Philippines operate a fleet of 5 refurbished C-130 aircraft for disaster relief.   

PAL Upgrades Wireless IFE

First Airline Again To Use OnAir Plug 

“There is no question that wireless IFE is working for our passengers.”  Ramon Ang.

18 September 2014

Flag carrier Philippine Airlines (PAL) has upgraded its OnAir wireless IFE and Connectivity services that will be installed on all new generation bi-class A330-300 as well as six of its Airbus A340 aircraft.

“All the long-range aircraft will therefore be equipped with OnAir’s full IFEC package of mobile phone and Wi-Fi services, and wireless IFE”, says outgoing PAL President & Chief Operating Officer Ramon S. Ang in a statement this morning.

Full OnAir suite has already been installed on all B777-300ER fleet of PAL  which are deployed on the airline's long haul route network.

The low cost OnAir Play was first introduced on board PAL in May this year which includes the new monoclass A330's, becoming the first airline to be installed with Wireless IFE services by OnAir, a Geneva based company.

OnAir launched in 2005, is the leading provider of in-flight connectivity services.

“Through PAL’s iNAiR offerings, passengers can now select from an array of movies, television programs and music thus enabling them to customize their inflight entertainment” says Ang

“Passengers’ response to being able to use their own phones, tablets and laptops for both IFE and connectivity has been overwhelmingly positive. Adding OnAir Play to more aircraft was an easy decision.”  adds Ang about the upgrade.

“While we are very much aware that we are breaking new ground by not having traditional embedded IFE on the brand new A330s, there is no question that wireless IFE is working for our passengers.”  Ang said.

Ramon Ang will remain President of PAL until the end of October 2014.

PAL has been very satisfied with OnAir product that it is installing the full IPEC package, including the latest product innovation, the OnAir plug on its new aircraft.  

“There is no better proof of an airline’s confidence in your products than a follow-on fleet extension order within such a short timeframe,” said Ian Dawkins, CEO of OnAir. 

OnAir Plug is a new product that provides inflight Internet access for the airline itself over a secure dedicated wireless network. 

By using OnAir Plug to exchange real-time data between cabin crews and the ground, airlines can optimize their inflight and ground operations.

OnAir Plug is agnostic, neutral and secure: the wireless network can be accessed by any Wi-Fi enabled device and supports all crew member applications.

“This is the first major step in unleashing the full potential of the e-Aircraft,” adds Dawkins.

Dawkins said that Philippine Airlines is the launch customer for their OnAir Plug product. 

“It is the first airline in the world to provide mobile phone, Wi-Fi and wireless inflight entertainment for their passengers. The airline now has access to a range of services previously unavailable to the crew” says Dawkins.

Iberian A340 Returns Home For A Visit

 As PR1 Arrives Spain

14 September 2014

RP-C3435 (sn302,ex EC-HDQ) Arrives at 7:10AM in Madrid's Torrejon Airport bringing the President of the Republic of the Philippines on the first leg of a week-long Official State visit to mainland Europe. It will then fly to Belgium and then to Paris and Berlin later in the week. 

Aquino’s visit to France will be the first for a Philippine head of state since 1994. The President chooses Spain as his first itinerary to Europe considering the shared history and cultural heritage between the two countries.The Philippines is also the only country that receives Official Development Assistance from Spain.

5J To Take Unused PR Slots to OZ

13 September 2014

Low-cost carrier Cebu Pacific (CEB) declared today that they will take the unused slots of Philippine Airlines (PAL) to Australia after it failed to provide additional services to four major airports there. 

PAL recently withdrew flight applications to Perth and Brisbane airports originally planned for October and lately moved to November until it was eventually stricken off from Airport Coordination Australia database.

Cebu Pacific said PAL has been blocking them from using some of its unused slots which prevent the airline from providing daily services to Sydney.

The airline operates the densest A330 in the world from Manila initially operating four times a week that will increase to five flights a week beginning December 10.

Gary Kingshott, Chief Executive Adviser of Cebu Pacific said they will take that option before requesting for expansion of Air Services with Australia that would allow them to fly double daily flights to points in Sydney and Melbourne. 

“We believe there is great potential for this route. It’s only been served by two legacy carriers, the fares have been very high, more than $1000.’’ Mr Kingshott said. 

Qantas and Philippine Airlines served Sydney-Manila route. Kingshott added that with their new service CEB offers tickets 35 per cent cheaper than its rivals with year-round all-inclusive fares starting at $335.

The Air Services Agreement with Australia provides 6000 seats a week from Manila covering the airports in Sydney, Melbourne, Perth and Brisbane. Flights to Darwin and Between Cebu, Davao and Clark remains unrestricted. Of the 6000 seats available PAL held 4000 of which 2058 are currently utilized while CEB was awarded 2000 seats.

The airline operates the densest A330 in the world at 440 seats from Manila initially operating four times a week that will increase to five flights a week beginning December 10. 

Kingshott said that with the five flights they have in December they are constrain to carry only 400 passengers per flight to Sydney, 40 less than its aircraft passenger capacity, and with the unused PAL entitlements getting 1000 of that could make their flight go daily.

Australia is serviced by another less dense variant of its A330 holding 436 passengers that also flies to Kuwait and Saudi Arabia.

PAL Upgrades Vladivostok, Flies Khabarovsk in October

Opens Moscow Charters in January

12 September 2014

Philippine Airlines is upgrading charter services to the Russian far east by flying Airbus A321-200 jets from the existing A320 service to Vladivostok beginning October this year. The airline will also introduce new charter service to  Khabarovsk from Kalibo using A320 aircraft. Charter services for  Vladivostok remains at one flight per 10 days while new services to Khabarovsk will be flown every 14th day. Meanwhile, the flag carrier is also introducing regular charter flights From Manila to Moscow in January next year once a week using a mono-class Airbus A330-300 aircraft.

PAL Defers Delivery of A330's

11 September 2014

Philippine Airlines (PAL) has deferred delivery of its Airbus A330-300 aircraft order from Airbus S.A.

The affected frame (1553, RP-C8764) was scheduled for delivery on August 28 when the airline announced there will be delay to its acceptance due to change in corporate leadership.

No further information is made available as to the status of other aircraft orders. There are four remaining A330 frames yet to be delivered to the airline after it cancelled the other five in February.

Earlier this week San Miguel Corporation (SMC) agreed to sell back the airline to its previous owner, the Lucio Tan group for more than US $1 billion.

SMC owns 49 per cent of PAL Holdings which in turn controls about 90 per cent of Philippine Airlines and 100 per cent of its low cost subsidiary Air Philippines. 

PAL Cancels Planned B757 Service To Australia

11 September 2014

Philippine Airlines has cancelled plan Australian expansion to Perth and Brisbane slated to start operations in November after the airline cancelled the lease contract for five B757 aircraft meant for the Australian market. The cancellation was made two days after the Lucio Tan Group bought back the flag carrier from San Miguel Corporation. Existing flights to Darwin and Brisbane remains unaffected and will be upgraded to A321 service starting December 8, 2014. Meanwhile, Melbourne expansion plans is expected to be announce soon.

SM Rules Out Running PAL

11 September 2014

By Jenniffer B. Austria

The SM group emerged as the biggest financier to billionaire Lucio Tan’s move to regain control of flag carrier Philippine Airlines, but a top executive said the conglomerate has no interest in venturing into the airline business.

“They have been long- time client of ours. It’s about supporting a valued client,” SM Investments Corp. vice chairman Tessie Sy-Coson said at the sidelines of Asean Business Awards Tuesday afternoon.

Sy was responding to queries on why BDO Unibank Inc., the conglomerate’s banking unit, decided to help Tan buy back a 49-percent stake in PAL owned by San Miguel Corp.

Bloomberg on Tuesday reported that Tan, the Philippines’ second-richest man, pledged shares in his companies to secure a loan from four banks to fund the acquisition of San Miguel Corp.’s stake in PAL.

Tan pledged shares in LT Group Inc., Philippine National Bank and real estate assets to secure a $750-million loan from BDO Unibank Inc., China Banking Corp., Philippine National Bank and Asia United Bank.

Sy, who is also the chairman of BDO, did not disclose the exact amount of loan which BDO and Chinabank provided to the Tan group and the value of assets Tan pledged in exchange for the loan.

Sy, however, said the value of assets collateralized by Tan represented the same amount of loan provided by the group.  She said the company was not interested in sitting in the board of PAL, despite providing the biggest loan to Tan group.

Share price of BDO on Wednesday closed at P94.50, down 0.3 percent while stock price of Chinabank gained 0.2 percent to close at P55.10 apiece.

San Miguel Corp. agreed to sell back its holdings in PAL to Tan, two years after the nation’s largest company took management control and led the carrier’s return to Europe.

San Miguel and Tan’s group signed an agreement Monday, San Miguel president Ramon Ang said in a text message.  The deal is valued at $1 billion and requires Tan to meet certain conditions within a week.

However, Sy did not disclose the loan amount extended by BDO and Chinabank to the Tan group, as well as the value of assets Tan pledged in exchange for the loan.

Sy also said they were not interested in getting a seat in the PAL board.

From SMC to SM?

Lucio Tan Group Buys Out SMC

9 September 2014

The Lucio Tan Group has signed on Monday a $1.3 billion deal to buy back in cash the 49-percent stake in Philippine Airlines (PAL) from conglomerate San Miguel Corporation. Payment is expected within this week.

The buy back deal is financed mainly by Banco de Oro (BDO) and China Banking Corporation (CBC), the banking arm of the Shoe Mart Group of companies (SM Group) belonging to family patriarch Henry Sy. 

The syndicated loan amounts to $850 million secured from BDO, China Banking, Philippine National Bank (PNB) and Asia United Bank (AUB). The rest of the buy back money amounting to $400 million will come from the Lucio Tan Group of Companies.

The buy back deal covers the $500 million capital infusion at PAL in exchange for SMC’s 49-percent stake in PAL Holdings as well as cash advances to Airbus S.A. to the tune of $700 million made by San Miguel for the flag carrier’s A330, and A321 aircraft orders for its refleeting program.

CEB Arrives Land Down Under

9 September 2014

Low cost carrier Cebu Pacific has launched its first non-stop flight to Sydney, Australia early Tuesday morning.

The airline operates four weekly flights between Manila and Sydney, every Tuesday, Thursday, Saturday and Sunday with flights departing Manila at 12:15 a.m. arriving Sydney at 10:05 a.m. The return flight departs Sydney at 11:35 a.m. and arrives Manila at 5:30 p.m. It will add Wednesday flight starting December 10, 2014.

5J Announces Dammam, Riyahd by October

5 September 2014

Low Cost Carrier Cebu Pacific will start flying to Riyahd and Dammam in the Kingdom of Saudi Arabia beginning 1 and 4 of October 2015 respectively, thrice a week using the monoclass Airbus A330-300.  

Cebu Pacific will fly to Riyadh every Wednesday, Friday and Sunday, leaving Manila at 5:55 pm and arriving in Riyadh at 10:35 pm. Meanwhile, flight to Dammam departs Manila every Monday, Thursday and Saturday at 9:55pm, and arrives in Dammam at 2:40am the next day. The return flight will depart Riyadh at 12:45 a.m. every Monday, Thursday and Saturday, and will arrive in Manila at 3:40 p.m., while the return flight departs Dammam every Tuesday, Friday and Sunday at 4:10am, and arrives in Manila at 6:35pm. 

The airline earlier flew to Kuwait City in September 3 and  is slated to launch flights to Sydney, Australia on September 9, 2014.

Kuwait Welcomes Cebu Pacific

5 September 2014

Cebu Pacific is welcomed at Kuwait Airport on its inaugural flight to Kuwait, its second destination in the middle east. 

The airline flies 3 times a week departing at 9:30PM (Manila time) arriving in Kuwait at 3:10AM (Kuwait time) every Tuesday, Thursday and Sunday. 

Flights from Kuwait to Manila depart at 4:40AM (Kuwait time) and arrive in Manila at 7:20PM (Manila time) every Monday, Wednesday and Friday.

The airline will operate this route using monoclass Airbus A330-300. It is the only Philippine-based carrier that operates to Kuwait.

CEB operates a fleet of five A330 for regional destinations.

Tacloban Closes Airport for Baby Airbus

5 September 2014

The Civil Aviation Authority (CAAP) was forced to close Tacloban airport due to safety concerns particularly the disingrating asphalt overlays in the airports runway which causes hazard to landing and departing aircraft. 

The closure started Wednesday until Thursday where debris and overlays where removed from the runway and is going to be replace by thicker asphalt overlays. 

CAAP said the speedy wear and deterioration to runway was caused by heavy use of US Air Force C-17 aircraft landing multiple times at the airport after typhoon "Haiyan" (Yolanda) to deliver relief aids. 

Tacloban Airport runway pavement rating (PCN) is not sufficient to handle the weight of the massive 265T cargo plane which is only cleared for airbus A320 operations with weight of 78 tons.  A320 aircraft is heavier than C-130 plane.

The runway repavement will run for four months until December and repair work is expected to be completed by 3 December. 

Aviation regulator is closing the runway to heavier aircraft because the existing stripped runway cannot accommodate the weight of A320 aircraft and forced use might lead to further deterioration of the runway cement base. 

Zamboanga International Airport (ZIA) also suffered the same damage to the airports runway after USAF C-17's regularly deliver cargoes at the airport in support of the military contingent of the US forces operating in Zamboanga. Repair and runway upgrading works at ZIA was mostly funded by the US government.

New York on March 15

1 September 2014

Philippine Airlines has officially announced that it will begin flights to New York beginning March 15, 2015 four times a week initially with A340-300 aircraft. The flight route to New York will be via Vancouver in Canada, the same route the airline last flew in 1997. It will however be the first time for the flag carrier to fly to New York's John F. Kennedy airport as it docks at Terminal 1. This story was first reported on this blog on April 11, 2014. You can read the story here. Special thanks to the contributors.

PAL Expands Cebu Hub

 Adds Nagoya Service

1 September 2014

Flag carrier Philippine Airlines (PAL) will expand its Cebu hub by adding new flight services to Nagoya effective December 14. It will be flown by new A321 ordered from Airbus in 2012. 

The airline expects to operate this route 3 times a week initially under the following schedules: 

PR480 CEB0910 – 1440NGO 321 236
PR479 NGO1540 – 1930CEB 321 236

PAL flies twice daily to Tokyo Narita, and Seoul from its hub in Cebu.