DOTR To Ground PAL

Owes the Philippine Government ₱7 Billion in Fees and Charges

27 September 2017

The Department of Transportation (DOTr) is taking legal action against Philippine Airlines (PAL) if the flag carrier fails to settle almost ₱7 billion in unpaid “navigational fees and other charges” in the next 10 days.

DOTr said that PAL owes the Civil Aviation Authority of the Philippines (CAAP) ₱6.594 billion as of December 2015. The flag carrier also has a separate overdue account of ₱370,583,588.96 for January - July 2017 alone.

Meanwhile, PAL also owes Manila International Airport Authority (MIAA) ₱322,112,385.00, as of 26 September 2017.

"Final demand for full payment of all unpaid charges has been sent to PAL, preparatory to the filing of appropriate legal action in order to protect the interest of government," the DOTr said in a statement.

DOTr said that aside from the collection suit PAL will not be permitted to use the facilities of Manila International Airport, its main hub. The airline will not be also permitted to fly for failure to pay air navigational fees and other charges.


"Pay up or prepare to be grounded" - Duterte
In a speech at the Philippine Constitution Association on Tuesday night, President Rodrigo Duterte has warned business tycoon Lucio Tan, chairman and chief executive officer of Philippine Airlines, to settle his liabilities with the government in 10 days or he would shut down Terminal 2 of the Ninoy Aquino International Airport (Naia).

Aeronautical Fees are supposed to be remitted to the General Fund in the National Treasury to be used for the maintenance and operation of other international and domestic airports in the country, in accordance with Section 3 of E.O.No. 298 dated July 26, 1987.

Duterte said the money could already have been used in the completion of much delayed airport projects in Tacloban and Bicol had PAL paid for their dues.

The President said he don't care if plenty of passengers would be inconvenienced in PAL's grounding.

“We have to enforce the law.if you are put into a great discomfort, sorry. Wala akong magawa. The law is the law. It is the law,” Duterte explains.

DOTr earlier told PAL to “settle your obligations in 30 days, otherwise, we will be constrained to do all that is necessary to protect the interests” of the state. It was amended later to 10 days by order of the President.

The transport department confirmed that PAL had negotiated to settle its growing unpaid fees in seven years but the request was denied telling the airline to pay the fees in full like any other airline would.

PAL said it has received demand letters from CAAP as early as August 2016 to settle unpaid navigational charges “in the amount of ₱6.63 billion” and that it was seeking a compromise settlement. It already settled ₱370 million out of these unpaid charges.

“This issue on alleged unpaid navigational charges involves complex legal issues which PAL has been trying to thresh out with the Authority for years,” PAL Spokesperson Cielo Villaluna said.

Villaluna said it already submitted an offer to the CAAP through its inter-agency panel of negotiators under CAAP Authority Order 149-17, but has not received a response just yet.

The airline is offering to pay the government ₱4 billion in seven years to finally settle the issue on unpaid navigational charges.

"We look forward to meeting the negotiating panel and we are ready to submit a Compromise Agreement to settle this issue once and for all," PAL added.

CAAP said it has unpaid accounts from PAL amounting to ₱6,965,146,149.63 as of July 30 2017. Of this amount only P3.6 billion of the P6.91 billion being demanded by CAAP is backed by invoices while the rest is unsubstantiated claims.

Why it Grew So Big?
DOTr disclosed that landing and parking fees has not been paid by PAL since its privatisation and occupation of the Ninoy Aquino International Airport (NAIA) Terminal 2 in 1998.

PAL is supposed to pay the government ₱803 million per year for the exclusive use of the terminal but wasn't paying because there was no lease contract executed between MIAA and the airline.

PAL was owned by the government until 1996 when it was fully privatised. The airline enjoyed tax privileges and fee exemptions prior to its privatisation in 1992 as a government owned airline. It went into bankruptcy and rehabilitation in 1999. It was allowed one year free-use of the terminal and free navigational fees by then President Joseph Estrada as government support for its rehabilitation efforts.

In 2002, the Department of Justice said Philippine Airlines is no longer exempt from payment of aeronautical fees to the Manila International Airport Authority (MIAA) and was sued for payment. In 2007, the Court of Appeals upheld a compromise deal between MIAA and PAL for the settlement of P2.93 billion in unpaid aeronautical fees to be paid in tranches for seven years. Until now this settlement deal has not been fully paid by PAL contrary to their earlier made commitments which got the ire of President Duterte.

The Transport Department also said that PAL wanted to use Terminal 3 all to themselves in 2005 prior to the move of Cebu Pacific and Air Philippines to use the terminal but the request was denied by MIAA because it had a pending ₱5.1- billion unpaid fees owed to the airport owner.

PAL Grows Cebu Hub More

Opens Bangkok and Beijing

 23 September 2017

Philippine Airlines will open Bangkok and Beijing from Mactan Cebu beginning December 2 for thrice a week flight on the A321-200 every Tuesday Thursday and Saturday, while Beijing will be added once a week starting November 4 and every Saturday thereafter with A320-200.

Growing Back Middle East
PAL also announced that it will be resuming the thrice weekly service between Manila and Abu Dhabi from October 31 as bi-class A330 becomes available to the airline. It will also introduce business class services and additional flights to Dammam.

PAL President Jaime J. Bautista said the flag carrier will provide a bi-class (business and economy) service across all its Middle East routes coupled with free internet and wireless IFE services to improve its product offer. Seven A330-300s will be deployed for this route.

The airline currently operates 30 flights per week to the Middle East flying daily for Dubai and Riyadh as well as five times weekly flights to Dammam, four weekly flights to Kuwait, and Doha, and thrice weekly flights to Jeddah.

PAL said it will be operating 33 weekly nonstop flights to seven destinations in the Middle East by December 1.

PR 8114, Anyone?

23 September 2017

PAL Flies Puerto Rico

There is no such flight number for the flag carrier. But on September 18, 2017 Philippine Airlines (PAL) went to Luis Muñoz Marín International Airport in Puerto Rico from Manila with technical stop at San Francisco international airport loaded with relief goods and supplies for the Filipino victims of hurricane Irma. 

The technical stop was also made for the Emergency Response Team from the Philippine Embassy in San Francisco together with airline personnel to board the plane heading to Puerto Rico to help facilitate repatriation of Overseas Filipino Workers (OFWs) working in the Caribbean islands chain who would be traveling back to the Philippines on the chartered PAL aircraft.

The A340-300 plane was no stranger to San Juan, its capital, as it regularly flew with Iberia to Madrid before it began another life in the far east. On Monday it visited the place again as PAL flight PR8114 (RP-C4338) chartered by the Philippine government for repatriation of some 200 OFWs working in the British Virgin Islands and Netherlands Antilles.

However, only 90 Filipinos were able to board PAL flight PR8115 on Tuesday as the airline were directed to depart early.

PR8115 was expected to leave on the evening of September 19 together with twenty two more Filipinos from Sint Martin but were left behind after the Philippine government received advisory from Puerto Rican authorities Tuesday morning to leave early after radar reports showed the island to be in the direct path of Hurricane Maria another category 5 storm barely six hours away from hitting San Juan. It left San Juan at 11am and waited for the rest of the repatriated passengers in San Francisco before heading back to the Philippines.

A total of 132 OFWs from the British Virgin Islands, Sint Maarten and Anguilla were airlifted back to Manila on September 20 from San Francisco via PR 8115 which landed at Terminal 2 around 9:00pm.

"We praise and thank God for the successful rescue and repatriation of our hurricane-stricken kababayans from the Caribbean," Foreign Affairs Secretary Alan Peter S. Cayetano has said from New York.

PAL Flies Toronto Direct

Opens Up Chicago, Houston, and Seattle 

15 September 2017

Flag carrier Philippine Airlines (PAL) said that it will fly direct flights to Toronto again beginning December 16 four times a week using B777-300ER aircraft five years after flying direct on November 30, 2012.

PAL President and Chief Operating Officer Jaime Bautista disclosed that they are also in the final planning stage for route expansion to the United States with Chicago and Houston added to its international network via Vancouver using Boeing planes. Chicago will be flown 4 times a week while Houston will have thrice a week service.

Meanwhile, direct flight from Manila to New York and Seattle will also be added to its international network beginning summer of next year with New York flown by A350-900 in June, while Seattle will be added sometime on the last quarter of next year.

“The Airbus A350 is our new ultra-long-range flagship, a 295 seater wide-body airplane that will help us link the Philippines nonstop to Toronto, New York, Chicago, and other east board points in North America,” Bautista said.

Bautista added the airline is just waiting for final regulatory approvals from the US DOT before making official announcement for the new routes.

PAL Discloses A321NEO LR Routes

PAL would also be adding international points to Australia, Japan and India says Bautista with its new Airbus A321 NEO and long-range (LR) variant aircraft slated for delivery in 2018 and 2019, respectively, with the LR version all destined for Australia and India operations.

Bautista said that they will be launching nonstop services to Brisbane, Cairns, Delhi, Perth, Mumbai, and Sapporo, while flights to Melbourne and Sydney will be increase to daily and twice daily services, respectively with the A321LRs arrival in 2019.

The Airbus A321LR NEO sits 206 passengers and has a range of 4000 nautical miles enabling it to fly as far as Melbourne in Australia with cargo payload revenue.

The airline will receive two more B777 aircraft in December 2017, six A350-900LR beginning June 2018, all for flights to North America and Europe. As to its narrow-body fleet, PAL will receive twenty one A321NEOs beginning January of 2018, while 6 LR variant is slated for delivery at the second half of 2019.

Lallo Airport Owner Wants Expansion

13 September 2017

Cagayan Economic Zone Authority (CEZA) is proposing to expand Lallo airport by unveiling plans to update its 20-year old master development plan says its Administrator.

The ₱1.67-billion airport complex, a joint venture between CEZA and Cagayan Land, was opened to the public in 2015 amidst CEZA funfare of scheduled flights but to this day has not receive any domestic airlines operators nor locators.

Airport construction was started in 2009 and was inspected and tested by the Civil Aviation Authority of the Philippines (CAAP) in 2013 as ICAO compliant. It was opened for commercial traffic in 2016 after completion of the Passenger Terminal Building and securing aerodrome license.

CEZA Administrator and CEO Raul L. Lambino however said that there is strong demand by foreign investors of this airport ranging from aviation schools, charter flights, to aircraft maintenance and repair overhaul (MRO) operations.

Lambino earlier disclosed that they are all set to inaugurate maiden flight in August 26 between Macau and Lallo on daily basis but has since postponed before the end of the year.

This was however the same pronouncement made by its previous administrator in 2015 announcing Philippine Airlines and Cebu Pacific flights which to this date has never come, together with other airline companies. There is also no resident aviation related company operating at the airport site dubbed as North Cagayan International Airport.

Lallo airport recorded some 168 flights ranging from tourism, diplomatic visit, emergency and medical airlift, and less than 1,000 passengers in 2016 according to the Philippine Information Agency.

Meanwhile, local Tuguegarao airport 78 km. away are growing passengers and aircraft traffic numbers registering 186, 193 passengers in 2016 serviced by both Philippine Airlines and Cebu Pacific.