PAL Appoints New President

30 July 2019

Flag carrier Philippine Airlines (PAL) has appointed Los Angeles-based Gilbert Santa Maria as its new President and Chief Operating Officer, following the retirement of Jaime J. Bautista.

Santa Maria's appointment was approved by the PAL Board of Directors yesterday. He previously served as COO of IBEX Global Solutions, a BPO Company based in Washington DC, managing 13,000 employees worldwide.

Santa Maria  whose work begins August 1 said his priorities would include maintaining the airline’s current quality of service as well as profitability.

“I’ve been across multiple industries so I’m not intimidated by industry change. This is day one for me. We have a lot of work to do,” he said.

Santa Maria said his appointment came as a shock for him since he has been living “on the other side of the Pacific.” “So for me this is coming home. I guess leaders from Mindanao are ‘in’ these days. I’m from Mindanao. I was born in Butuan, grew up in Cagayan de Oro,” he said.

“For a president, you don’t have to be an airline guy. You just have to know how to manage people, and then make everybody work together. So he has a good background in management. He has managed a lot of companies, foreign and local,” PAL vice chairman Lucio “Bong” Tan Jr. said.

Tan Jr. said Santa Maria was recommended by his father, the airline’s chairman tycoon Lucio Tan, and some other people. The 15-man PAL Board had “unanimously approved” the choice of Gilbert Santa Maria, a “handpicked nominee of PAL Chairman and CEO Dr. Lucio C. Tan,” as President and Chief Operating Officer.

Santa Maria has a Master’s in Public and Private Management from the Yale University School of Management and a BS in Electrical Engineering from the University of the Philippines in Diliman.

“The chairman ordered that the new president works with the vice chairman, yours truly, and then the whole corporate governance committee, which is consisted of eight members and we added two more independent directors to beef up the whole committee. From now on, it’s going to be those three bodies that will drive PAL to move forward,” Mr. Tan said.

Sangley Approves E-Jets, A220 Services

Limits Commercial Jets to sizes no bigger than A318 /B717

23 July 2019

The Transport Department (DOTr) has said that the E190 E2 of Embraer and Airbus 220-100 can land safely at Sangley Airport when it opens to the public in October. 

The announcement was made after the Civil Aviation Authority of the Philippines (CAAP) cleared both manufacturer's aircraft from landing at the airport in addition to turboprop planes of major commercial airlines.

CAAP however said that aircraft bigger than Airbus A318 or Boeing B717 planes are still prohibited from using Sangley at this time due to airport infrastructure limitations.

Philippine Airlines (PAL) operates turboprop planes as big as the DHC4s, while Cebu Pacific (CEB)  and other airlines operates the ATR 72-600s, all Code 3C aircraft according to the Air Navigation Services(ANS) of the CAAP.

ANS said both the Embraer and Bombardier planes are likewise classified as 3C aircraft based on the PANS-Aerodrome (Doc9981) an ICAO document which would qualify them to use Sangley. They are similarly sized to BAe146 jets operated by Skyjet, and Royal Air capable of seating between 70-100 passengers.

No airline in the Philippines however operates A318, B717,  E jets or C-series planes at this time. CAAP believes that might change soon as airlines line up jet flight services from that side of Metro Manila airport in addition to turboprop traffic.

DOTr disclosed that Sangley airport passenger terminal building is capable of supporting two flights per hour of this type of jet aircraft or three flights per hour for the turboprop planes.

Aboitiz Submits Revised Concession Terms For Panglao

NAIA Consortium Follows Suit

22 July 2019

Aboitiz InfraCapital, Inc. has submitted to the Department of Transportation (DoTr) the revised concession terms for its proposal to operate and maintain the Bohol-Panglao International Airport for consideration by NEDA.

DoTr also received revised concession agreements by NAIA Consortium Friday for the operations and management of Manila International Airport. DOTR said they will transmit the revised documents to NEDA this week.

The proposals of Chelsea Logistics and Infrastructure Holdings Corp.’s bid for the Davao International Airport and Mega7 Construction Corp. for the Kalibo International Airport revised concession agreement are still to be submitted to the Department.

The re-submission of new terms comes after NEDA require all proponents of airport projects to draft concession agreements patterned after the one signed with the North Luzon Airport Consortium (NLAC) for the operation and maintenance (O&M) of the Clark International Airport.

LTP Grows Manila Hub

22 July 2019

Lufthansa Technik Philippines, the country’s largest aircraft maintenance, repair, overhaul (MRO) operation, mulls expansion of its facilities in Manila with $40 million in new investments that would hire 300 workers in addition to the existing 3,200 headcount even as it noted that the tax and fiscal incentive package granted by the Philippine Economic Zone Authority (PEZA) helps them cope with stiff competition in the Asia Pacific region.

Trade and Industry Secretary Ramon M. Lopez revealed this after his meeting with Lufthansa President and CEO Elmar Lutter.

According to Lopez, the company is planning a 9,000 square meter expansion in the area worth $40 million and will add 300 jobs. The expansion will be completed 13 months after they award the contract.

At present, Lufthansa enjoys fiscal and non-fiscal incentives. PEZA-registered enterprises are entitled to income tax holiday (ITH) and 5 percent gross income tax after the ITH. They are also entitled to zero duty importation of capital equipment, tax deduction on the training expenses and employment of foreign nations.

During the meeting, Lutter informed Lopez that the incentive package “helps Lufthansa deal with challenges in such as stiff competition in the Asia Pacific Region and the logistical costs of operating in an island country.”

Lopez said he fully supports Lufthansa’s MRO expansion plans. These expansions, he said, will help the Philippines become and aerospace and MRO hub in the Asia Pacific.

“The Philippines is positioning itself as the hub for aerospace manufacturing and aftermarket services in the Asia Pacific Region. We have the young, educated, and highly-trainable workforce that is a boon to investors. If we achieve this goal, we can increase our high-value exports and provide decent jobs to more Filipinos,” said Lopez.

Lutter said that the global MRO market is expected to continuously grow by 4 to 5 percent per year, one third of which will come from the Asia Pacific Region.

Lutter further said that job opportunities in other industries and the growing global demand for MRO skilled workers may lead to a labor shortage in the Philippine MRO industry.

Filipinos, he said, are known as skilled aircraft mechanics not just in the Philippines but in the world. “The competitive advantage of the Philippines is its people,” he added.

Lufthansa Technik Philippines, a joint venture of Lufthansa Technik AG (51%) and MacroAsia Corporation (49%), is located at the center of Southeast Asia, within a four-hour flight radius of major international hubs in Asia such as Singapore and Hong Kong. MacroAsia is owned by taipan Lucio Tan, who owns the country’s flag carrier Philippine Airlines.

Within a special economic zone at the Ninoy Aquino International Airport, its facility occupies a total area of 229,000 square meter lot in Villamor Airbase employing 3,200 people. It maintains 3 hangars capable of servicing up to 6 wide-body and 3 narrow body aircraft at a time, and 9 apron parking slots.

Its hangars are equipped with platform systems, overhead cranes, and engine, tail and wing docks. Modern and process-oriented workshops support aircraft overhaul, major modifications, cabin reconfigurations, and aircraft painting.

Based on its website, the company specializes in base maintenance for the A320 family, A330, A340, A380, and Boeing 777 aircraft types. It provides line maintenance services to a wide range of customers. The base maintenance service spectrum includes cabin reconfiguration/retrofit programs and lease return checks available as a stand-alone product or integrated into long-term contracts.

It is precisely this capability that has enabled Lufthansa Technik Philippines to successfully implement the A330 cabin reconfiguration project which contributed to PAL’s achievement of their upgraded 4-star airline rating from Skytrax.

Through our satellite offices in Cebu, Clark, Davao, Palawan and Aklan, the company provides aircraft line maintenance support to domestic and international airlines.

Airbus delivers H145 to Coast Guard

22 July 2019

Airbus delivers the first H145 helicopter for the Philippine Coast Guard. The order was made in 2018 as support air unit of its new 84 metre Offshore Patrol Vessel (OPV) acquired from France, making it the first H145 parapublic operator in the Philippines.

The new 4-tonne-class twin-engine helicopter is specially equipped with high frequency radios, emergency flotation gear, fast roping, cargo sling, search light, and electro-optical systems to perform critical missions including search and rescue, medical evacuation, maritime patrol and law enforcement. The latest contract will also encompass on-site technical support and continuing airworthiness management organisation services, fully supported by Airbus’ team in the country.

Flight Restriction to Caticlan, Kalibo Lifted

17 July 2019

The Civil Aeronautics Board (CAB) has lifted the moratorium on all charter flights to Kalibo and Caticlan after major environmental repair works off Boracay Island was completed by the government.

Last year, the Department of Environment and Natural Resources (DENR) has determined that the resort island of Boracay can only accommodate 19,215 tourists a day, at any given time, or 6,405 arrivals a day based on an average three-day stay.

CAB earlier passed a resolution restricting Caticlan and Kalibo flights, mostly affecting Chinese passengers, due to breaches of tourism arrival figures beyond 7,000 visitors on average per day recorded in April and May, or beyond Boracay island’s daily carrying capacity.

This was the reason it suspended new and additional charter flights to Kalibo and Boracay, and ordered scheduled carriers to review their flight numbers for a possible scaleback.

CAB Executive Director Carmelo L. Arcilla however clarified that only charter flights are lifted as restrictions to additional scheduled flights of airlines are still in place.

“airlines are restricted from mounting additional flights.” says Arcilla.

Airlines are also prohibited from using Airbus A321 and Boeing B737-900 planes to both airports, except legacy carriers that seat their planes less than 200 passengers.

“All air operators to these two cities will not be allowed to use aircraft with more than a 200-seat capacity.” Arcilla adds.

CAB has instructed interested carriers intending to mount new and additional charter flights to Kalibo and Caticlan airports to file their charter applications “at least 30 days before the intended date of operation, and the scheduling of operations on less congested days of the week as determined by the CAB.”

The CAB resolution lifting the moratorium, effective immediately, was signed after a special board meeting on July 15, 2019.

According to Arcilla June arrivals started to drop onward to October before rising again for the holiday season. July to September is considered lean season on the island mainly because of the weather.

“That is the trend in past years. We determined that there is no reason to maintain the current flight restrictions considering that its lean season,” CAB said.

According to data from the Malay Tourism Office cited by the CAB, tourists in Boracay dropped to 189,444 in June 2019, from 222,330 in April and 221,138 in May. This translates to an average of 6,314 daily arrivals.

“The annual trend in 2015-2017 suggests that this number may still go down, bottoming out in September, consistently the month with least visitor numbers. This year, that can mean only around 4,200 tourists per day, irrespective of the mode of transportation taken. The tourist arrivals then recover until December, but only top off at 76 percent of the April average.” explains Arcilla.

CAB disclosed that next year almost all of Boracay rehabilitation projects should most likely be completed paving the way for the agency to ease the moratorium further. But Arcilla cautioned that still depends upon the recommendation of the DENR and the DOT to increase daily arrivals beyond 7,000 visitors per day.

Lucio Tan Takes Back PAL Management

16 July 2019

Philippine Airlines (PAL) owner Lucio Tan has taken back management control as he appointed himself interim President of his airline after retirement of Jaime J. bautista.

The assumption of office came after the airline reported demoralized workforce due to sudden change of management.

According to the airline, Tan will serve as president immediately. He also sits as chairman on a concurrent capacity. The post of Chief Operating Officer (COO) remains vacant.

Vivienne Tan, Executive Vice President of PAL, said she will assist her father in the day to day operations of the airline.

“Our goal is to ensure an orderly and seamless transition of leadership,” Ms. Tan said pending appointment of the next President and COO.

PAL Looks Russian Far East

10 July 2019

The Philippine Embassy in Moscow hosted a tourism seminar for top Russian tour companies on 25 June 2019 at the Embassy Chancery. The tourism seminar was presented by Philippine Airlines, in partnership with DMC Uni-Orient and Spectrum, and aims to promote the best tourism destinations throughout the Philippines.

PAL Appoints New Officers

10 July 2019

Philippine Airlines (PAL) has appointed new junior executives to stir the airline to greater heights as it transitions from Jaime J. Bautista-led management to that of Vivienne K. Tan management.

Vivienne K. Tan on Monday announced the appointment of Rosemarie S. Katalbas as Senior Vice President of Human Capital Department and Eugene Go as Chief Commercial and Marketing Officer.

The new officers will lead the airline’s marketing and human-resources management.

“Ms. Katalbas brings with her a vast experience in leadership roles in human resource management across multiple industries both in the region and globally,” PAL said in a statement.

“These industries include electronics manufacturing, solar energy, pharmaceutical, audit and management firm, and financial services.”

Katalbas was awarded the People Manager of the year by the People Management Association of the Philippines and was recently the recipient of the Philippines’s Most Talented Leaders (2018) World HRD Congress.

Meanwhile, Go is a product of De La Salle University with postgraduate studies in Singapore Institute of Technology where he finished with academic distinction. He has over 27 years of Marketing and Commercial experience in companies like Unilever and Johnson & Johnson, to name a few, and was instrumental in the rise to market leadership of household brand names. He is an Agora awardee for Marketing Excellence. He is skilled in Fast-Moving Consumer Goods (FMCG), Market Planning, Key Account Development, Sales Operations, and Forecasting.

“We’re working to make PAL more efficient and productive by improving business procedures—how we do things.” Tan said.

Demoralized work force
Ms. Tan denied speculations of demoralized work force as a result of unceremonious sacking of its junior executives and instead call upon them to unite and carry on with their duties.

“I call on all of you to stand united as you carry out your duties and responsibilities in PAL,” Tan said.

She rallied PAL executives and staff to value the wisdom of unity, stressing that “with unity, there is strength and with strength in numbers, we will make PAL succeed together.”

CEB Explains Decision To Go Maxpax on A339

No New Routes Planned

10 JULY 2019

Philippine low-cost carrier Cebu Pacific (CEB) announced it will install a maximum 460 seats in an all-economy configuration aboard the A330-900neo aircraft that it ordered at the Paris Air Show last week.

The reason for dense configuration is principally the bottleneck at Manila airport.

“We’re operating in Asia in one of the most constrained environments from an infrastructure point of view,” Mike Szucs, CEB chief executive advisor said.

Deliveries of the A330-900neos will start in 2021. Cebu Pacific is looking to build on the current operation of its ultra-high density current-generation Airbus A330-300ceo aircraft with the new similarly sized aircraft containing 6% more seats.



“One of the things you see there is the slot restrictions. We see them very much in Manila itself, but it really is all the way around the region. Frankly, what we’re looking for is as big a bus as we possibly can find to fly people on what are the trunk routes.” Szucs says.

These will be very uncomfortable aircraft, but the airline is clear about its mission to deliver ultra-low-cost travel in the Asia Pacific region compounded by airport constraints.

“We have very successfully over the last couple of years been deploying the A330ceos on routes that perhaps we didn’t envisage that we would,” Szucs adds.

According to Szucs the airline flies it's A330 to Hongkong 4 times a day, twice daily to Singapore, and daily to Seoul, Narita, Osaka, and Taipie. Its latest A330 daily route is Shanghai. CEB also flies to Dubai daily, Sydney 4 times a week and Melbourne 3 times a week. It also flies 3x daily domestic services to Cebu and Davao.

The A330neos will progressively be replacing the existing fleet of eight A330ceos to cover existing destinations and upgrade some destinations.

“what we’re doing is looking at how we improve our density and frequency of service. So we’re really looking at, for instance, growing in the routes that we currently serve.”Szucs discloses.

The budget carrier is not exploring new long haul destinations to fly the 16 new wide body aircraft as they will be used to fly existing routes as well as upgrade others.

CEB plans to double flights services to Dubai, Sydney and Melbourne upon arrival of these new aircraft.

NMIA Secures ECC

8 July 2019

The Department of Environment and Natural Resources (DENR) has issued an environmental compliance certificate (ECC) to San Miguel Corporation (SMC) subsidiary that will reclaim land for the construction of international airport in Bulacan province.

Lormelyn Claudio, DENR director in Central Luzon, said she approved on June 14 the ECC of Silvertides Holdings, a contractor of San Miguel Corp. (SMC), to develop 2,070 hectares in the coastal villages of Bambang and Taliptip in Bulakan where the new international airport is to be constructed.

An ECC is issued to certify that a proposed project will not cause a significant negative environmental impact, as validated by DENR’s environmental impact assessment review committee.

The environmental impact assessment was conducted by Philkairos Inc.

Philkairos said the 24.5-hectare mangrove area in Taliptio and Bambang will be left undisturbed when the international airport project starts construction as the airport complex is envisioned to be an island airport surrounded by water accessible only by a causeway for both rail and motor traffic.

NAIA Consortium Offer Declined Anew

5 July 2019

Agreement Must Be the Same As Clark template

The Department of Transportation (DOTr) has returned its unsolicited offer to rehabilitate the Ninoy Aquino International Airport (NAIA) after its proponent insisted on the MAGA Clause worded differently which has been declined by NEDA, a Transport Official said Thursday.

“They are required to pattern the concession agreement after the one signed with the North Luzon Airport Consortium for the operations and maintenance of the Clark International Airport,” Transportation Undersecretary for planning Ruben Reinoso said.

The National Economic and Development Authority (NEDA) returned the P102-billion offer of the Naia Consortium and required them to submit another round of revisions consistent with the draft concession agreements for operation and maintenance deal of Clark International Airport.

The government considers the Clark Airport contract, bagged by a consortium led by JG Summit, Changi Airports Philippines, and Filinvest Development Corp. last December, as a good template due to the risks that were assigned to the private sector.

One of its features was the condition that will trigger compensation for the private concessionaire, otherwise known as a Material Adverse Government Action (MAGA).

MAGA events are more commonly known as “political risk” or “political force majeure”. The purpose of a MAGA clause is to allocate certain agreed types of political risk to the Contracting Authority, address the consequences of such risks occurring and provide the Private Partner with appropriate relief and compensation.

In the Clark Airport contract, MAGA will cover only executive orders and not the impact of any change in future laws which the consortium surreptitiously included in their second proposal.

Reinoso said the previous submission of the group was accepted by the DOTr because they accepted all the clauses embodied in the Clark contract. What was submitted however is a MAGA Clause inconsistent with what the government wants.

“They just reiterated their old proposal for government guarantee. That is a no-no,” Reinoso said.

Consortium contends that the Clark Airport O&M had a different risk profile. For one, it is a hybrid Public-Private Partnership project where the capacity expansion was bid out separately from the O&M component. The Consortium also finds the Clark template risky and it also requires readjustment of profitability expectations.

The NAIA Consortium however said that they will revise the terms of the concession agreement for the third time to conform fully to the Clark template which is required by the government.

“The principles were aligned before. But what is asked of them is to have the exact provisions. The explanation of the proponent before was the configuration of NAIA with Clark is different so it cannot be exactly the same. But NEDA said it has to have the same, exact configurations and provisions,” Reinoso said.

The NAIA consortium is composed of some of the country’s biggest conglomerates, which are Aboitiz InfraCapital Inc., Ayala Corporation Infrastructure Holdings Corp., Alliance Global Group Inc., Asia’s Emerging Dragon Corp., Filinvest Development Corp., JG Summit Holdings Inc. and Metro Pacific Investments Corp. Its technical partner is Singapore’s Changi Airports International.

NAIA Consortium’s offer includes Terminal expansion to add capacity and interconnecting the existing terminals of NAIA, upgrading airside facilities, developing commercial facilities to increase airline and airport efficiencies, enhancing passenger comfort and experience and elevating the status of NAIA as the country’s premier international gateway. The duration of contract is 15 years.

The latest setback spells further delays for the project, which aims to increase capacity to the Philippines’ busiest air gateway to 65 million passengers in ten years. NAIA handled 45 million in 2018 and is expected to reach 55 million passengers in three years time.

Transport Secretary Art Tugade has said in May that he was targeting to award the project in 90 days, or by August this year so that it can be open in 2022.

That goal is now effectively postponed for another year as the NAIA Consortium will re-draft the legal and economic terms and re-submit its proposal to DOTr which will then be endorsed to the NEDA Board for their approval, after which their will be call for competitive challenge, which takes at least 60 days to complete.

Reinoso said award of the contract is expected to be made by second quarter of next year if proponent is fast enough to submit their third offer.

Reinoso also said that Sec. Tugade ordered last week the return to the respective proponents all other unsolicited proposals for regional airport projects which have been granted the original proponent status (OPS) to pattern their draft concession agreements after Clark international airport’s operation and maintenance contract.

This include proposals for Davao International Airport, Panglao International Airport, and Kalibo International Airport.

Since the start of the Duterte administration, five business groups have made unsolicited bids for nine existing provincial air gateways.

DOTr Awards NMIA To SMC

3 July 2019

The Department of Transport (DOTr) is awarding to San Miguel Corp. (SMC) the right to build New Manila International Airport (NMIA) under a 50 year concession agreement.

Notice of Award is being prepared to be send to SMC. A formal announcement will be made soon.

SMC president Ramon S. Ang said the company will begin awarding contract to its contractors by September this year after receiving the notice (NTP) from DOTr for detailed engineering works and land preparations.

The first phase will consist of two parallel runways and a passenger terminal building with revised capacity of 35 million passengers per annum. Phase 1 of the project is expected to be completed in 2024.