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PAL Registers 102% In Flight Increase

As Compared To November Figures


24 December 2020

Flag carrier Philippine Airlines (PAL) has ramped up its domestic flights on various domestic and foreign routes in line with its network restoration plan to the delight of its creditors.

The airline said it has restored services to 15 additional destinations increasing the PAL network to a grand total of 25 domestic and 32 international flights, equivalent to 102 percent increase in PAL flights vs. November 2020 levels. It however loses London, and Saudi Arabia bound flights as a result of government mandated travel restrictions.

PAL has doubled its services  between Manila and Cebu, from 14 to 28 round-trip flights weekly since December 1. Flights between Manila and Cagayan de Oro also increase to three times daily, while flights between Manila and Tacloban were doubled to two times a day.

The airline resumed services to Antique, Basco, Boracay, Catarman ,Coron, Panglao, Siargao and Bacolod.  While its Cebu hub continues to expand with flights to Clark, Puerto Princesa, Legazpi, Bacolod, Davao, Butuan, General Santos and Siargao.  PAL is likewise operating regularly from Davao to Zamboanga and vice versa.

PAL is also slowly increasing flight frequencies on most domestic routes, from Manila to Laoag, Legazpi, Puerto Princesa, Kalibo, Iloilo, Cotabato, Butuan, Dipolog, Ozamiz, Pagadian and Zamboanga.

The airline is also adding more flights to New York, Honolulu, Los Angeles, San Francisco, Vancouver, Toronto, Guam, Jakarta, Bangkok, Tokyo, Osaka, Nagoya, Hong Kong, Taipei, Dubai and Doha.

Meanwhile, PAL has secured contract to transport vaccines in Asia Pacific as it reactivates its fleet of widebody aircraft for the task of transporting life saving vaccines around the region.

PAL has also set up a One-Stop-Shop center at Naia Terminal 2 that augments the national government’s existing facilities to conduct mandatory RT-PCR swab testing for arriving passengers raising NAIA capacity to 5,000 per day from the previous 3,000 capacity.

PAL also continues to operate repatriation flights that transport stranded OFWs and other Overseas Filipinos home from all over the world, along with all-cargo charter flights to transport essential goods in Asia and North America.

PAL Suspends London Until February

 Due To New Covid Strain

23 December 2020


Flag carrier Philippine Airlines (PAL) said on Wednesday it is suspending flights to and from London from Thursday after the Philippine government joins the rest of the world and orders its temporary cessation effective midnight of December 24 to December 31, 2020 due to new coronavirus strain.

PAL however said it will suspend flight up to the end of February as Britain sorts out strategy to contain the new virus strain. 

The airline said it supports all measures that seek to curb any potential increase in COVID-19 cases during the holiday season and beyond. Philippine Airlines operates a Manila-London-Manila service once a week.The airline flies every Thursday to the British capital.

SMC Submits Bid To Operate NAIA

 


17 December 2020

San Miguel Corporation has submitted proposal to run the Ninoy Aquino International Airport for the same terms submitted by Megawide Group.

“Yes, NAIA... [to] operate and maintain only,” Ang said in a text message.

San Miguel’s bid came after the Manila International Airport Authority (MIAA) revoked the original proponent status (OPS) of Megawide Construction Corp. and its Bangalore-based consortium partner GMR Infrastructure Ltd. to rehabilitate NAIA.

The Department of Transportation (DOTr) earlier awarded in August 2019 the contract to build and operate the New Manila International Airport Project to San Miguel Holdings Corp., SMC's infrastructure unit.

Both parties signed the concession deal for the New Manila International Airport on September 18, a month and four days after SMC received the notice of award for the contract.

 

Cebu Airport Found To Be Owned By GMR

 Megawide Acted As Dummy!

17 December 2020

Mactan Cebu Airport Operator GMR Megawide Cebu Airport Corporation (GMCAC) was found by the government of the Philippines to have broken its Constitution and Laws, according to the Justice Department, as the Office of the Ombudsman suspends Mactan  Cebu International Airport Authority (MCIAA) General Manager Steve Dicdican for allowing Foreigners to run Mactan Airport.

The National Bureau of Investigation (NBI) earlier filed before the Department of Justice a case against Mactan  Cebu International Airport Authority (MCIAA) General Manager Steve Dicdican and 15 others, including 11 foreign nationals, for Anti-Dummy Law provisions, risking the cancellation of the consortium license and permit to run Mactan Airport and forfeiture of its security deposits.

GMCAC is a consortium between Megawide Construction Corporation (Megawide), a company incorporated under Philippine laws, and GMR Group, a foreign airport operator based in India.

The  NBI-Anti-Fraud Division (NBI-AFD) claimed that the respondents “connived, colluded, schemed and acted together to violate the 1987 Constitution and the Anti-Dummy Law.”

NBI-AFD Officer-in-Charge (OIC) Director Eric B. Distor said this is not about the Concession Agreement Dicdican claims but concerns about violation of "Anti-Dummy Law".

Distor said MCIAA Officials allowed foreign contractors to take over the management of the airport which they are expressly prohibited to do under Philippine Laws. 

NBI said airports are industry invested with national interest that no foreigners should run it other than Filipinos. That is not the case of Cebu Airport operator. 

Under the Concession Agreement signed by Megawide and MCIAA, the airport operator should not be violating the Constitution or any Philippine Laws, otherwise they lose the right to operate the airport and pay government damages for fraud and misrepresentation.

Aside from Dicdican, named respondents in the complaint were GMR Megawide Cebu Airport Corporation (GMCAC) Filipino officers Manuel Louie Ferrer, Edgar Saavedra, Oliver Tan and JZ Dela Cruz.

The foreign nationals named in the complaint were eight Indian nationals Srivinas Bommidala, Vivek Singhai, Ravi Bhatnagar, Ravishankar Saravu, Sudarshan MD, Kumar Gaurav, Magesh Nambiar and Rajesh Madan.

The other foreigners mentioned in the complaint were Singaporean national P. Sripathy, Ghanaian Andrew Acquaah-Harrison and Irish national Michael Lenane.

Based on the evidence obtained by the Office of the Ombudsman, the MCIA is operated, administered, and managed by non-Filipinos more particularly by an Irish, a Ghanaian and several Indians who have profound control, enjoyment, and control over a Philippine public utility, with the knowledge and approval of the Filipino officers of CMIAA and GMCAC.

“Evidence submitted by the complainant and gathered by the investigators showed that the foreign nationals were actually performing executive and managerial positions, contrary to the provisions of Article XII of the Constitution,” the NBI said.

Russian Helicopters To Arrive Next Year

17 December 2020

While the Philippine Air Force (PAF) receives its first Combat Utility Helicopter from Poland last month, another set of new Russian-built heavy helicopters are on their way to the Philippines according to Department of National Defense (DND) Secretary Delfin Lorenzana at the sidelines of the Philippine Navy fleet review and wing flyby held off Morong, Bataan on Wednesday. 

The Philippines will receive 16 new medium-lift helicopters from Russia in a Government to Government deal worth US$268.7 million (₱12.797 billion), and slated for delivery on the fourth quarter of next year. 

DND formally approved the Mi-171 acquisition through the issuance of a ‘Notice of Award’ document to Russia last month. 

The Russian government will also donate one brand new Mi-171 to the Philippines in VIP configuration, upon directions of President Vladimir Putin.

 


Lorenzana said the value and capability of the Russian helicopter was seen first hand by the Philippine Air Force at the height of Typhoon Yolanda (Haiyan) when the United Nation (UN) brought a pair of Mi-17 to aid in relief distribution efforts in November of 2013.

“Contrary to reports, the purchase of Russia made helicopter was already in the minds of the AFP Technical Working Group (TWG) since 2013 as it was very effective in humanitarian assistance,” says Lorenzana.

Lorenzana disclosed that government saw logistics difficulty in bringing relief supplies to Typhoon hit areas of Northern Luzon and Bicol region in November after it was hit by three successive and strong typhoons.

“The PAF has detailed data on EU and US made helicopters. So comparison was made on those data readily available. It didn't have enough technical data with Russian helicopters then, referring to the revised modernization program. But now everything changes after Russia provided it to them in 2016, so it was one of the recommendation.”

Lorenzana stressed that AFP Modernization program can be changed.

“Nothing is set in stone.  As a matter of fact, the black hawks was not there in the revised plan. It was supposed to be the Bell 412, yet here they are, ” says the Defense Chief.


Meanwhile, the PAF will complete its acceptance of 16 units Sikorsky S-70i Black Hawk combat utility helicopters acquired from Polish company Polskie Zaklady Lotnicze Sp.z.o.o and manufactured under license from Sikorsky USA for a contract price of USD241 million. 

Polskie Zaklady Lotnicze started delivery last month of six Sikorsky S-70i Black Hawk combat utility helicopters. The remaining 10 orders will arrive in the country in the first quarter of next year.


Cathay Pacific To Fly Davao

17 December 2020

Cathay Pacific (CPA) has filed with the Civil Aviation Board (CAB) Permit to fly Hong Kong-Davao-Hong Kong beginning next year with A321 aircraft as it consolidate its operations with subsidiary Dragon Air.

 

SMC Awards Royal Boskalis Westminster NV To Build Bulacan Airport

Boskalis Wins Contract To Build NMIA

16 December 2020

San Miguel Corporation (SMC) has awarded  the US$1.73-billion contract for land development works of Bulacan airport to Dutch firm Royal Boskalis Westminster N.V., through its wholly-owned subsidiary Boskalis Philippines Inc. 

Royal Boskalis will commence construction of the P740-billion New Manila International Airport project in Bulacan in the first quarter of 2021.The airport contractor is expected to complete preparatory works on land development at the airport site in Bulakan, Bulacan by 2024. 

Boskalis, a global dredging contractor withl track record spanning more than a century, is known for projects, such as the ongoing development of Singapore’s Tuas Terminal Phase 2 port and its Tekong Polder projects.  

“Boskalis has committed to ensure that the area will be suitable for development. It will be designed with the highest technical and environmental standards, so it can withstand potential large earthquakes, local typhoon conditions, and even future sea level rise,” according to SMC president and COO Ramon S. Ang.

SMC chose Boskalis after a rigorous selection process that included the world’s biggest and best dredging companies, announced SMC president and chief operating officer Ramon S. Ang.

 “Our selection of a global giant in dredging shows how committed we are to make sure this airport project is developed properly and sustainably,” he elaborated.

Boskalis’ workplan and methodology includes measures to prevent soil liquefaction in the entire area.  

What happens to PAL after Chapter 11?

By Iris Gonzales

14 December 2020

In sealed caskets, onboard a Philippine Airlines A330 aircraft, the remains of at least 200 Filipinos from Saudi Arabia, 49 of whom died of COVID-19, arrived at the Ninoy Aquino International Airport one late morning of July.

It must have been difficult for the crew to be on the nine-hour flight – sad, disturbing, and macabre. For how could it not? One lifeless body is already one death too many. But there would be more PAL flights carrying the dead back home to Manila.

Other flights were easier as they were filled with distressed, but alive overseas Filipino workers – from Milan to Maldives and many places in between.

Chartered by the government, Lucio Tan-owned Philippine Airlines has been bringing home OFWs from different corners of the world who wanted to leave their host countries ever since COVID-19 ripped through the globe.

But in between bringing home the dead and the living, the four star carrier was facing its own pandemic of sorts since the start of 2020, coming from a very difficult year before.

Indeed, 2019 wasn’t exactly the airline’s best; a foreshadowing of sorts, a portent of things to come. It was a seemingly cursed year for the 79-year old company, putting it in a precarious situation when COVID-19 struck.

While its latest cycle of financial troubles started in 2017, the year 2019 was life-altering for PAL. It saw the company grapple with a Netflix-like edge-of-your-seat saga, characterized by drastic management changes, family-related squabbles, loud swearing and shouting in its executive meetings, paralyzing policies, and the sudden departures of some esteemed members of its board of directors, including Kapitan’s old guards.

Put these all together with COVID-19 as the final blow, PAL, like many giant airlines across the globe, found itself right smack in the worst turbulence it ever had to face.

Some predicted its death in March because of heavy cash burn as a result of huge passenger refund requests and no new revenues. Its debt is now at $6 billion.

But a combination of luck, perhaps divine intervention, and $135 million in fresh funds from its chairman El Kapitan, once upon a time the country’s richest man, has enabled the company to keep going.

It will soon join other airlines, including Chile’s LATAM, Avianca and Miami Air that are all seeking creditor protection through a Chapter 11 filing in the United States. If approved, PAL will, in essence not be forced to pay its mounting debts immediately, but over a period of time.

Chapter 11 in the US Bankruptcy Code generally provides for reorganization of a corporation. Under this chapter, a debtor proposes a reorganization plan to keep its business alive and pay creditors over a period of time. Nineteen lessors have exposure to PAL for 48 aircraft, or half of its 99-strong aircraft fleet, according to FlightGlobal.

PAL is targeting to make the filing in January next year.

Many non-US airlines have turned to Chapter 11 because the ability to bind creditors to US court jurisdiction, which is respected globally, puts teeth in the terms of the restructuring, according to global law firm Freshfields Bruckhaus Deringer.

PAL’s management, led by its president Gilbert Santa Maria – a non-airline executive, but with a history of successful corporate turnarounds – hopes to exit Chapter 11 in March.

It is hoping that in the knick of time – if its stars are aligned – PAL would be out of Chapter 11 and would be able to pop champagne bottles by March 15, 2021 to celebrate its 80th anniversary.

Business as usual

In a town hall meeting last week, PAL assured employees it would be business as usual for the airline even during restructuring.

“PAL will continue to operate and fly during restructuring. There will be no impact on passengers – full continuity, no disruption,” management said.

In fact, PAL wingwoman Cielo Villaluna said the carrier has already readied flights for this month and beyond to Los Angeles, San Francisco, Toronto, New York, etc.

Post-Chapter 11, PAL envisions a more efficient and competitive operation with stronger finances and lower debt.

Employees

But the collateral damage is huge, employees included. PAL is reducing its 6,000-strong employee headcount by 35 percent.

Will PAL make it through the turbulence? Only time will tell, but if it successfully exits Chapter 11, it would have to face its new chapter with so much more professionalism and better management than before. Clearly, the effect of bad decisions in the past, including those years when it was in government hands, has piled up and made PAL the troubled airline that it is now. This has hurt its employees most of all because they were the first ones to be let go.

Moving forward, PAL’s employees, who risk life and limb to bring home their fellow Filipinos – dead or alive – during these difficult times, with or without hazard pay – deserve a more efficient company and not one that is run like a family-owned sari-sari store with pilferage, leaks and all.

For now, PAL’s saga continues, but eventually and with the right decisions by its core team that would advance the interests of the greater good, including its employees and the public, PAL may successfully emerge through the turbulence and at the right time, gloriously touch down again as seamlessly as its pilots do on the runway.

 

PAL Negotiation With Creditors Running Smoothly

11 December 2020

By Michael Allen
 

Philippine Airlines’ (PAL) lessors are bracing for a potential court protection filing by the flag carrier as part of its restructuring amid the Covid-19 pandemic, according to sources close to the process.

Nineteen lessors are exposed to PAL and its subsidiary PAL Express to the tune of 48 aircraft – nearly half of the carrier’s 99-strong fleet.


Exact details of the potential filing have not yet been decided upon, sources say, although a Chapter 11 filing in the USA is on the cards. The airline may also seek a pre-packaged insolvency, whereby it would agree a restructuring plan with its creditors in advance of filing.

“Nothing is certain yet. It’s still very much a work in progress,” says one of the carrier’s lessors.

Cirium understands Norton Rose Fulbright has been appointed as airline counsel on the restructuring. The Magic Circle law firm sent documentation to lessors this week regarding amendments to leases and the carrier’s restructuring process, according to a person who received the documentation.

Like many struggling airlines around the globe, the airline has been in talks with its lessors for some months about restructuring leases.

As with other major airline restructurings in the Asia-Pacific region, PAL will be looking to reduce its leased fleet and seeking more favourable lease terms on the leased aircraft it decides to keep.

Over 20 of the leased aircraft are widebodies, which will be at more risk of rejection given that Ascend by Cirium does not predict long-haul travel to recover to 2019 levels until 2024-25. Some of those twin-aisles are Airbus A330-300s, which lessors say will particularly struggle to find new homes if PAL sends them back to lessors, especially if other carriers in the region with A330s like AirAsia X flood the market with rejected or repossessed aircraft.

Nikkei Asia reported on 25 November that PAL is looking to return around 20 leased aircraft. Two people Cirium spoke to with exposure to PAL said what Nikkei Asia reported was accurate, with one adding that the exact number of aircraft has yet to be finalised.

yourfile

Source: Cirium fleets data

A market source observing the process but not directly involved says PAL has been trying to be “as fair as [it] could be”.

“If [for example] you are Avolon and you are getting your A350 back, they would keep your A330. That’s how they were behaving,” the person says, adding: “I think it’s drawing to that natural conclusion: I think people are accepting there are airplanes coming back.”

In addition to Norton Rose as its lawyers, PAL has appointed Seabury Capital as a restructuring advisor.

Lessors and other observers praised PAL’s approach in conversations with Cirium, saying communication between the airline and its creditors had been smooth and well-handled, albeit lessors will almost certainly be required to take haircuts.

They pointed to how much better the process has been with PAL than other restructurings in the region, including those of Malaysia Airlines, AirAsia X and Lion Air, which have caused them particular headaches.

Lessor complaints to Cirium about Malaysia Airlines’ handling of its process lessened after the Malaysian flag carrier brought restructuring expert Houlihan Lokey on board, perhaps highlighting the importance of bringing in outside expertise, as with PAL’s appointment of Seabury.

“I think the process has been handled extremely well by the PAL core team and their advisors including Seabury and so on – it had a lot of positive comments,” a person close to PAL tells Cirium.

Acknowledging that despite the smoothness of the process, lessors will still need to share some of PAL’s pain, the person adds: “It’s business unfortunately, and in the [Covid-19] environment we are in, what can you do?

“But there are also compliments that it’s been handled quite well in terms of what the ask is, and I think the transparency is extremely important, which is not the case in other [restructurings] where there is just not enough information coming out.”

LAX Still PAL Biggest Market

10 December 2020

Los Angeles remains to be Philippine Airlines (PAL) top North American destination in 2019 with almost 557,000 seats last year, equivalent to 32% of its US/Canada total, according to data compiled by Official Airline Guide (OAG).

Manila-Los Angeles route had an estimated 83% seat factor, with 76% of passengers being to/from Manila.

It was served eighteen flights per week with Boeing B777-300ERs and Airbus A350-900s.

Data from OAG disclosed that PAL had over 1.7m North American seats in 2019, up by 71% over 2010 for a decent compound annual growth rate (CAGR) of 5.5%. 

PAL flies to six destinations in North American since 2015 serving Honolulu, Los Angeles, San Francisco, Vancouver, New York JFK, and Toronto. It was supposed to open Seattle and Chicago this year.


The airline market revolves around Filipino diaspora in North America with over 610,000 traveling Filipinos in Greater Los Angeles alone which has the largest volume outside of the Philippines, followed by San Francisco, New York, Honolulu, Toronto, San Diego, and Vancouver.

OAG Traffic Analyser also disclosed that Chicago remains Manila’s largest unserved North American market last year with 104,000 passengers. 

Meanwhile, 24% of Filipino VFR passengers transiting in Los Angeles to Manila came from Las Vegas, followed by Miami, Orlando, New Orleans, and Houston Intercontinental, in that order translating to almost 112,000 transit passengers.

On the other hand, PAL carried 7% of ‘Los Angeles over Manila’ traffic  to/from Southeast Asia with Denpasar, Indonesia (9,300; 10%), Ho Chi Minh,Vietnam (6,000; 6%), Bangkok, Thailand (5,900; 6%), and Kuala Lumpur, Malaysia (4,900; 5%), as ultimate destination.

WHY PAL Plans Direct CEB-LAX?


OAG DATA also disclosed that almost 59,000 (60%) of PAL passengers to Manila transited to other Philippine cities, with majority transit traffic heading Cebu, followed by Iloilo, and Davao, Bacolod, and Laoag.

PAL proposed to fly Cebu-Los Angeles and vice versa beginning May 2, 2020 had Covid19 pandemic not intervened in its way. It was supposed to be flown thrice a week with B777-300ER's.




Pan Pacific To Add Dadiangas


7 December 2020

Kalibo-based airliner Pan Pacific airline is expanding to General Santos beginning with logistics operations for the transport of premium fruits, vegetables and seafood products.

Chief Operating Officer and President Arturo Alejandrino disclosed the airline is opening logistic operations, initially for cargo and eventually for commercial passenger flights.

Pan Pacific Airlines operates a fleet of three Airbus A320-200 aircraft from its main hubs in Kalibo International Airport, Mactan–Cebu International Airport, and Clark International Airport, and regularly fly to Chengdu, Wuhan, and Zhengzhou in China, and to Busan, Muan, and Seoul in South Korea.

CEB A330 Stripped for Cargo Conversion


 3 December 2020

Low Cost Carrier, Cebu Pacific Air (CEB), has contracted AIRE (Aircraft Interior Refurbishment EspaƱa) to convert two of its eight A330s currently stored at Alice Spring in Australia, into a full cabin cargo configuration in response to increased cargo demand brought about by the Covid-19 pandemic.

AIRE Part 21J worked double time alongside the engineering team of CEB to meet the seven-day lead time of the project. Within this period, the required post-modification configurations were finalised and a documents package demonstrating compliance with relevant regulations was released. This package included the ICA documentation to process the exemption application under Article 71(1) Regulation (EU) 2018/1139.

AIRE has also been handling the manufacturing and procurement of all the materials required to undertake the aircrafts’ conversion from passenger to cargo operations, adding cargo space in the cabin as well as the belly. The team began with nets and additional EFPMS procurement, and also manufactured two kits of placards (to indicate the locations of additional emergency equipment, cargo areas, and relevant limitations) as well as two carpet kits for the new layout.

The cargo conversion has been initially submitted to the authorities for exemption under Article 71 (a) for a period of eight months, with hopes to secure full approval for flying in cargo configuration shortly. This exemption has allowed the airline to begin using its newly converted aircraft with a short lead time, ensuring cargo operations continue smoothly.

“The project was challenging, but thanks to our tireless team and experience accumulated on cargo operations over previous months, we completed the project in compliance with structural integrity, fire protection and emergency evacuation requirements, following EASA, IATA, and TCH recommendations, all in one week,” stated Juan Arevalo, engineering director at AIRE.

PAL, CEB Offers Covid19 Testing


1 December 2020

Flag carrier Philippine Airlines (PAL) and budget airline Cebu Pacific (CEB) will be offering COVID-19 testing to their passengers before their flights beginning today.

PAL said it will be offering passengers departing from the country the convenience of its own RT-PCR testing center in Manila starting December 1 from 4,000 pesos, while all Cebu Pacific passengers going to General Santos City will have to undergo the airline's antigen rapid testing at the airport just before their flights starting December 3 for free during the two week trial periods.

Philippine Airlines
“Starting December 1, PAL ticket holders will enjoy a P500 discount from the PHP 4,500 regular rate,” PAL said.

The COVID-19 RT-PCR testing site is located at the Philippine Airlines Learning Center in Ermita, Manila with Detoxicare Molecular Diagnostics Laboratory as its DOH-accredited partner. The test results from PAL’s testing center will be released within 12 to 24 hours.

“PAL ticket holders may choose either a drive-thru or walk-in service option. The testing facility is open daily from Monday to Sunday from 8 a.m. to 5 p.m. with no noon break,” it said.

“Passengers will experience pre-departure convenience with the testing facility's guaranteed release of results within 24 hours,” it said.

PAL said travelers may pay in cash or card or through GCash, PayPal, WeChat Pay, or Alipay.

Upon entering the testing facility, PAL passengers must present their ID, PAL ticket, and QR code indicating completed registration on the PAL Passenger Profile and Health Declaration form.

Except for flights to the US, Canada, and Australia, all passengers must register and accomplish the online Passenger Profile and Health Declaration Form as early as five days before departure.

In the meantime, PAL has also partnered with other accredited laboratory and testing facilities to provide passengers exclusive and discounted testing fees and/or quicker release of results.

There are currently eight testing partners with more than 50 branches combined, available within Metro Manila and other Provinces like Cavite, Pampanga, Bulacan, Rizal, Laguna, Batangas, Iloilo, and Cebu.

The testing fee and release of results vary among testing partners.

To avail of the services of PAL's other testing partners, passengers must proceed to the testing facility and present their ID, PAL Ticket, and QR Code indicating completion of registration via the PAL Passenger Profile and Health Declaration Form.

Cebu Pacific
Meanwhile, Cebu Pacific said Test Before Boarding (TBB) antigen testing will reduce the risk of infection between testing and boarding, finding infected passengers in a more timely manner.

Only passengers with negative antigen test results will be allowed to board the CEB aircraft, the airline said, while those with positive results will be referred to another testing facility for confirmatory RT-PCR testing.

Cebu Pacific said TBB - to be done together with the General Santos City government and in coordination with the Philippine Airport Diagnostic Laboratory (PADL) - will run for a two-week trial period and free-of-charge during the pilot run.

Passengers in these covered flights will no longer have to take any other test prior to their flight, the airline said.

“We welcome this development through Cebu Pacific, because it opens up more people to the idea of traveling again. We believe this will be a breakthrough initiative, as it will allow our residents to feel more secure and not be wary of arriving passengers from Manila,” said Mayor Ronnel Rivera of General Santos City.

PAL Passengers Required To Register at Traze Contact Tracing

1 December 2020

By  Joel E. Zurbano 

Flag carrier Philippine Airlines on Saturday started requiring its clients to register with a contact tracing application to support the government’s campaign to prevent the spread of the coronavirus disease.

“All passengers flying to and from any airport in the Philippines must download and register through Traze Contact Tracing, a unified and automated contact tracing app, before proceeding to the airport,” the PAL management stated in its reminder to air travelers.

Using the app will help health authorities to easily contact and notify travelers who may have had contact with a COVID-19 patient. These travelers are advised to self-isolate immediately and take other health and sanitation precautionary measures.

Travelers who do not have mobile phones or any other mobile gadgets may go to the Malasakit Helpdesk at the airport for registration assistance to get a unique QR code. They may also ask a family member to register them with the app.

Traze help desks are also available at the terminal entrance and arrival areas of international airport terminals in the Philippines.

Passengers traveling to the Philippines from overseas countries are advised to download the app before they embark on their trip.  

Initially, the Traze App will automate the contact tracing of people at the Ninoy Aquino International Airport, Clark Internal Airport, Mactan-Cebu International Airport, and Davao International Airport, and at the Civil Aviation Authority of the Philippines and Civil Aeronautics Board.

The tracing app was co-developed by the Philippine Ports Authority (PPA) and Cosmotech Philippines, Inc.

Traze is compliant with Republic Act 10017 or the Data Privacy Act (DPA). It allows anonymous registration and optional submission of personal information (i.e. mobile phone, email address). It is easy to use and does not require Bluetooth nor GPS to work. It will work even with slow data or WiFi.

With nationwide coverage, Traze has complete modules to trace individuals, establishments, logistics, and transportation systems such as trains, vessels, airplanes, jeepneys, taxis, PUVs, and even tricycles, among others. 


PAL Prepares $5Billion Debt Rehab Plan

Biggest In Country's History

1 December 2020

By: Daxim L. Lucas

The total liabilities of Philippine Airlines (PAL)—including its outstanding obligations to foreign aircraft suppliers—stand at almost $5 billion, making its proposed debt restructuring plan the largest in the country’s history.

“This [amount] is due to new accounting rules on [aircraft] leases that were implemen­ted in 2019,” a company insider told the Inquirer, even as he explained that the actual amount of loans excluding these assets was “much smaller than that.”

According to company insiders, the flag carrier’s total liabilities are expected to fall to around $3 billion once its rehabilitation plan is approved by US courts, possibly as soon as next month.

“PAL will likely seek US court protection once it has 67 percent of its creditors or lessors agreeing to its request for restructuring,” another industry source familiar with the airline’s situation said.

“This is to ensure that dissenting creditors follow and don’t throw off the restructuring plan—it’s the usual Chapter 11 filing done by US businesses to ensure business [continuity],” he added. “It will be filed in the US since 75 percent of creditors are based there and they have specific courts with knowledgeable judges on restructuring.”

Going forward, however, the airline may find it difficult to raise crucial cash from private sources while assembling a plan to survive the COVID-19 pandemic.

This could leave the heavy lifting in the hands of the Philippine government, which has so far rejected direct corporate bailouts while moving slowly in providing loans to the beleaguered aviation sector.

Eduardo Francisco, president of BDO Capital Investment Corp., said lenders were wiling to step in but would likely limit their exposure in PAL itself given its current financial woes.

“We would rather not lend to PAL but to the Lucio Tan Group. The money is more protected as they have other assets and cash flow,” the investment banker said in an interview on Thursday.

Francisco believes the Philippine government should ultimately act as PAL’s “white knight.”

He said it could provide guarantees and loans subject to stringent conditions but the better scenario might be the partial nationalization of PAL more than two decades after it was privatized.

Nonetheless, the Philippine banking system is capable of dealing with credit losses that may arise from the financial woes of flag carrier PAL, which is grappling with about P240 billion in interest-bearing debt, mostly owed to aircraft lessors.

“The local banks are well prepared for the problem. Their exposure is less than 10 percent of the total [debt]. The biggest creditors are foreign financiers and lessors of the planes,” a source from one of PAL’s local creditor-banks said. “Lucio Tan (controlling shareholder) will put in fresh equity. Yes, they will need new lenders, too. It should not be a problem. Excess plane capacity and legacy costs are the main issues,” the source said.

Based on the latest financial statement of PAL’s parent holding firm, PAL Holdings, the group has about P11.5 billion in unsecured short-term loans from local banks and P35.66 billion in long-term debt.

According to banking sources, the key local creditors of PAL are BDO Unibank, Asia United Bank, China Bank and Philippine National Bank. The biggest interest-bearing liabilities come from the leasing of aircraft, amounting to P193.1 billion as of end-September. In total, PAL Holdings had P308 billion in liabilities as of end-September.

“People look at PAL’s balance sheet and see hundreds of billions in debt but only P35 billion (referring to long-term debt) is owed to banks—most are owed to suppliers and lessors of planes—and of this amount, only a fraction is actually owed to local lenders. Moreover, the move to secure US court protection is a necessary procedural step for the airline to return to profitability. This is why concerns on impact on local banking industry are likely exaggerated,” said Raymond Neil Franco, head of research at brokerage house Abacus Securities.

PAL Pushes Back Retrenchment Until Early Next Year

1 December 2020

Miguel Camus

Philippine Airlines is pushing back the timetable for its manpower reduction program until after the Christmas holidays, even as the company divulged plans over the weekend to retrench some of its most senior pilots as part of cost cutting measures.

The Philippine Daily Inquirer learned that the flag carrier’s so-called management pilots—chief pilots and instructors who make up the top of the profession’s pyramid—were recently asked to tender courtesy resignations by Nov. 30.

PAL’s management will then select which of these pilots’ resignation letters will be accepted and which will be rejected after an evaluation, a company source said, adding that some junior pilots have also opted to accept voluntary separation packages.

Speaking on condition of anonymity, a ranking airline official explained, however, that while both cost cutting measures and changes to corporate habits must be made, the culture of its pilots “is not broken.”

“It’s PAL’s morale that needs to be shored up,” the official said. “Skills need upgrading, attitudes need changing.”

Another company insider said the looming overhaul of the airline’s management pilot corps was potentially the key to effecting changes that would help the Lucio Tan-controlled airline to survive its financial troubles.

Meanwhile, employees who will be separated from the firm under a previously announced redundancy program will likely remain employed for the remainder of this year.

Originally slated for completion by December this year, the job cuts affecting 35 percent of the PAL group’s workforce of over 2,700 employees will be fully implemented by Jan. 7, an industry source told the Inquirer.

This was a key part of Project Gamma, the airline’s survival and recovery program detailed to employees last September.

The retrenchment program will involve voluntary and involuntary measures. Roughly 1,600 employees availed themselves of voluntary separation, the source said.

These are among the steps being taken by PAL as it prepares to file for court protection in the United States as early as December this year.

The fresh round of job cuts follow manpower reductions made by local rivals AirAsia Philippines and Cebu Pacific, and PAL management also said there was no guarantee this round of layoffs would be the last.

This was due to the weak business environment and the billions of pesos in recurring costs running an airline—much of it tied to aircraft maintenance and lease payments.