Gov't intervenes against PAL outsourcing

Assumes jurisdiction to prevent strike

April 28, 2010

The Department of Labor and Employment (DOLE) has assumed jurisdiction Tuesday to resolve labor dispute against retrenchment plan at Philippine Airlines (PAL) and ordered its management to defer the decision to terminate 3,000 of the company’s 7,500 employees on May 31, 2010 after the PAL Employees Association (PALEA) filed notice of strike against the ailing flag carrier.

DOLE also ordered PALEA to refrain from doing any act that could paralyze the operation of the airline to the detriment of its passengers pending the resolution of the dispute which remains to be the biggest challenge of the labor department to date.

The Labor Department has 30 days to resolve the dispute before the employees are permitted to legally strike under Philippine Labor Laws. The department said it would meet with both the union and the company’s management on April 30 to try to resolve the issues.

An airline is considered by jurisprudence as an industry indespensable to national interest that require the governments intervention to avoid disruption of air transport services.

The government has been asked to bail out the airline following the footsteps of Thai and Malaysia airlines but the government refused to invest in the flag carrier considering its present state of finances.

PAL recently announce the planned outsourcing earlier this month in a bid to boost its profitability amidst losses it incurred during the last three years, mainly because of fuel price increases and the worldwide recession that followed affecting travel demands around the world to which the airline was badly affected. Most of the airline's revenues were derived from its international operations.

The airline recently awarded the reservations and customer supports center to a PLDT subsidiary which service is expected to take effect on June 1.

PLDT Bags PAL Reservations

April 23, 2010

Telecom giant Philippine Long Distance Telephone company (PLDT) subsidiary ePLDT Ventus, has won the bid to provide reservations and call center service requirements of Philippine Airlines (PAL) which the airline earlier announced to be outsourced as part of the company’s restructuring and cost-cutting, program.

PAL president Jaime Bautista and ePLDT Ventus president Maulik Parekh signed the agreement yesterday. The contracts key feature is the provision for ePLDT Ventus to extend job offers to all affected employees of PAL’s reservations sales units in Manila and Cebu, and Mabuhay Miles Center, which will be phased out on June 1, 2010. Affected staff of PAL’s reservations sales and Mabuhay Miles Center will be given first priority in filling the approximately 600 agent positions at ePLDT Ventus.

The agreement calls for ePLDT Ventus to provide a dedicated team of call-center agents on a 24-hours-a-day, seven-days-a-week basis to service the broad range of PAL’s requirements.

These functions include reservations and ticketing, including schedule and fare inquiries, flight booking, change or cancellation of booking, issuance of tickets, and advance seat reservation; general inquiries, including flight arrival and departure information, inquiries about routes and destinations, documentation requirements, and journey-related information; and tour bookings, including inquiries and booking of the Swingaround and PALakbayan tour products.

Also outsourced to Ventus are the following functions: Mabuhay Miles services, including program information and member benefits, membership inquiries, profile updates, account status, award flight booking and ticketing; disruption handling, including notification of passengers in cases of flight schedule changes; fulfillment, including back-office services; and special services, including coordination of group bookings, arrangement of special passenger handling (medical cases, special meal requests, etc.), and email handling.

Interisland plane crashed in Pampanga

Kills three, saves three others

April 23, 2010

Clark - An Interisland Airlines Antonov 12BP cargo plane (UP-AN216, msn402001,cn51) crashed Wednesday in San Patricio village, Mexico town, Pampanga while attempting to land at its destination airport in Clark.

Three crew were killed and three others were rescued by villagers from the burning wreckage. Mexico town police head Superintendent Ferdinand Perez identified the fatalities as Russian ground engineers Mikolay Bannon and Vadim Yakimov and Bulgarian crew member Tzvitoslav Guetchevski whose remains were found "beyond recognition".

The survivors were pilot Yuri Tochocony, 50, co-pilot Dmitri Straminski, 39, and crewmember Bokadier Ruchev, 34.

Tochony said he and the two other survivors ran to safer ground after jumping from the plane. He further said that only one of the crewmen was at the cargo cabin in the middle section of the aircraft at the time of the crash, while he and the four other crewmen were inside the cockpit.

Initial investigation showed that the cargo plane which came from Mactan, Cebu on a routine chartered flight by the Pacific East Asia Cargo Company in behalf of cargo forwarder United Parcel Service (UPS) encountered a short circuit at about 8:50 p.m., triggering a fire inside the aircraft. Clark's tower lost communication with the aircraft at 9:10 p.m.

Russian pilot Yuriv Tochonyy called the tower for an emergency landing but was forced to make landing in Barangay Laput in Mexico, Pampanga and crashed landed about 22 miles (35 kilometers) south of Clark airport.

"The pilots were already in communication with the tower before they declared an emergency" said Alfonso Cusi, director-general of the Civil Aviation Authority of the Philippines. He added the plane was only 10 minutes away from landing when it crashed.

"The cause of the crash looks to be a technical problem with the aircraft's electrical system," says Cusi.

Aircraft investigators from the Civil Aviation Authority of the Philippines have already retrieved the plane's black box and voice recorder. However, investigators could not immediately examine the voice recordings in the black box because they were in Russian.

The aircraft owned by ATMA airlines of Kazakhstan was on a wet lease to Interisland, says Cusi. It first flew as CCCP-11976 in October 14, 1963.

Cusi said two task force were organized, with the first looking on the cause of crash, while the other team would look into documents and records of how the aircraft was able to obtain an Airline Certificate of Conveyance and airworthiness certificate.

Interisland operates a fleet of four aircraft mostly manufactured in the 60's for charter passenger service and cargo flights.

PAL, Gulf Air not keen on more Bahrain flights

Protest new ASA

By Lenie Lectura
April 22, 2010

FLAG carrier Philippine Airlines (PAL) is not interested in mounting flights to Bahrain even if the government’s air panel just recently concluded amending the air services agreement (ASA) between the Philippines and Bahrain.

A PAL executive pointed out that not even Gulf Air wants to fly to Bahrain given the many unutilized entitlements. “There is over capacity in Bahrain. There are so many flights between Manila and Bahrain. Gulf Air is not supporting the additional air entitlements. There is only one group that wants this and that is Bahrain Air,” said PAL president Jaime Bautista. Bahrain Air is the second flag carrier of the Kingdom of Bahrain. The low-cost airline currently flies to the Middle East, Africa and South Asia. It started operations in February 2008 and uses an Airbus A320 fleet.

On March 30, the Philippines and Bahrain amended the air pact between the countries. Under the new deal, four weekly flights to the Manila-Bahrain route were added. Of these new flights, three can only be utilized if there are corresponding flights that would be used in Clark, said Civil Aeronautics Board (CAB) executive director Carmelo Arcilla.

“Of the four, one entitlement was granted without any condition. The remaining three can be utilized only if these three entitlements will also be used in Clark,” said Arcilla.

The amended air pact with Bahrain brings to 54 the total number of flight entitlements with the Philippines. The Manila-Bahrain route now has 12 flight entitlements; seven flight entitlements to Cebu; 28 to Clark and seven to other points except Manila and Clark. “There is no need to add more rights in the Middle East. There are almost 70 weekly flights between Manila and the Middle East. All these have connecting flights to Europe. If this trend continues, we will not be able to fly to Europe anymore,” said the PAL official. The company discontinued flying to European destinations in the 1980s.

The flag carrier, however, is interested to fly to Siem Reap in Cambodia; Bombay in India, and a new route in China. “Cambodia has many tourist that in the Philippines. The market is for tourists. We would also want to fly to India via Bangkok but the Thailand government prohibits us to pick up passengers there, citing 5th freedom rights. We are now doing the ground works before we seek the assistance of the CAB to talk to its counterpart in Bangkok,” said Bautista.

The CAB is part of the Philippine air panel which negotiates for traffic rights with other countries.

The Philippine air panel is composed of officials from the departments of Transportation and Communications, Foreign Affairs, Tourism, and Trade and Industry, the CAB and representatives of the airline firms.

5J Buys Seven more A320's

Confirms Option

April 22, 2010

Delivery Schedules

• 2010- three A320
• 2011 - three A320
• 2012 - four A320
• 2013 - five A320
• 2014 - seven A320
  

Toulouse - Philippine carrier Cebu Pacific has placed a firm order for seven more Airbus A320 aircraft powered by CFM56 engines in a deal worth $1.4 billion, Airbus announced Tuesday. This increases Cebu Pacific's A320 order backlog to 22 jets, set for delivery between the last quarter of 2010 and 2014.

Lance Y. Gokongwei, president of Cebu Pacific operator Cebu Air, Inc., said in a press briefing yesterday that it will expand its fleet over a five-year period to meet growing demand for low-cost air travel.

“We are buying 22 more new aircraft and by 2014 we will have a fleet of 51 aircraft and the largest A320 fleet in the Philippines. The aircraft will start arriving between 2010 and 2014. The reason is that the demand for our services has been very good so we want to increase our capacity,” Mr. Gokongwei said.

Cebu Pacific has a current fleet of 29 aircraft majority of which belongs to the A320 family. They also operates 8 ATR 72-500 deployed to smaller airports across the country.

Rockwell Collins avionics was chosen by Cebu Pacific Air to provide a full suite of communication, navigation and surveillance systems as baseline equipment for the airline's 22 new Airbus A320 aircraft.

Mr. Gokongwei said the purchase of new aircraft would be covered by internally generated funds and export credit.

“The purchase doesn’t depend on the IPO. It’s actually a combination of funding strategies. We will reconsider the IPO after the elections but there really isn’t a definite timeline on that,” said Mr. Gokongwei.

Gokongwei further said that three Airbus A320s will be delivered in the last quarter of 2010; another three will be delivered starting June towards the end of the second half of 2011; four units by 2012 ; seven by 2013; and five by 2014.

By the end of 2014, Cebu Pacific’s fleet size would have grown to 51—composed of 10 Airbus A319s, 33 Airbus A320s, and eight ATRs. The airline now has 10 Airbus A319s; 11 Airbus A320s; and eight ATRs for a total of 29 aircraft.

“By 2014, Cebu Pacific will have the largest Airbus A320 fleet in the Philippines, and the second-largest in Southeast Asia. Cebu Pacific will also double its seating capacity in the next five years,” said Gokongwei.

Starting October 27, 2010, the airline will add new frequencies from Manila to Cagayan de Oro (six times daily), Zamboanga (thrice daily), Pagadian (five times weekly), Davao (six times daily), Tagbilaran (twice daily), Coron (12 times weekly) and Kalibo (16 times weekly). International flights to Taipei will become daily starting Oct. 31, 2010, and Jakarta flights will be four times weekly starting Dec. 19, 2010 while flights to Seoul will be twice daily starting Jan. 24, 2011.

The airline will also add more frequency to the following domestic destinations starting Nov. 24, 2010, and they are as follows:

• Manila-Boracay (79 times weekly),

• Manila-Cebu (13 times daily),

• Cebu-Boracay (twice daily),

• Cebu-General Santos (daily),

• Cebu-Puerto Princesa (daily), and

• Cebu-Bacolod (twice daily).

The Cebu-Zamboanga and Davao-Zamboanga routes will also be upgraded from an ATR72-500 to an Airbus A319, increasing capacity for its daily flights.

The carrier currently flies to 33 domestic destinations and 14 cities across Asia Pacific Region.

NAIA posts banner year in 2009 with 24 M passengers

Makes Manila as 51th Biggest airport in the world

From a passenger capacity of 4.5 million in 1981, the Ninoy Aquino International Airport (NAIA) complex has now become one of the busiest airport in the World transporting 24.5 million passengers making it on the 51th spot, up five notches based on the latest figures released by Airport Council International (ACI).

Despite worldwide economic recession plaguing the airline industry, the growth of passenger traffic at Manila airport has been phenomenal growing 11.5 percent this year as compared to worldwide passenger growth of +0.1%, and +1.2% for Asia Pacific region.

Official figures from ACI disclosed that in 2006 the airport handled only 17.7 million passengers making it the 72nd busiest airport in the world. Passenger volume went up further to 20.4 million passengers in 2007, and 22.1 million in 2008 landing it on the 56th spot.

The airport complex, consisting of 4 terminals, boast a combined capacity of 35 million passengers per year. Aside from its 5 resident domestic airlines, it is serviced by 30 international airlines handling around 200,000 flights and more than 24 million passengers in the year 2009. Further, there are additional seven foreign carriers expected to operate at Manila's premiere airport this year. and continues to be the main international gateway of the country, as it has been for the past decades.

Despite the emergence of new airports with international flight capabilities in the last two years, the NAIA complex handled about 90% of all international traffic in the country. Including domestic passenger movement, NAIA accounted for about 75% total passenger traffic.

Contributing to capacity building was the commercial start-up of Terminal 3 in July 22, 2008, with a soft opening that initially involved domestic flights from Cebu Pacific, followed by other domestic flights from PAL Express and Air Philippines.

Currently, the NAIA Terminal 3 is handling about half or about 7.5 million passengers of its designed capacity of 13 million passengers yearly.

Manila International Airport Authority (MIAA) General Manager Alfonso Cusi also cited the successful certification of the main international terminal, NAIA T1 to the global 9001:2008 ISO Standards of Quality Management Service as well as the continuing strength, secure and safe conduct of its airport operations through the terminal management concept.

Fast Facts:
* Total worldwide passenger growth of +0.1%
Fastest growing region was the Middle East at 5.8% followed by Africa (+4.9%) and Latin America Caribbean (+2.1%)
Asia Pacific and Europe grew by 1.2%
North America only region with decrease in traffic (-3.1%)
* Total aircraft movements handled by airports was 77 million, a decrease of 2.1%
* Total cargo handled decreased by 3.7% to 86 million tonnes
* 51% of airports worldwide registered positive passenger growth in 2008, together these airports represent 49% of total passenger traffic
* 520 airports with more than 5 million passengers experienced a decrease in passengers compared to only 21 airports in 2007.

PAL drops three non-core units

To pay $46 million maturing debts

April 19, 2010

Lean and Mean

Philippine Airlines (PAL) has announced Saturday that it will spin-off three non-core units effective June 1, 2010 to generate fresh cash as it reorganizes into a leaner, more efficient company.

PAL CCO Richard Miller, Standing second from left.

The affected units are in-flight catering services, airport services ( which include ground handling, cargo terminal/handling, and ramp handling), and call center reservations. All affected regular positions will be deemed abolished from PAL’s table of organization effective at the close of business hours on May 31.

“Given this grim scenario, PAL has no choice but to restructure. It must also sell and/or cease operations of non-core businesses since no airline in Asia, or the world for that matter, continue to operate non-core businesses” says PAL chief commercial group adviser Richard Miller in a press briefing.

The selling price was not however disclosed but the airline said it will be used to pay maturing debts.

The airline justified its restructuring plan due to adverse operating factors beyond its control which in fact plagued the airline industry worldwide. Among the problems raised by PAL includes liberalization of the commercial aviation industry, worldwide economic recession slowing passenger traffic movements which also was preceded by record-high oil prices in 2008-2009 period.

Debt Payments

The cost-cutting measures are designed for the survival of the national carrier which failed to generate new capital investments from new and existing stockholders particularly from the Tan Group which refused to raised fresh capital. The government is also not inclined to bail out the airline considering its current financial state.

“PAL has to meet its huge outstanding obligations as they fall due to prevent creditors from taking over the business,” Miller stressed.

PAL reported $350 million in losses during the last two fiscal years. Its remaining equity has also dropped to over $1.1 million as of February 2010 making investments in the airline almost worthless to generate confidence from new investors.

PAL already trimmed its net loss to $40.2 million in the first nine months of its fiscal year ending March 2010 from $330.2 million recorded the same period a year earlier. The company expects to break-even this year.

“PAL did its best to adjust to the harsh operating environment. It implemented a series of cost-cutting initiatives, including a manpower rationalization program in September 2009 that affected more than 400 executives and administrative employees.” Miller said.

In 2000, PAL sold its Maintenance and Engineering Department to Lufthansa Technik Philippines (LTP) as part of the company's rehabilitation plan.

Flat International Growth

PAL expects the growth projection this year to be almost flat, with total passengers carried expected to reach nine million by the end of its fiscal year on March 31, or almost the same as the 8.96 million passengers flow in the last fiscal year, mainly fueled by the domestic market which only account almost 25% of its gross revenue.

In 2009, the airline carried 8.96 million passengers, up 17.1 percent higher than what it carried in 2008. Currently,it flew 7.5 million passengers ending December 31, 37 percent of which are international passengers while the rest are domestic traffic.

Richard Miller said that from April 2009 to January 2010, the number of international passengers flown dropped six percent while those of domestic passengers grew 18 percent.

While international passengers account for only 37 percent of total passengers carried, PAL’s international business contributes 75 percent to total revenues.

Miller said that PAL will focus its expansion in Asia as it adds new regional routes to India and more China destinations.

3,000 jobs to be delisted from PAL's payroll

Some 3,000 workers are set to lose their jobs by end-May when the country’s flag carrier implements its spinoff-outsourcing plans, President Jaime Bautista’s letter to the union said.

The next phase of the restructuring program will affect PAL’s medical, information technology unit, and some human resource and administrative positions, added Bautista. But details of the next phase of the restrucurting program have yet to be finalized.

Palea president Gerardo Rivera said on Sunday that they were slightly caught by surprise with the content of Bautista’s April 16, 2010, letter “since he didn’t raise this during our meeting with him on April 8.”

He said Bautista even assured the Palea leaders that the ills of PAL—a $46.5-million obligation maturing by June 2010, among others—wouldn’t affect the manpower.

“Sure, there were what I call pocket outsourcing, with some jobs being outsourced, but not at this scale and imminence.”

In his letter, Bautista said the company has “implemented a manpower rationalization program affecting more than 400 executives and administrative employees” since September last year.

Rivera said the union “will not take this issue sitting down as the welfare of the families of those affected are at stake.”

He added that beginning Monday, the union would try to sit down with the management to find alternative options to this decision as they will try to exhaust legal means to respond to this issue.

He said only a thousand of the estimated total 4,000 PAL employees will not be affected by the layoff if it pushes through, mostly comprising the pilots and flight crews.

Manila Lands on 36th spot as Worlds Largest

Top 100 Airports by Seat Capacity Available on International Departing Flights for w/c 12/04/10
Ranking	Departure	Departure Airport Name	Total Number
	Airport Code		of Seats
1	LHR	LONDON HEATHROW APT	807,923
2	CDG	PARIS CHARLES DE GAULLE APT	658,509
3	FRA	FRANKFURT INTERNATIONAL APT	613,714
4	HKG	HONG KONG INTERNATIONAL APT	598,276
5	DXB	DUBAI INTERNATIONAL	590,414
6	SIN	SINGAPORE CHANGI APT	540,086
7	AMS	AMSTERDAM	511,997
8	BKK	BANGKOK SUVARNABHUMI INTERNATIONAL APT	453,766
9	ICN	SEOUL INCHEON INTERNATIONAL AIRPORT	394,804
10	MAD	MADRID BARAJAS APT	387,854
11	NRT	TOKYO NARITA APT	383,618
12	MUC	MUNICH INTERNATIONAL AIRPORT	340,665
13	TPE	TAIPEI TAIWAN TAOYUAN INTERNATIONAL APT	310,305
14	FCO	ROME FIUMICINO APT	298,446
15	LGW	LONDON GATWICK APT	297,539
16	KUL	KUALA LUMPUR INTERNATIONAL AIRPORT	294,441
17	JFK	NEW YORK J F KENNEDY INTERNATIONAL APT	289,287
18	ZRH	ZURICH AIRPORT	285,113
19	VIE	VIENNA	268,386
20	IST	ISTANBUL ATATURK AIRPORT	260,523
21	CPH	COPENHAGEN KASTRUP APT	249,570
22	PVG	SHANGHAI PUDONG INTERNATIONAL APT	241,768
23	DUB	DUBLIN	230,962
24	DOH	DOHA	230,440
25	YYZ	TORONTO LESTER B PEARSON INTL APT	221,721
26	MIA	MIAMI INTERNATIONAL APT	221,199
27	BRU	BRUSSELS AIRPORT	220,976
28	BCN	BARCELONA APT	214,601
29	STN	LONDON STANSTED APT	208,762
30	ORY	PARIS ORLY APT	197,279
31	MXP	MILAN MALPENSA APT	196,706
32	PEK	BEIJING CAPITAL APT	194,543
33	LAX	LOS ANGELES INTERNATIONAL APT	190,813
34	DUS	DUESSELDORF INTERNATIONAL AIRPORT	179,605
35	CAI	CAIRO	158,345
36	MNL	MANILA NINOY AQUINO INTERNATIONAL APT	154,986
37	ARN	STOCKHOLM ARLANDA APT	153,411
38	GVA	GENEVA	152,947
39	AUH	ABU DHABI INTERNATIONAL APT	151,827
40	SYD	SYDNEY KINGSFORD SMITH APT	149,958
41	LIS	LISBON	148,498
42	EWR	NEWARK LIBERTY INTERNATIONAL APT	148,202
43	BAH	BAHRAIN	144,549
44	PRG	PRAGUE	141,405
45	ORD	CHICAGO O'HARE INTERNATIONAL APT	138,999
46	HEL	HELSINKI	135,594
47	ATH	ATHENS	134,282
48	MAN	MANCHESTER INTERNATIONAL APT	132,497
49	SVO	MOSCOW SHEREMETYEVO INTERNATIONAL APT	132,345
50	PMI	PALMA DE MALLORCA	131,404
51	CGK	JAKARTA SOEKARNO-HATTA APT	129,848
52	KIX	OSAKA KANSAI INTERNATIONAL AIRPORT	129,364
53	OSL	OSLO GARDERMOEN AIRPORT	128,593
54	KWI	KUWAIT	128,356
55	JNB	JOHANNESBURG O.R. TAMBO INTERNATIONAL	127,750
56	TLV	TEL AVIV BEN GURION INTERNATIONAL APT	125,646
57	JED	JEDDAH	123,940
58	ATL	ATLANTA HARTSFIELD-JACKSON INTL APT	122,057
59	DEL	DELHI	121,480
60	DME	MOSCOW DOMODEDOVO APT	121,454
61	GRU	SAO PAULO GUARULHOS INTL APT	121,392
62	BOM	MUMBAI	119,687
63	AGP	MALAGA	115,473
64	BUD	BUDAPEST	111,116
65	SJU	SAN JUAN LUIS MUNOZ MARIN INTL APT	106,126
66	MEX	MEXICO CITY JUAREZ INTERNATIONAL APT	104,182
67	IAH	HOUSTON GEORGE BUSH INTERCONTINENTAL AP	103,465
68	SFO	SAN FRANCISCO INTERNATIONAL APT	101,880
69	TXL	BERLIN TEGEL APT	98,196
70	RUH	RIYADH	97,524
71	CUN	CANCUN	97,501
72	LTN	LONDON LUTON APT	96,628
73	EZE	BUENOS AIRES MINISTRO PISTARINI	96,585
74	SGN	HO CHI MINH CITY	95,499
75	WAW	WARSAW	93,845
76	ALC	ALICANTE	92,846
77	YVR	VANCOUVER INTERNATIONAL APT	90,164
78	HAM	HAMBURG AIRPORT	89,767
79	IAD	WASHINGTON DULLES INTERNATIONAL APT	89,118
80	AKL	AUCKLAND INTERNATIONAL APT	88,379
81	PTY	PANAMA CITY TOCUMEN INTERNATIONAL	86,144
82	NCE	NICE	85,859
83	BHX	BIRMINGHAM INTERNATIONAL AIRPORT	85,643
84	MCT	MUSCAT	83,694
85	CGN	COLOGNE/BONN APT	83,502
86	BEY	BEIRUT	79,686
87	CMN	CASABLANCA MOHAMMED V APT	79,299
88	YUL	MONTREAL PIERRE ELLIOTT TRUDEAU INT APT	78,163
89	CAN	GUANGZHOU	77,219
90	AMM	AMMAN QUEEN ALIA INTERNATIONAL APT	77,183
91	STR	STUTTGART AIRPORT	75,753
92	LIM	LIMA	72,966
93	MEL	MELBOURNE AIRPORT	72,235
94	SXF	BERLIN SCHOENEFELD APT	69,637
95	SHJ	SHARJAH	69,326
96	DFW	DALLAS/FORT WORTH INTL APT	68,233
97	RIX	RIGA	68,151
98	CRL	BRUSSELS S. CHARLEROI AIRPORT	67,418
99	DPS	DENPASAR BALI	66,665
100	CMB	COLOMBO BANDARANAIKE APT	66,465
Source:OAG MAX Online