CAAP Suspends Zest Air

Tagbilaran Airport sealed Zest Air's Fate

16 August 2013
       SAFETY VIOLATIONS

• No qualified Accountable Manager since July 19, 2013
• Failure to check aircraft logs, flight manifest, weather, etc.
• Failure to present to the CAAP the airman license (Aircraft Mechanic License) during ramp inspection
• Series of occurrences that affected several flight operations
• Refueling with passenger on board involving RP-C8989 on August 14, 2013
• Excessive flight duty time case under the enforcement and legal service

The Civil Aviation Authority of the Philippines (CAAP) has suspended Zest Airways after serious deviations and infractions of rules and safety standards imposed by the Philippine Civil Aviation Regulations (PCAR).

Suspension of Zest Air flights is effective 6 pm this evening. No flights will be permitted to depart except return flights to Manila. Passengers affected are advised to contact the airline for possible transfers or ticket refunds.

Philippine Airlines is contracted by Zest Air to provide special flights for Zest Air's stranded passenger starting in Davao tonight under PAL Express.

Zest Air operates a fleet of 11 Airbus 320's serving 14 destinations consisting of 35 flights out Manila, 8 flights out of Kalibo and a flight from Cebu.

Operations of Air Asia is not affected but the airline's aircraft will not be permitted to land at NAIA Airport.

The Suspension Order was issued by Captain John Andrews, CAAP Deputy Director General.

Earlier, CAAP placed Zest Air under "heightened" surveillance effective August 2 following a series of flight cancellations brought about by alleged mechanical problems of its aircraft.

Recent incident at Tagbilaran Airport Tuesday sealed Zest Air's fate when its ailing Airbus 320 plane obstructed the runway due to mechanical problems with the engine resulting to closure of the airport for commercial traffic.

 Zest Air’s will remain suspended until further notice.

PAL Wants Return to Haneda

15 August 2013

Philippine Airlines (PAL) wants the Civil Aeronautics Board (CAB) to secure from their Japanese counterpart, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) at least a daily daytime slot pairs (6:00 a.m. to 11:00 p.m.) out of Haneda Airport says Carmelo Arcilla, CAB Executive Director.

Arcilla said that negotiations for the expansion of both countries' Air Service Agreement (ASA) is scheduled next month on September 11-13 after Japanese Prime Minister Shinzo Abe expressed satisfaction with the safety efforts initiated by the Philippines' Civil Aviation Authority (CAAP).

Arcilla added that the new bilateral aviation talks with Japan could open flights between Haneda Airport and Manila, Cebu and Davao.

PAL discloses that it wants to fly to Haneda after Japan Airlines and ANA manifested its desire to add flights to Tokyo-Haneda aside from existing Tokyo-Narita services. Haneda is the domestic hub of JAL, ANA and most of Japan's airlines and is closer to central Tokyo as compared to Narita.

Following the completion of the fourth runway in 2010, Haneda's operational capacity increased from 285,000 movements to 407,000 movements per year in contrast to Narita's two runway and night landing restrictions. This resulted to increased frequencies on existing routes, as well as bigger capacity for new routes to domestic and international destinations. Tokyo-Haneda Airport offers 60,000 additional slots for overseas flights a year at the end of March 2014 to which the Philippines would like to get at least 1,460 flights from both day and night slots.

The Philippines is eligible to get the daytime international landing slots at Haneda beginning 2014 which is currently reserved for short-haul East Asia destinations only.

Countries with daytime landing agreements to Haneda includes China, Vietnam, Thailand, Singapore, Indonesia, Germany, France and United Kingdom.

Tokyo-bound airlines, including PAL, NWA and JAL, has been using Narita airport since 1978 at the request of the Japanese Government but it can't grow flights there because the airport closes at night. Flights restrictions are currently imposed by Narita Airport between 11 p.m. and 6 a.m. due to noise concerns by Chiba Prefecture residents. 

PAL has 34 flights per week to Japan while Cebu Pacific has 11 flights per week out of the 45 weekly frequency allocations under the 2008 ASA. Japanese carriers meanwhile utilizes only 21 flight frequency (14 JAL and 7 ANA) per week to Manila.

In the 2002 ASA, there were 42 weekly frequency allocations, 21 of which was taken by Philippine Carrier while 40 flights was utilized by Japanese carriers.

CAB disclosed that it's not clear yet how many more flights will be granted by Japan considering its previous negotiation history, and the existence of 5th Freedom rights granted by the Philippines to other country's carrier. 

Arcilla is hoping that the additional flight frequencies should be substantial as the agreement between the two countries has been there for almost five years without amendments, while other countries ASA's has been re-negotiated  at least once every two years.

Carriers that enjoy fifth freedom rights include Northwest Airlines (now Delta), Egypt Air, Thai Airways and Jetstar Australia. Only Delta Airlines and Jetstar Australia regularly services the route from Manila today. 

PR's London Flight Moved to December

8 August 2013

Philippine Airlines flight to London Gatwick has been moved to December 2013 due to some delays in regulatory approvals.

The daily flight to London Gatwick will be handled by Airbus 340-300.

Ismael Augusto Gozon, PAL senior vice-president for operations said Thursday they can manage to launch only two destinations in Europe before the end of the year.

Philippine Airlines Takes First A321 Delivery

7 August 2013

Philippine Airlines (PAL) has taken delivery of its first Airbus A321.  The aircraft was handed over at the Airbus delivery centre in Hamburg, Germany yesterday and is the first of 64 new Airbus aircraft ordered by the airline in 2012 under a major fleet modernisation programme.  These include 44 single aisle A321s and 20 widebody A330s.

Philippine Airlines has specified a two class layout for its A321s, with 12 seats in Business Class and 187 in Economy.  The airline will operate its new A321s primarily on international routes across the Asian region, as well as on selected domestic flights.

“We are excited about the A321 not only because its size fit our expansion plans, but the flexibility it gives us in matching the aircraft to specific route requirements is tremendous,” said Ramon Ang, President and CEO, Philippine Airlines.  “With the A321 we will be able to add capacity without compromising comfort, offering our passengers a choice between full premium class and a great range of value fares.”

The A321 joins an Airbus fleet at Philippine Airlines that already includes 22 A320 Family aircraft flying on domestic and regional routes, as well as nine in service with its budget subsidiary PAL Express.  The carrier also operates eight widebody A330s on higher capacity routes across Asia and seven A340-300s on its longest services to the United States.

Following the introduction of the A321, Philippine Airlines will take delivery of the first of its 20 new A330s in the third quarter of the year.  The carrier is also currently adding four A340-300s to its fleet for deployment on new non-stop services to Europe, scheduled to begin next month.

PAL Completes Project Winter

Only International Flights

5 August 2013

Philippine Airlines (PAL) is set to complete its fabled Project Winter beginning the next winter schedule when it removes all domestic flights to its network in the country and and start code-sharing flights with affiliate PAL Express, an official of Philippine Airlines disclosed Monday.

"It's a business strategy," PAL President Ramon S. Ang said.

PAL began its project winter in October 29, 2012 when the airline drop most domestic points except Cebu, Davao, Bacolod, Iloilo, Kalibo, Laoag, and General Santos and flight transferred to its low-cost subsidiary PAL Express. 

The airline is expecting 16 aircraft this year consisting of eight A321 and eight A330 which would be delivered starting August and another B777 by November, and some of these narrow and wide-body aircraft deliveries are bound to PAL Express to service major domestic points such as Cebu, Davao, Puerto Princesa and General Santos and expand domestic networks, while the new A330-300s will service the Middle East market.

PAL is poised to become solely an international airline with services to Europe, United States, Canada, Korea, Japan, China and Australia. Domestic traffic will be fed by its subsidiary unit from Terminal 3 while all International flights from both airlines will use Terminal 2.

PAL's Secret Weapon to Long-haul Expansion

4 August 2013
[updated]

Spain -  Philippine Airlines (PAL) secret weapon for long haul profitability takes center stage as Amadeus acknowledges powering up the airlines recent expansion foray to Europe and the Middle East.

Amadeus said its Travel Intelligence Portfolio has provided Philippine Airlines tool where to launch future destinations in Europe, the Middle East, and soon the US since it started its relationship with the airline three years ago.

Amadeus said the airline's expansion to Europe isn't just based on pride but back up by quantitative and qualitative data that supports its profitability, like actual traffic figures, fare matrices, demographics and the like using Amadeus Market Information (MIDT) and Amadeus Air Traffic solutions, according to Hazem Hussein, Head of Airline Commercial, Amadeus Asia Pacific.

“Travel Intelligence is a critical asset in a fast-moving, fragmented industry like travel. However, it is not only about having data, it’s also about having the industry knowledge and analytical capability to turn it into valuable business insights.” said Hussein in a statement.

“Amadeus has all three which puts us in a unique position in the industry to help our airline customers understand their business as well as the challenges and opportunities in the market.” added Hussein.

Philippine Airlines President and COO Ramon S. Ang said that they can make Europe work and has listed European destinations which has substantial passenger traffic going to the Philippines long before they were actually announced last month based on Amadeus figures.

“It is important for us to be able to base our network planning and marketing decisions on complete and reliable data that Amadeus solutions offer.” says Ang on its deal with Amadeus.

What Drives Zest Air's Cancellations?

Empty Seats

2 August 2013

The Civil Aviation Authority of the Philippines (CAAP) has said enough of Zest Airways excuses of cancelling flights as it placed the airline under "heightened" surveillance by safety inspectors following its repeated cancellation of flights due to alleged mechanical problems.

Sources in the industry however discloses that the airline is not generating enough passengers for some of the scheduled flights for which reason they have been cancelled during the past weeks causing inconvenience to its booked passengers.

In July, the carrier cancelled a total of 33 flights mostly going to Kalibo.

Today Zest Air cancelled flight 326 bound for Tacloban.Yesterday the airline cancelled 8 flights all due to aircraft situation problem.

CAAP Deputy Director General John Andrews said that airlines has a habit of cancelling flights with low booking, and just reason out aircraft situation as the problem.

Andrew said they will inspect not only Zest Air aircraft but also other operators who cancels flight due to flight situation problems and find out whether actual maintenance and repair is done and made on the aircraft as has been reasoned out.

European Take-Off

By Naazneen Karmali

Forbes Asia

Ramon Ang Credit: Jay Directo / afp / getty images

As a young man Ramon Ang enjoyed fixing cars. Today he’s in the throes of a bigger repair job: restoring Philippine Airlines, the country’s legacy carrier, to its former glory. 

Ang, who’s been piloting it since Lucio Tan (No. 2) sold a 49% stake last year to San Miguel (which Ang also runs), is banking on an ambitious international expansion to eventually steer the airline back onto a profitable flight path.

After ordering 65 new airplanes to modernize the fleet and launching services to Toronto, Ang got a lucky break in July when the EU lifted a ban on the airline from flying to Europe. (Other airlines, such as John Gokongwei’s Cebu Pacific Air, remain on the blacklist.)

The much awaited green light came after the International Civil Aviation Organization approved the country’s aviation safety standards in March. The country is also awaiting an upgrade from the Federal Aviation Administration that will open up more of the U.S. market. More open skies could boost tourist traffic; with 4.2 million tourists last year the Philippines lags way behind tourist hot spots such as Thailand, which attracts more than five times that number.

For now Ang is busy preparing for a European liftoff after a 15-year gap with initial flights to Paris, London, Rome, Frankfurt and Amsterdam planned for as early as this fall. But experts say it’s a risky move that will further strain the resources of the moneylosing carrier, which reported losses of $95 million last year. “It’s a high-risk venture. Reestablishing an airline on long-haul routes that are intensely competitive is an expensive proposition with huge, upfront costs,” says Brendan Sobie, chief analyst for Southeast Asia at aviation consultancy CAPA.

Ang has taken a contrarian approach since assuming charge, such as withdrawing budget carrier Airphil Express EXPR -0.97% despite the low-cost segment being the fastest growing. As a result, Philippine Airline’s market share in the domestic market, where Cebu Pacific rules, fell from 43% to about one-third in 2012 even as revenues stagnated. A focus on higher-yielding international routes could more than offset domestic declines, says CAPA’s Sobie, “But it will be a long haul.”

Too long for Tan to wait it out. He’s announced plans to sell his remaining stake, and it seems Ang is willing to welcome another strategic investor on board.

 This story appears in the August 12, 2013 issue of Forbes Asia.