5J to fill void left by PAL Domestic

October 17, 2012

Cebu Pacific announced yesterday that it will be mounting more flights to and from Butuan, Cotabato, Cagayan de Oro, Dumaguete, Dipolog, Legazpi, Puerto Princesa, Roxas, Tacloban, and Zamboanga as it fills the void left by Philippine Airlines (PAL) which recently realign operations to focus on major destinations in the Philippines. 

Cebu Pacific vice president for marketing and distribution Candice Iyog said that they will introduce additional flights when new planes arrive.

“We are just waiting for our new planes to arrive to cover key local destinations and mount additional flights,” says Iyog. 

The company has already launch more flights out of Cagayan de Oro, Puerto Princesa, Tacloban and Zamboanga, as part of the 10 domestic routes CEB is launching in the second half of 2012. It recently introduced new routes from Davao to Dipolog, Cagayan de Oro to Zamboanga, Puerto Princesa to Iloilo and to Davao, and Tacloban to Iloilo.

According to the airline, its Cebu-Mindanao passenger traffic rose 36 percent year on year. Traffic between Cebu and other points in the Visayas grew 53 percent. Meanehile, its passenger traffic between Luzon and Cebu also increase by 49 percent, while Luzon to Manila traffic adds another 27 percent.

SEAIR taps AAG for Pilot Training

By Lawrence Agcaoili
The Philippine Star

October 09, 2012

MANILA, Philippines - Budget carrier Southeast Asian Airlines (Seair) has tied up with UK-based Alpha Aviation Group (AAG) for the training of its pilots in anticipation of a surge in demand for pilots over the next 20 years.

Seair chief executive officer Patrick Tan said the tie-up would help the airline meet safety demands for international and domestic passengers.

“This partnership will help Seair meet the demands for safer travel requirements for local and international passengers. To keep pace with industry growth, we are currently expanding our aircraft fleet and working to equalize the supply and demand of pilots in our company,” Tan stressed.

A report from Boeing showed that the need for pilots would skyrocket, with the demand for 465,000 new pilots in the next 20 years to sustain the airline industry. The biggest demand would come from the Asia-Pacific region, where almost 185,600 new pilots will be required.

With continuous growth in air traffic of low-cost carriers, prospects for pilots and technical professionals look bright.

AAG Philippines general manager Nigel Harris said the agreement with Seair would provide training to the airline’s pilots.

“Filipino pilots have competitive advantage in the global aviation industry. This is why we are focused on the development of highly trained and certified pilots,” Harris said.

Last August, Tiger Airways Holdings Ltd., through Road Aviation II Pte Ltd, completed the purchase of a 40 percent stake in Seair for a total consideration of $7 million.

Seair operates two Airbus A319s and three A320s and more aircraft are expected to arrive to beef up its fleet. It has been in operating in the Philippines for 17 years and now flies to four regional and nine domestic destinations.

AAG Philippines is one of three academies under AAG, which delivers specialist training solutions to the international commercial aviation community. AAG Philippines is also an approved training organization (ATO) and a certified type rating training organization (TRTO) for the Airbus A320. It operates and maintains an A320 Level D full flight simulator at its training center in Clark, Pampanga.

“Pilots will find the flexible use of AAG’s training devices, instruction material, and examination tools optimally aligned to their needs. AAG will continue to champion talent development in the face of demand in the aviation industry,” he added.

Earlier, AAG also entered into an agreement with Zest Airways Inc. to train the airline’s pilots.

Plane’s nose wheel gets stuck at Cotabato Airport Again

By Eric B. Apolonio
Manila Standard

October 8, 2012

A Cebu Pacific (CEB) Airbus 320 flight from Cotabato to Manila was cancelled before the weekend when the plane’s nose wheel got stuck while the aircraft was making a 360 degree turn on the runway prior to takeoff, officials said on Sunday.

CEB Vice President for Marketing and Distribution Candice Iyog said the flight was called off and the Cotabato Awang Airport, which serves Maguindanao province and neigboring areas, was immediatley closed down.

Iyog said the passengers were accommodated in the next flight, and she appealed for public understanding because the incident “was beyond our control.”

Zest Air A330 Ready for Mid East

By Lawrence Agcaoili
The Philippine Star
October 08, 2012

MANILA, Philippines - Zest Airways Inc. is spending at least $240 million for the lease of six Airbus 320 aircraft to beef up the airline’s existing fleet that service both domestic and regional destinations.

ZestAir senior vice president for commercial and external affairs group Reynaldo Rodriguez said two of the A320s are expected to arrive this year and the other four would be delivered next year.

“One will arrive by the end of the month or early November, while the second one will come in by the end of November or early December in time for the Christmas Holidays,” Rodriguez said.

By the end of the year, he said ZestAir would have more or less 15 aircraft of which eight are company-owned.

He said that four additional A320s are expected to arrive by the second and third quarter of next year and would serve the airline’s regional routes.

The lease price of each A320 is around $40 million.

Rodriguez said existing shareholders led by Amb. Alfredo Yao would finance the lease of additional aircraft.

On top of the six aircraft, he revealed that the airline is also keen on leasing two wide-bodied A330 to serve long-haul routes particularly in the Middle East.

“We are negotiating for two A330s and we hope to operate that by October of next year,” Rodriguez said.

He said the airline has existing flight entitlements in Bahrain and Kuwait and is negotiating for seat entitlements in the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA).

The Philippine government, through the Department of Transportation and Communications (DOTC) and the Civil Aeronautics Board (CAB), successfully concluded air talks with UAE and Saudi Arabia.

Yao announced last July that the company was pursuing talks with strategic investors including Hainan Air of China for a possible 40 percent stake in ZestAir in preparation for the airline’s plans to go public over the next two years.

 “It is still ongoing and we don’t know what will happen. Hopefully (we complete negotiations) this year. In the airline business you cannot do it by yourself and it is better if you have a partner,” Yao said.

Aside from Hainan Air, flag carrier Philippine Airlines – a joint venture between businessman Lucio Tan and diversified conglomerate San Miguel Corp. – and Cebu Air Inc. (Cebu Pacific) of taipan John Gokongwei have expressed interest in ZestAir.

Zest Air is currently under a five-year refleeting program which aims to add up to three aircraft to its fleet every year. It has an existing fleet of 13 Airbus A320 and nine turbo-propped engine aircraft.

MIAA Supports Philippine Arts

PAL starts due deligence on Zest Air

Zeroes in landing slots at NAIA

October 4, 2012

Philippine Airlines (PAL) President and Chief Operating Officer Ramon Ang is not about to stop his buying spree as he starts investment negotiation with AMY Holdings for management control of low cost carrier Zest Airways, as he unleashed new strategy of acquiring more landing slots at Ninoy Aquino International Airport (NAIA) in case its planned airport project goes nowhere.

Backed by the hugely successful conglomerate San Miguel Corporation, with US$ 416 million (17.5 billion pesos) net income in 2011, they have plenty of reasons to spend the money for future growth.

Alfredo M. Yao of AMY Holdings is willing to sell the the airline “lock, stock and barrel” according to Donald Dee, Airline Chairman, with the primordial consideration being the price of the buy-in. People from PAL is already making due diligence with the airline.

“It should be an offer we cannot refuse,” Dee said adding the sale of Zest Air could be concluded before the end of this year.

PAL investments in Zest Airways is seen as a boost to the airlines cash flow, which has seen operations bordering the red line to some of its domestic network as a result of intense competition by low cost carriers in domestic sector. 

Brian Hogan, Zest Air Chief Executive Adviser, said recently that the carrier is not "making money" in the domestic market because of the very expensive jet fuel. Hogan was the Chief Executive Adviser of Air Philippines Corporation who transformed the airline to Airphil Express to become the country's second biggest LCC, before he transferred to Zest Air . 

"I would tell you right now. I don't believe any airline is making money. Cebu Pacific is probably closer because they have a more established business and they charge baggage and all that. You've got to balance the domestic and international to break even," says Hogan.

"Its not making money so for us, I believe the play is to fly regional outside Manila," he added.

Zest Airways cut its daily flights to Virac, Catarman and Calbayog from Manila last July 1, with a plan to remove its daily flights to Marinduque, Masbate, Busuanga and Tablas in Romblon.

The airline has been offered foreign equity sale to Hainan Airline Group of China. However, negotiations with Hainan Airlines fell  after it failed to secure management control of the airline. Under the 1987 Philippine Constitution, 60% of the airline's corporate shares needs to be controlled by Filipinos. Although investment agreement may be agreed for possible  management control, both parties however failed to agree on the terms.

Zest Air was also in exploratory talks with Cebu Pacific and Air Asia Philippines, with the former almost exhausting all its landing rights, while the latter having problems securing landing rights at Manila Airport where the government already stopped granting new landing rights due to airport congestion.

Zest Air is set to operate 14 Airbus 320 planes by end this year. The Civil Aeronautics Board said that the airlines average load factor hovers around 70 percent on the routes which it flies into, making their operation viable.

The airline mostly flies to China, and Korea from its hub in Kalibo, Cebu and Manila and flies locally to Kalibo, Bacolod, Busuanga, Calbayog, Catarman, Cebu, Davao, Iloilo, Legazpi, Marinduque, Masbate, Puerto Princesa, San Fernando, San Jose, Tablas, Tacloban, Tagbilaran and Virac.

In 2011, the budget airline flew 2.3 million domestic and international passengers. ZestAir cut its passenger traffic target this year to three million from the earlier goal of 3.5 million due to suspension of some domestic flights. Of the revised target, 2.5 million will come from domestic flights and 500,000 passengers will come from international flights.

Manila ready for ICAO Audit

Pass ICAO, FAA follows with Cat 1 

October 2, 2012

William K. Hotchkiss III, Director-General of Civil Aviation Authority of the Philippines

The International Civil Aviation Organization (ICAO) will send safety oversight audit team this month to conduct fresh audit of the Philippine Civil Aviation to find out whether the country has made substantial progress in addressing the Significant Safety Concerns (SSC) it issued on the Philippines on October 19, 2009 under the Universal Safety Oversight Audit Programme.

“ICAO notified us that they will be sending an audit team towards the end of October,” says William K. Hotchkiss III, Director-General of Civil Aviation Authority of the Philippines (CAAP).

Hotchkiss said that they already addressed most of the major concerns that were brought to the attention of the government, and upon instructions of President Aquino and Secretary Mar Roxas they already prioritized ICAO compliance.

“ICAO’s SSC is priority. We need to get first the ICAO certification because we are a signatory to it. After that we'll address the FAA matter,” he said.

 “If we can address ICAO, we have no problems with FAA" Hotchkiss adds.

CAAP already informed the US Federal Aviation Administration (FAA) of the Philippine Governments change in priority plans last July.

ICAO found 88 safety violations affecting 278 out of 987 Convention Protocols, indicating a 28% 'lack of effective implementation' of aviation safety policies which it classified as Significant Safety Concern (SSC) the Philippines need to address immediately.

Hotchkiss noted that ICAO and FAA concerns are essentially similar and they are being addressed with the help of ICAO advisers who are in Manila.

ICAO has send to the Philippines Compliance Personnel to help and oversee the country's implementation of SSC's. Two concerns remained pending, and that is lack of qualified training personnel which CAAP is addressing, and of a standardized curriculum for the training of inspectors, which incidentally are also the remaining concerns of FAA after their review conducted in January this year.

Hello Frankfurt!

PAL to go Europe after Toronto, Awaits ICAO audit this month, and to join Oneworld Alliance

October 1, 2012

Philippine Airlines (PAL) has outline its move to fly Europe next as Felix Cruz, PAL Vice President Marketing Support, confirmed the airlines upcoming planning application to the European Union after The International Civil Aviation Organization (ICAO) schedules audit this month to review Significant Safety Concerns (SSC's) of the country's aviation industry.

“We hope for a partial lifting of the EU ban, at least for us”, says Felix Cruz. 

PAL is leaning on the same policy EU granted to another Asean carrier which country was likewise barred from entering European Airspace. Garuda Indonesia was granted exemption to fly Europe and has regular flights to Amsterdam.

Cruz said the airline is likely to start flying Frankfurt which used to be its largest European operation followed by London and Paris next year. They will be operated by Boeing 777-300ER one of which is scheduled to arrive by November and two other frames next year. The airline also awaits arrival of eight A330-342 that will see the plane flying to Australia and Japan, and maybe Europe. 

“We want to fly to New York, add extra flights to our current network in the USA but we wait for the US FAA to upgrade again Philippines civil aviation to category 1 from category 2” says Cruz. 

“Honestly, there is little we can do but the government is working hard for that” adds Cruz.

Cruz said that they will add more flights to Australia. He said they will fly to Darwin which could start by early next year. 

In the ASEAN region, PAL will boost frequency to Indonesia and will fly later to Cambodia, Laos and Myanmar.

“ We already boosted the total number of flights to Jakarta and opened Bali earlier this year”, added Cruz. 

Cruz said that PAL is heading for Oneworld Alliance and is currently in the process of upgrading its IT with Sabre ticketing reservation system, which could pave the way to a future membership with Oneworld scheduled for 2014. PAL membership to the alliance is sponsored by Cathay Pacific.