Airport Operators in 7 Countries Vie for P17.5-B Mactan-Cebu Project

Manila, Philippines – Operators of international airports in the United States, France, Switzerland, Malaysia, Singapore, South Korea, and India will vie for the first airport project being auctioned off under the Aquino Administration’s public-private partnership (PPP) scheme.

Today’s opening of bids for the P17.5-billion Mactan-Cebu International Airport (MCIA) Development Project will serve as an “acid test” on the Philippine government’s PPP projects that the world will keep an eye on, according to the Department of Transportation and Communications (DOTC).

Operators of the Houston Airports System in the US, Aéroports de Lyon in France, Changi Airport Saudi Ltd. in Singapore, Incheon International Airport in South Korea, Malaysia Airports Berhad in Malaysia, Zurich Airport in Switzerland, and Indira Gandhi International Airport in India have teamed up with local and foreign entities in a bid to bag the transportation infrastructure project.

The international airports operators have joined the seven pre-qualified bidders, which include Metro Pacific Investments Corp. (MPIC)-JG Summit Holdings Inc. Airport Consortium; AAA Airport Partners; Filivest Land Inc.-Changi Airports International (CAI) Consortium; San Miguel Corp. (SMC) and Incheon Airport Consortium; First Philippine Airports Consortium; Premier Airport Group; and GMR Infrastructure Limited-Megawide Consortium.

“We know that the world is watching.  This is the acid test for our PPP program.  The higher the turnout, the more credibility it will mean for our projects,” said DOTC spokesperson Michael Arthur Sagcal.

The National Economic Development Authority (NEDA) Board earlier approved several changes in the original concession agreement to entice more competitive bids from the bidders. The changes include the lengthening of the concession period from 20 to 25 years, the transfer of operation and maintenance of aprons from the grantors to the concessionaire, including the right to derive income from their operations, and the flexibility of the implementation of capacity augmentation.

The government has also agreed to share in the concessionaire’s liability in paying the facility’s real property tax and to increase the period for prohibiting competing airports from 10 years or when the passenger traffic at MCIA reaches 15 million passengers per annum, whichever is later, to 25 years.

The P17.5-billion project involves the construction of a new world-class international passenger terminal building in MCIA, with a capacity of about 8 million passengers per year; renovation and expansion of the existing terminal; installation of all the required equipment; and the operation of both new and existing facilities.

When the new international terminal building is completed, the existing terminal, which currently caters to both domestic and international passengers, will be converted into an exclusively-domestic passenger terminal for the concession period.

Source: Kris Bayos, The Manila Bulletin

Clark International Airport Eyes Higher Fire Safety Rating

CLARK International Airport hopes to receive the highest fire safety rating upgrade from the International Civil Aviation Organization (ICAO) in the third quarter next year, a top official said.

The airport currently has a safety rating of Category 9 and is expected to be upgraded to Category 10 by the third quarter of 2014, Clark International Airport Corp. (CIAC) President and Chief Executive Officer Victor Jose I. Luciano told BusinessWorld.

CIAC will purchase two brand new Rapid Fire Trucks to beef up its emergency capabilities, Mr. Luciano said in a text message. The trucks will be able to handle even the world’s largest passenger aircraft, the Airbus A380 and Boeing 777.

“The Middle East carriers, particularly Emirates Airlines, have a large fleet of [Airbus] A380s, and if at all, it would be the first in history in the Philippine Aviation that an A-380 will fly commercially in the country,” Mr. Luciano noted.

Emirates flies to Clark daily. The fire trucks will be funded by the Department of Transportation and Communications (DoTC) and have a projected cost of P120 million.

The management of the airport has yet to file a formal application with the ICAO, however.

“We haven’t filed an application yet. We will file once the trucks arrive,” Mr. Jose said.

The trucks are expected to arrive in September next year.

Meanwhile, seven commercial aircraft were diverted Wednesday to the Clark International Airport due to air traffic congestion at the Ninoy Aquino International Airport (NAIA).

Flights from AirAsia Zest, Cebu Pacific, Etihad Airlines, Philippine Airlines Express, and Singapore Airlines were diverted.

The government is looking into the possibility of having a dual-airport system by further expanding, improving, and modernizing the capacity of Clark Airport and NAIA.

Aviation groups and business clusters have repeatedly expressed their support for the prospect.

Clark Airport has recorded 1.3 million international passengers this year, more than double the 600,000 passengers in 2012.

Source: Lorenz Christoffer S. Marasigan, Business World Online 

PH Airline Passenger Traffic Posts Flat Growth

Domestic passenger traffic in the first nine months of the year contracted, and was likely caused by such factors as congestion issues at the country main hub, new airline regulations and the armed conflict in Zamboanga last September, the head of the Civil Aeronautics Board (CAB) said.

Data from the CAB showed that combined passenger traffic from six domestic carriers hit 15.42 million people, down about half a percent, from January to September 2012.

Data showed that load factor increased to 75 percent during the nine-month period, from 73 percent last year, while cargo volume also increased.

“We are looking into this but the dip was really caused by a variety of factors,” CAB executive director Carmelo Arcilla said in an interview Friday.

Among the issues cited was the lengthening of scheduled ground times for domestic flights, a new safety requirement ordered by the Civil Aviation Authority of the Philippines.

Under the rule, a minimum 40-minute ground time was imposed, giving pilots and crew more time to rest in between flights, but it also means fewer flights in a given day.

Arcilla likewise noted CAB’s own rules to reduce flights to certain airports not “night-rated.”

The armed conflict in Zamboanga also caused  commercial flights there to be suspended for a period, and then there’s the lingering problem of congestion at Ninoy Aquino International Airport.

“One issue was the conflict in Zamboanga and the turmoil it caused,” Arcilla said.

“Manila is always a factor because it’s a hub for domestic and international services,” he said.

The third quarter is also traditionally slower, given this is the time of the year when the country gets visited by several storms, he noted.

These factors only added to what was expected to be a slower quarter.

Arcilla, nevertheless, expected traffic to pick up in the fourth quarter, because of increased travel from the All Saints and All Souls holidays and the upcoming Christmas season.

Data from the CAB showed that Gokongwei-led budget carrier Cebu Pacific Air led in terms of passengers carried.

The airline carried 7.83 million passengers during the period, versus 6.98 million in the same period last year, for a market share of about 50 percent.

This was followed by Philippine Airlines, which carried 2.09 million, and sister-firm PAL Express, which carried 3.15 million passengers.

Zest Air, which has since been renamed AirAsia Zest, carried 1.51 million during the nine-month period.

SeaAir, which nows operates as TigerAirways Philippines, carried 731,630 passengers while AirAsia Inc. carried 98,269, the CAB data showed.

The total amount of cargo carried during the period was 158.43 million kilograms, up almost 8 percent.

Total international passengers during the period hit 13.05 million. However, comparative data from the CAB was not available.

The largest domestic carrier in terms of international flights was Philippine Airlines, which carried 3 million passengers on its international flights during the nine-month period.

Source: Miguel R. Camus, Philippine Daily Inquirer

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Air Asia To Get Six Planes From Malaysia

Photo Courtesy of Angelo Agcamaran

LOW-COST CARRIER AirAsia, Inc., the operator of AirAsia Philippines, will receive six aircraft from its Malaysian parent this quarter in a bid to bolster the group’s presence in the country.

Two of the aircraft will be used by Yao-led budget airline AirAsia Zest (formerly Zest Airways), while the rest will be used by AirAsia Philippines for its international operations, AirAsia Bhd. said in a statement attached to a disclosure to the Malaysian bourse.

“With a net increase of two additional aircraft in the fourth quarter, AirAsia Zest will increase international frequencies from Manila and Kalibo to Kuala Lumpur, Kota Kinabalu, Incheon, Busan, and Shanghai and launch new flights from Manila to Miri and Macau, from Cebu to Kuala Lumpur, and from Kalibo to Shanghai,” it said.

“Three new domestic routes from Cebu to Cagayan [will also be added],” it added.

In August, unresolved safety issues had prompted aviation regulators to suspend Zest Air’s operations. The suspension has been lifted following the airline’s compliance of six safety issues.

Zest Air has recently received regulatory approval from the Securities and Exchange Commission, from the Civil Aeronautics Board, and from the Civil Aviation Authority of the Philippines last September to undergo rebranding.

Source: Lorenz Christoffer S. Marasigan, BusinessWold Online

Cebu Pacific Seeks Permit To Fly to the US

MANILA – The operator of Cebu Pacific has asked the US Department of Transportation for a renewal of its permit to fly to the country.

“Although Cebu has not yet commenced operations under its exemption, it wishes to renew its exemption so that service may begin without delay when appropriate,” Cebu Air Inc (CEB) said in its application posted on the website of regulations.gov.

“The services for which renewal is requested are therefore fully consistent with the bilateral. The United States has consistently recognized that inclusion of a service in  a bilateral agreement to which the United States is a party and the designation of a qualified foreign carrier for such service satisfy all relevant public interest requirements for grant of exemption authority,” Cebu Pacific said.

It holds exemption authority to engage in scheduled foreign air transportation of persons, property and mail from the Philippines via intermediate points to Honolulu, San Francisco, Los Angeles, Guam, Saipan and four additional points in the US, subject to the condition that the airline conduct all operations pursuant to a wet lease.

Unlike dry leases, which involve borrowing an aircraft, a wet lease includes the crew.

From its five hubs in the Philippines, Cebu Pacific serves numerous domestic and international destinations with its modern fleet of 39 Airbus aircraft and eight ATR 72-500 aircraft — the youngest fleet in the Philippines and one of the youngest in Asia.

The Philippines has a Category 2 status, which the US Federal Aviation Authority (FAA) bestows on countries that fail to comply with the International Civil Aviation Organization (ICAO) Standard and Recommended Practices (SARPs) on international civil aviation safety.

The FAA in 2008 slapped the Category 2 status on Manila, thereby preventing Philippine carriers from expanding in America.

The Civil Aviation Authority of the Philippines (CAAP) had said it expects the FAA to bring back the country to Category 1 within the year after ICAO removed the country from a list of member-states with unresolved significant safety concerns (SSCs).

Last July 10, the European Union (EU) lifted its ban on Philippine Airlines (PAL), allowing it to resume flights to European destinations after a three-year absence.

The European Union earlier removed Philippine Airlines on a blacklist from flying skies in Europe.

Cebu Pacific posted a net loss of P750.12 million in the July to September period, a reversal from the P538.44 million net income in the same three months of last year.

Despite the third-quarter loss, the country’s leading budget airline closed the first nine months with a profit of P664.08 million, but lower than the P2.27 billion last year.

Revenues in the third quarter reached P8.86 billion, up 8.8 percent from last year’s P8.14 billion. This brought the nine-month tally to P30.58 billion, higher than last year’s P27.87 billion.

Source: Darwin G. Amojelar, InterAksyon.com

CAAP: Cebu Pacific Petition To Fly To EU Has To Wait

MANILA, Philippines – Budget carrier Cebu Pacific will have to wait until March of next year to mount flights to Europe, according to the Civil Aviation Authority of the Philippines (CAAP).

CAAP Deputy Director-General Capt. John Andrews said that Cebu Pacific’s petition before the European Union (EU) for the lifting of a ban that prohibits the airline to fly to Europe will have to wait until 2014 as government is focused on the relief and rehabilitation of areas hit by Typhoon Yolanda (Haiyan).

When asked if Cebu Pacific has already met EU representatives, Andrews said: “No. That is being postponed to January now because of the present situation.”

Andrews noted that the budget carrier is likely to make its presentation to EU in January, but EU reviews airlines’ compliance to aviation safety standards every March and November.

Cebu Pacific was supposed to seek EU’s nod to fly to Europe this month.

In July, EU lifted a ban on legacy carrier Philippine Airlines (PAL). PAL has resumed flights to Europe, restarting its London service on November 4.

US flights

Aside from flying to Europe, Cebu Pacific is also working on mounting flights to the US particularly Guam and Hawaii. The Philippines expects its aviation safety status to be upgraded by the US Federal Aviation Administration (US FAA) back to Category 1 within the year. This will allow local airlines to open new routes and launch additional flights to the US.

The country’s status was downgraded by the US FAA upon the recommendation of the International Civil Aviation Organization in 2008 when CAAP failed to pass the safety standards for the oversight of air carrier operations.

Source: Rappler.com

Cebu Pacific To Fly Direct to Narita, Nagoya Starting March 2014

Budget airline Cebu Air Inc. (Cebu Pacific) is set to become the first low-cost carrier to fly direct to Narita and Nagoya in Japan starting March 30 next year.

Candice Iyog, vice president for marketing and distribution of Cebu Pacific, said the budget airline will also begin flying to Osaka daily from December 20.

“With Cebu Pacific’s trademark lowest fares, travelers from Japan now have Tokyo, Nagoya and Osaka as jump-off points when exploring the Philippines’ world-renowned beaches and diving destinations,” Iyog said.

She added the more frequent flights will help boost tourism. “With more flights to the Philippines, we believe Japan has the potential to be as big as South Korea when it comes to foreign tourist arrivals,” she said.

Daily direct flights to Narita in Tokyo and to Nagoya four times a week will be on brand new Airbus A320 planes.

The Philippines and Japan inked a new air service agreement increasing the number of flights between Manila and Narita to a total maximum of 400 per week from the previous 119.It also allowed 14 flights per week between Manila and Haneda and unlimited air traffic rights between points in the Philippines except Manila and points in Japan except Haneda.

Safety concerns found by the International Civil Aviation Organization (ICAO) in 2008 prompted Japan to impose restrictions on Philippine carriers.An ICAO audit in February found the Civil Aviation Authority of the Philippines had addressed those safety concerns, however.

Cebu Pacific is in a middle of a $4 billion refleeting program aimed at acquiring 49 new Airbus aircraft to augment its existing fleet of 10 Airbus A319s, 27 Airbus A320s, two Airbus A330s, and eight ATR-72 500s.

The airline is scheduled to accept the delivery of 15 more brand-new Airbus A320s, 30 Airbus A321neos, and four Airbus A330 aircraft between 2013 and 2021.

Source: JDS, GMA News

CAAP Sees Category 1 Upgrade Next Week

MANILA, Philippines – The Civil Aviation Authority of the Philippines (CAAP) is confident that the Philippines will finally get an upgrade of its safety rating from the US Federal Aviation Administration (US-FAA) as early as next week which would allow airlines from the country to expand and mount additional flights to the US.

Capt. John Andrews, deputy director general of CAAP, said in a hastily called press conference that a team from the US-FAA is due on Monday for a mini audit and a possible major announcement.

Andrews said the team is composed of US-FAA division manager for Flights Standards Service xxx xxx and area manager for Asia Pacific James Spillane, is scheduled to arrive on Monday and meet with aviation authorities.

“This Monday, John Barbagallo, who is the manager of the flight service department of the US FAA, together with James Spillane who is the area manager of Asia Pacific Rim, are going to CAAP for the possible lifting of the ban of the Category 2 on the Philippine aviation,” Andrews revealed.

The US FAA downgraded the safety rating of CAAP in 2008 to Category 2 from Category 1 upon the recommendation of the United Nation’s International Civil Aviation Organization (ICAO).

Category 2 indicates that the FAA had assessed that the Philippines’ civil aviation authority had failed to comply with ICAO safety standards for the oversight of air carrier operations. While in Category 2, Philippine air carriers are permitted to continue current operations to the US under heightened FAA surveillance.

Barbagallo was the “bearer” of bad news when the Philippines’ aviation safety rating was downgraded five years ago.

“Now this is significant because five years ago when the Philippines was rated or given this Category 2 rating, it was also Barbagallo who headed the contingent that saw that we were deficient in safety aspects,” Andrews said.

He pointed out that several teams from the US-FAA have visited the Philippines over the last four months as part of the evaluation process of the country’s aviation safety standards.

“He is coming back here after several FAA representatives he had sent over for the past several months made reports to him that we are ready for lifting,” the CAAP head added.

Andrews said the Philippines would get the much deserved aviation safety rating upgrade back to Category 1 from the US-FAA within the year, otherwise, he would quit his job.

“We are still maintaining the position that we will be lifted before the end of the year. If that does not happen the buck stops with me. If this does not happen before the end of the year I will no longer be here. That is my commitment,” he stressed.

The CAAP official cited the decision of ICAO late last February to lift the remaining aviation safety concerns, paving the way for the lifting of the ban imposed by the European Union in 2010 wherein airlines from the Philippines were barred from entering European airspace.

“I am confident that there are no more safety issues as far as we are concerned and this has been confirmed by no less than the EU and ICAO,” Andrews added.

Once the Category 2 rating is upgraded to Category 1, Andrews said, national flag carrier Philippine Airlines (PAL) could use more fuel efficient aircraft to replace old aircraft being used to ply certain routes to the US.

He added that the Philippines would likely seek the opening of new routes to the US.

Source: Lawrence Agcaoili, The Philippine Star and Rudy Santos, philstar.com

Air Talks with Russia Delayed

AIR service talks between the Philippines and Russia have been postponed following a request by the latter country to push the meeting back due to internal concerns.

“Philippines-Russia talks scheduled in Manila did not push through, at the request of Russia, because of a pressing matter in Russia,” Civil Aeronautics Board Executive Director Carmelo L. Arcilla told BusinessWorld in a text message late Wednesday.

Mr. Arcilla said that the air service panel of the Philippines is not privy to the “pressing issue” in Russia as it was an internal concern.

“It will be reset to another date,” he added, noting that the two countries have yet to reschedule the talks.

The air service talks with Russia were originally set for Nov. 12-13.

Currently, the two states have a mutual air service agreement, though under the contract, neither country has seat entitlements. Only contained in the contract are the route structure and the general agreement.

The old agreement, forged in the 1960s or 70s, is said to need updating as the Philippines hopes to capture the Russian market.

“It’s a fast-growing economy with increasing number of travelers. It has good market potential,” Mr. Arcilla said.

No local airline currently services any Russian route, but Ang-led Philippine Airlines (PAL) has commenced chartered flights with Russian carrier Vladivostok Air.

The chartered flights are carried out in partnership with Primorsky Agency of Aviation Companies TM Biletur, the biggest tour company in Far East Russia, PAL has said.

Data from the Tourism department showed that 21,736 Russians visited the Philippines during the first 8 months of the year, which represents a 32.53% increase from the number of Russian tourist arrivals in the same period last year.

Source: Lorenz Christoffer S. Marasigan

Philippine Airlines Boost Japan Connections

 

THE liberal bilateral air service agreement hammered out between the Philippines and Japan in September is already bearing fruit, while travel consultants are hoping that the increased frequencies and competitive airfares will stimulate the market.

Under the terms of the pact, flight allowances have soared from 119 to 400 a week. These services will be mounted by route newcomers PAL Express, AirAsia Zest and Tigerair Philippines, in addition to Philippine Airlines (PAL) and Cebu Pacific Air (CEB), which already fly to Japan.

The agreement also clears flights from points outside Manila such as Clark, Cebu and Kalibo, to new destinations like Tokyo-Haneda, Hiroshima, Sapporo and Okinawa.

PAL commenced seven additional weekly Manila-Tokyo (Narita) flights on October 27, while CEB will add three weekly Manila-Osaka flights on December 20. The rest of the approved flights will begin in 1H2014.

Noting that it is “expensive to go to Japan”, Mita Custodio, operations manager of King of Travel, hopes the agreement will pave the way for more competitive fares, cheaper hotels and tour packages. A hotel in a less popular location can still cost US$180 a night.

While PAL currently dominates Manila-Japan routes, more airlines and more non-stop flights mean more travellers, he concluded.

Josie Santos, counter manager for Asia International Travel, added that the Manila-Tokyo/Osaka route is underserved.

An incentive group had to fly to Japan via Hong Kong as non-stop flights from Manila were not available, Santos shared.

Japan is the Philippines’ third largest source market for tourists.

Source: Rosa Ocampo, Manila