A FIRST IN 10 YEARS | Domestic Air Travel Contracts, Calamities Take Toll on Passenger Traffic


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MANILA – Domestic air travel contracted for the first time in nearly a decade mostly because of a series of natural and man-made calamities.

Data from the Civil Aeronautics Board (CAB) show that the number of domestic passengers fell by 1.1 percent to 20.3 million last year from 20.6 million in 2012. This was the first time since 2004 that domestic passenger traffic contracted, with the decline happening amid local airlines’ capacity expansion.

In the previous eight years, the domestic market had been growing by double digits.

The drop in domestic air traffic was in contrast to the 3.5 percent increase in international passengers to 17.34 million in 2013 from 16.74 million the previous year.

Porvenir Porciuncula, deputy executive director of CAB, blamed the decline in domestic traffic on a series of typhoons, the earthquake in Central Visayas and the short-lived attack by the Moro National Liberation Front (MNLF) in Zamboanga City.

“The traffic has been affected by a series of calamities and the Zamboanga siege,” Porciuncula said, adding that the tourist cancellations in the Visayas also dampened international traffic.

For 2014, Porciuncula expects domestic and international traffic to return to their previous growth path, as foreign tourists rebook their cancelled flights.

Cebu Pacific remains the country’s leading domestic carrier, with 10.2 million passengers, up eight percent from 9.5 million in 2012. The Gokongwei-led budget carrier also enjoyed a 3.4 percent increase in international passengers at 2.82 million from 2.73 million the previous year.

“It is an exciting time for Cebu Pacific and the Philippine aviation industry as a whole. These results show that there is indeed room for growth in the industry and we look forward to working closely with the government on initiatives aimed at realizing the Philippines’ full tourism and trade potential,” Jorenz Tanada, spokesperson of Cebu Pacific said.

Philippine Airlines (PAL) flew 2.584 million passengers, down by 36 percent from 4.1 million in 2012. In August last year, PAL transferred almost all its domestic flights to PAL Express, except those for Cebu, Davao, and Kalibo.

The flag carrier’s international passenger traffic climbed five percent to 4.15 million from 3.95 million in 2012.

PAL Express flew 4.35 million domestic passengers, lower than the 4.44 million in 2012.  Likewise, its international passengers decreased by 36.2 percent to 115,959 last year from 181,844 in 2012.

Air Asia Inc, which stopped operations in Clark, recorded 157,327 domestic passengers in 2013, a 0.8 percent increase from 158,519 the previous year.

The local unit of the Malaysian airline carried 215,229 international passengers from 110,920 in 2012.

Air Asia Zest’s domestic passenger count fell by 3.5 percent to 1.99 million in 2013 from 2.06 million in 2012. To recall, the airline was suspended for four days by Civil Aviation Authority of the Philippines due to safety concerns.

Air Asia Zest however enjoyed a 94 percent increase in international passengers to 617,188 last year from 324,237 passengers in 2012.

Tigerair Philippines recorded a 205.3 percent increase in the number of domestic passengers at 969,753  last year compared with 317,897 in 2012.

Tigerair Philippines’ international passenger count dropped by 5.1 percent to 270,344 last year from 284,959 international in 2012.

Foreign carriers reported a 0.32 percent drop in passengers to 9.13 million last year from 9.16 million in 2012.

Data from the Department of Tourism show that the foreign tourist arrivals rose by 9.56 percent to 4.68 million in 2013 from 4.27 million in 2012.

Source: Darwin G. Amojelar, InterAksyon.com 

http://www.interaksyon.com/business/81594/a-first-in-10-years–domestic-air-travel-contracts-as-calamities-take-toll-on-passenger-traffic

Philippines Capacity up 5.4% in 2013; Cebu Pacific Air Commands Half of Domestic Market


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Home to an estimated population of 100 million, the Philippines has experienced a dynamic economic growth in recent years, transitioning from being a country based on agriculture to one based more on services and manufacturing. According to HSBC, the country’s economy is set to become the 16th largest economy in the world, as well as the largest in Southeast Asia by 2050. Benefiting from this emerging economic climate, Philippines air traffic has continued to grow, recording an 18% increase (as measured in annual seat capacity) since anna.aero last looked at this country market two years ago.

The country’s biggest six airports are Manila, Cebu, Davao, Kalibo, Cagayan de Oro and Iloilo, which between them handled a combined 47 million passengers in 2012. According to Innovata schedule data for this February, they feature an 82% share of seat capacity and a 79% share of flights respectively, while the remainder of services are split between a total of 32 airports. Manila, also known as Ninoy Aquino International Airport, is the main international gateway to the Philippines, as it commands 54% and 49% of weekly seats and flights respectively. However, Puerto Princesa, which is PPS Publications’ airport due to having the PPS IATA code, has decreased its weekly seat capacity by 1.8% when compared to the same week last year.

Airport (code) Weekly departing seats Weekly departing flights Destinations served non-stop Airlines
Manila (MNL) 425,362 2,312 78 35
Cebu (CEB) 102,368 669 31 15
Davao (DVO) 39,389 244 10 7
Kalibo (KLO) 30,573 180 13 6
Cagayan de Oro (CGY) 24,275 153 5 3
Iloilo (ILO) 23,339 182 8 3
Source: Innovata / Diio Mi 18-24 February 2014.

Seat capacity up 5.4% in 2013

Examination of Innovata annual capacity data reveals that over 41 million one-way seats were offered on flights to and from the Filipino commercial airports, representing an increase of 5.4% when compared to 2012. At 11%, domestic capacity experienced more growth than the international sector, which managed to increase by just 3.1% over 2012 figures.

Philippines airports capacity shift Change in weekly seats (June 2014 vs June 2013)

Looking at capacity data since 2004, this has increased by over 130% last year, with the domestic market outperforming the international sector, even though the latter recorded 84% growth over this timeframe. Regarding domestic air travel, this has grown by almost 160% owing to Cebu Pacific Air and Philippine Airlines, which have hugely expanded over this period, both increasing coincidentally their capacity by 340% each. Overall, the country has experienced a continuous growth since 2004, with the exception of 2005, when a modest decrease of 1.3% was noted due to the 2004 Indian Ocean earthquake that devastated the Philippines on 26 December.

Cebu Pacific Dominates the Philippines

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The top 12 carriers serving the Filipino market command over 92% of all weekly seats and flights this February. There is no surprise in terms of the dominant player, which despite being almost three times larger than the second carrier PAL Express (formerly Airphil Express ─ the low-cost sister carrier of Philippine Airlines), has managed to grow its weekly seats by 6% when compared to the same week last year. Cebu Pacific, which operates on a total of 61 domestic airport pairs, has a 50% share of weekly seats and flights in the Filipino market, on which it directly competes with PAL Express. Furthermore, the airline serves 33 international routes from the Philippines, with Hong Kong being the most frequently served international destination with a combined 45 weekly flights from Manila, Cebu, Iloilo and Clark.

Philippines top 12 airlines Weekly departing seats (weekly departing flights)

Source: Innovata / Diio Mi 18-24 February 2014.

Weekly seat capacity has slightly increased by 0.2%, with half of the top dozen carriers recording growth, when comparing data from this February with the same week last year. Emirates, one of the two MEB carriers listed in this year’s ranking, has significantly strengthened its presence in the Filipino market in the last 12 months, including the addition of six weekly flights from Dubai to Clark on 1 October. On the other hand, the flag carrier Philippine Airlines has seen the greatest reduction in the past year, losing over 22,300 or 16% of its weekly seats and falling from second to third position into this year’s ranking. Most of its weekly seat capacity has been transferred to its sister company PAL Express as an answer to Cebu Pacific’s dominance on the low-cost Filipino market.

South Korea is leading international market

The domestic sector is the Philippines’ largest market accounting for 71% of all weekly seats, a slight decline from 73% in February last year. According to Innovata schedule data, a total of 27 countries can be reached non-stop from Filipino airports, with South Korea being the leading international market. More than 2,700 kilometres away, this country market is served by Cebu Pacific, Jeju Air, Air Busan, Korean Air, Asiana Airlines, Philippine Airlines, AirAsia Zest and Jin Air through a combined 182 weekly flights from Manila, Cebu and Clark.

Philippines top 12 country markets Weekly one-way seat capacity

Source: Innovata / Diio Mi 18-24 February 2014.

Capacity to the UAE has shown the most significant growth (68%), with PAL Express, Cebu Pacific and Philippine Airlines all having started serving this country market over the last 12 months from Manila. In the same period, services to China and Qatar have grown by 54% and 53% respectively, with the latter being a new entrant into this year’s ranking, due to Qatar Airways making Clark its second Filipino destination on 27 October and increasing its frequency on the 7,297-kilometre sector between Manila and Doha from eight times weekly to twice-daily. Taiwan has seen the greatest reduction in the past year (-26%), due predominately to the loss of AirAsia’s daily services and AirAsia Zest’s six weekly flights to Taipei Taoyuan.

Kalibo and Cagayan de Oro grow over 20%

Analysis of Innovata weekly seats being offered by the largest six Filipino airports this summer reveals that three of them will experience capacity decreases. In the case of Manila and Davao the decline is less than 1%, but at Iloilo, capacity is down almost 19% as PAL Express cut two routes and both Philippine Airlines and AirAsia Zest will cease their operations at the airport. On the other hand, both Kalibo and Cagayan de Oro will experience capacity growth of over 20%, with the former seeing the addition of six new services, including SilkAir’s thrice-weekly flights to Singapore on 27 May.

Philippines airports capacity shift Change in weekly seats (June 2014 vs June 2013)

Source: Innovata / Diio Mi 17-23 June 2014 and 18-24 June 2013.

Source: http://www.anna.aero/2014/02/26/philippines-capacity-5-4pc-2013/

Philippine Airlines and Cebu Pacific Get Flight Entitlements to Israel


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PHILIPPINE Airlines (PAL) and Cebu Pacific will each get seven flight entitlements to Israel, the top official of the Civil Aeronautics Board (CAB) said.

In an interview, CAB Executive Director Carmelo Arcilla said 14 flight entitlements will be divided equally between PAL and Cebu Pacific.

“Pending the formal resolution on this, we allocated seven to PAL and another seven to Cebu Pacific during our board meeting,” he said.

The CAB is now preparing the formal resolution which, Arcilla said, will be finalized in a week.

Undoubtedly the Philippines' largest carrier in terms of passenger load.
Undoubtedly the Philippines’ largest carrier in terms of passenger load.

PAL has filed with the CAB an application for confirmation of its designation as official Philippine carrier and allocation of 14 frequency entitlements to Tel Aviv.

Separately, Cebu Pacific also filed for designation as official Philippines carrier and allocation of seven flight entitlements to the Israeli capital.

PAL and Cebu Pacific declined to comment, saying they have yet to receive the formal notice.

Last month the Philippines successfully arranged for an amended air services agreement (ASA) with Israel, fielding as much as 21 weekly flights and allowing fifth freedom flights.

Under the new ASA, the designated airlines of each country are entitled to a total of 21 flights per week between any points in the Philippines and Israel.

The air panels of both countries also agreed to three fifth freedom flights per week on one intermediate point in Mumbai and one beyond point, identified as Madrid.

Fifth freedom rights allow an airline to fly between two foreign countries during flights while the flight originates or ends in one’s own country.

This means PAL can fly to India, unload and pick up passengers and proceed to Israel; or unload and pick up in Israel and proceed to Madrid, explained Arcilla.

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The Philippines and Israel also agreed on co-terminal and stopover rights to any third country for the 21 flight entitlements. “This means a Philippine carrier can bring passengers to Tel Aviv and proceed to say, Rome; or bring passengers to Tel Aviv, and pick them up again after several days for onward travel to say, Rome,” explained Arcilla.

For now, the CAB executive said demand to Israel isn’t large “as none of our local carriers are flying there yet. We are not thinking yet of the long-term scenario.

The old ASA between the two countries was inked in 1951. Arcilla said CAB has no records of the previous entitlements because these were not stipulated in the ASA. “Probably, these were in a form of a memorandum of understanding. But presumably it’s a very low number, as was common during that time. PAL used to operate to Israel in the 1950s and 1960s but we don’t have records anymore,” said Arcilla.

The panel is looking forward to sealing another air pact on March 5 and 6, this time with New Zealand.

AirAsia to Open Kalibo-Kuala Lumpur this April


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MANILA, Philippines—Malaysian tourists will soon be closer to savoring the world renowned white sands of Boracay with AirAsia’s opening of direct flights from Kuala Lumpur to Kalibo, Aklan in April.

“As we move towards the attainment of the Asean Economic Community in 2015 and as close neighbors, it is high time for Malaysians and Filipinos to meet, engage and get to know more of each other’s peoples and countries,” Philippine Ambassador to Malaysia Eduardo Malaya said in a statement Friday.

The Kuala Lumpur to Kalibo direct international flight is the first for Kalibo and will fly four times a week starting April 18.

The nearest airport to Boracay is the Godofredo P. Ramos Airport in the town of Caticlan. From there, Boracay Island is just a boat ride away. Presently, only Cebu Pacific and Philippine Airlines Express have regular flights to Caticlan.

The new route of AirAsia will bring tourists closer to Boracay instead of having to go to the Ninoy Aquino International Airport in Manila.

“I have been to Boracay myself- and with its pristine waters, white sands, the bustling beach life, it is indeed one of the world’s best beaches,” Malaya said.

“The embassy considers tourism as a major factor in promoting and developing Philippine-Malaysia relations, notably in our people to people engagement,” he said.

Tourists from the Malaysia going into the Philippines numbered 109, 437 in 2013, the embassy said.

“Aside from the places they visited, what lingers in the minds of travelers after their stay in the Philippines is the warmth and hospitality of Filipinos,” Malaya said.

“I hope the Malaysians are excited enough to plan ahead to pack their bags, sunglasses and sarongs, stock up on sunblock and visit Boracay through AirAsia,” he said.
Source: http://business.inquirer.net/164563/airasia-to-open-kuala-lumpur-kalibo-route-in-april#ixzz2u8CQy4yL 

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Sorry, Diosdado Macapagal: PNoy Allies Move to Rename Clark as Another ‘Aquino’ Airport


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Soon to be called “Clark International Airport”

It looks like the Philippines will have two Aquino international airports before PNoy steps down in mid-2016.

A bill renaming Clark as the “Corazon C. Aquino International Airport” and the Clark International Airport Authority into the “Corazon C. Aquino International Airport Authority” sailed through the joint transportation and government enterprise and privatization committee hearings on Wednesday.

The main proponent of the bill, which will now move to the floor for deliberations, is staunch Aquino ally Pampanga Rep. Joseller “Yeng” Guiao.

Guiao’s father, Bren, was a long-time Pampanga governor first appointed to the position by Cory Aquino after Edsa 1.

It was not clear why the young Guiao wanted to rename Clark after the Edsa 1 heroine when the Cojuangco and the Aquino clans are from the neighboring Tarlac province.

“With the pressing problem of congestion at the Ninoy Aquino International Airport in Metro Manila, the (Cory Aquino International Airport) is being envisioned to be the Philippines’ next premier international airport,” Guiao said in the bill’s preamble.

The proposed name change reflects the vagaries of Philippine politics thought to have been gone out of fashion since the hagiographic rage that afflicted the Marcos regime.

Clark was renamed Diosdado Macapagal International Airport only in 2003, after the daughter of the first Pampango president herself ascended to Malacanang.

With Gloria Macapagal-Arroyo out of power, the airport reverted to its American-era nomenclature, and Diosdado Macapagal was reduced to just being the name of the unfinished budget terminal within the 2,200-hectare Clark civil aviation complex.

Another Guiao bill also wants to rename the adjoining 28,041-hectare Clark free trade zone as the “Cory Aquino Freeport Zone,” abolishing the present Clark Development Corp. in favor of a “Corazon C. Aquino Special Economic Zone and Freeport Authority.”

Philippines to Benefit from EU-ASEAN Open Skies


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MANILA, Philippines – The proposed “open skies” agreement between the European Union (EU) and the Association of South East Asian Nations (ASEAN) is expected to result in higher standards of safety and regulation as well as more reasonable fares for airline passengers.

Transportation Secretary Joseph Emilio Abaya said the ASEAN would have to first achieve a single aviation market as part of the ASEAN integration in 2015 before entering into a comprehensive air agreement with the EU.

“It is still a long way. This is still in its infancy stages. Immediate goal is to first achieve an ASEAN single aviation market. This should be achieved as part of ASEAN 2015,” abaya said.

According to Abaya, the proposed “open skies” between EU and ASEAN would translate to higher safety standards for airlines as well as cheaper fares for airline passengers.

“This will allow competition, higher standards of safety and regulation and more access to flights and more reasonable fares for our people,” he said.

Civil Aeronautics Board executive director Carmelo Arcilla said the EU has been helping the Asean achieve a single aviation market through a project called the Asean Air Transport Integration Project (AATIP) that serves a venue for exchange of info on practices within ASEAN and the EU and capacity building for aviation authorities of ASEAN.

EU

“The proposed EU-Asean comprehensive air transport agreement is a welcome development and is something to look forward to especially so, that the trend in aviation is connectivity and seamless travel. This is also a chance for our airlines to beef up their operations and compete in a bigger field,” Arcilla said.

Philippine Airlines: Cambodia Airlines Deal Still On


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Philippine Airlines

MANILA, Philippines – Philippine Airlines (PAL) on Wednesday denied it is shelving a joint venture deal with Royal Group of Cambodia to form Cambodia Airlines.

“We wish to clarify that on-going preparations for the completion of the comtemplated joint venture agreement between Philippine Airlines, Inc. and Inter Logistics (Cambodia) Co., Ltd. relating to Cambodia Airlines Co. Ltd. are currently being conducted,” PAL said in a disclosure to the stock exchange.

“As such, it is not true that such joint venture project has been ‘shelved’,” it added.

PAL issued the clarification after BusinessMirror quoted the Center for Asia-Pacific Aviation (CAPA) as saying “PAL’s decision to shelve and question the viability of its Cambodian joint-venture project is the right move.”

“The group should focus on the Philippine market, where it has opportunities but challenges including stiff competition from LCCs [low-cost carriers]. It should avoid the temptation of revisiting the Cambodian project or pursuing any other potential overseas joint venture,” the CAPA said.

PAL announced it was forming a joint venture with Inter Logistics (Cambodia) last year. However, it has not been finalized yet.

Source: http://www.abs-cbnnews.com/business/02/12/14/pal-says-its-still-pursuing-cambodia-airlines-deal

Local Airlines Seek More Entitlements to Singapore


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Philippine Airlines

MANILA – The country’s airlines have filed a consolidated application seeking for additional seat entitlements to Singapore.

The application was submitted by flag carrier Philippine Airlines Inc. (PAL), PAL Express, Cebu Pacific, AirAsia Zest and Tiger Airways Philippines.

PAL, which intends to use the Airbus A321 aircraft, is seeking 2,186 seats per week for flights to and from Singapore.

PAL Express is seeking 1,638 seats per week and plans to use an A320.

PAL is owned by Lucio Tan and San Miguel Corp.

Gokongwei-owned Cebu Pacific, meanwhile, is applying for 3,459 seats per week using an A330, which can carry 436 passengers.

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Image Source: Nikki Pili

AirAsia Zest is seeking 2,520 seats per week while its parent firm AirAsia is seeking 1,260 seats per week.

Both airlines intend to use the A320, which has a capacity of 180 passengers.

AirAsiaA320

Tigerair Philippines, recently acquired by Cebu Pacific, is applying for 1,260 seats per week with a capacity of 180 seats.

The Philippines and Singapore inked a new memorandum of understanding on air services early this month to allow the increase in the number of seats on flights between the Philippines and Singapore, as well as expand fifth freedom rights.

“The parties signed a new MOU on air services expanding the exchange of traffic rights between the two countries,” Civil Aeronautics Board executive director Carmelo Arcilla said.

Arcilla said the new agreement increased the number of seats to around 16,800 on the Manila-Singapore route per week for each country. The current number of seats is 13,800 per week for each country.

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Tigerair Philippines

The agreement also expanded the fifth freedom rights, by adding China for Singapore and India for the Philippines.

Fifth freedom rights refer to the airline’s right to fly passengers to a third country from a country with which an airline’s resident country has an outstanding air services agreement.

Source: http://www.abs-cbnnews.com/business/02/20/14/local-airlines-seek-more-seat-entitlements-singapore

Aviation Buzz: Philippines Failed Again US-FAA Aviation Upgrade?


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Image Source: WiredMash.com

MANILA, Philippines (2nd UPDATE) – The Philippines failed to get a much-coveted aviation rating upgrade from the US Federal Aviation Administration (FAA), which still found the country “unsafe” in a recent audit, industry sources said.

This means Philippine carriers are still banned from opening new routes or mounting additional flights to the US.

In January, an FAA team visited the country to review compliance of the Civil Aviation Authority of the Philippines (CAAP) with international safety standards, and gave an unfavorable 5-page report, CAAP insiders said.

A copy of the report obtained from the sources showed CAAP did not comply with several requirements, retaining its Category 2 status and failing to move up to the Category 1 list.

CAAP has been working on getting the upgrade for 6 years now. It was confident it was going to get the upgrade last month, with Deputy Director-General John Andrews saying he’d resign if they didn’t.

The FAA downgraded CAAP’s safety rating in 2008 upon the recommendation of the United Nations’ International Civil Aviation Organization (ICAO). At the time, ICAO found “significant concerns” over CAAP’s ability to meet international safety standards.

Under Category 2, Philippine carriers may continue existing flights to the US, but they cannot launch new routes or additional flights. Category 2 also puts them under heightened surveillance.

Following the US downgrade, the European Union also imposed a ban on Philippine carriers in 2010 due to the same safety concerns.

But last year, ICAO gave the Philippines a passing mark in its audit, while the EU allowed legacy carrier Philippine Airlines (PAL) to fly to the 28-nation bloc again.

The US status is the only remaining negative rating against the country.

The FAA is expected to announce its latest findings in Washington soon.

Findings

CAAP sources said the regulator failed to pass in 4 of “8 critical elements” that the FAA has been monitoring for “safety oversight” compliance by civil aviation authorities of ICAO-member countries.

FAA rules require that the aviation authorities hurdle all 8 elements to be upgraded to Category 1 status.

The 4 elements where there were findings against CAAP include:

  • Primary Aviation Legislation
  • Technical personnel qualification and training
  • Technical guidance, tools and provision of safety critical information
  • Licensing, certification, authorization and approval obligations

Among the findings in the FAA report were:

  • CAAP has not complied with the Article of the Chicago Convention with regard to Amendment 37 to Annex 6 part 1 issued March 28, 2013 related to approach ban provision.
  • The CAAP Airmen Examination Board personnel are not trained to prepare, administer and evaluate written theoretical examination. Records indicate that only 1 out of 9 employees has four initial trainings. There is no evidence of having correct training in almost all of Caap’s development course. None has completed the formal training policy and programs for operations and Airworthiness Inspectors does not include sufficient on the job training.
  • CAAP Airworthiness Technical Guidance does not contain complete policies, procedures and standards.

One of the sources said, “Most of the FAA findings are doable, but nobody in CAAP is actually doing the actual work to conform with regulations.”

The FAA review was conducted from January 20 to 24 by a team of 5 people, led by Gregory Michael, head of Flight Standards District Office of FAA.

The exit interview on January 24 was reportedly attended by top CAAP officials, including Andrews and head of Flight Safety Inspectorate Service Beda Badiola.

Andrews is on leave and will report back for work on February 17. Director-General William Hotchkiss, on the other hand, is attending the Singapore Air Show 2014.

Andrews declined to comment on the FAA report, but he said someone was trying to discredit the efforts of the agency.

He added officials are still confident of getting an upgrade. “We are optimistic this is positive.”

In a phone interview, CAAP chief financial officer Rodante Joya also declined to confirm whether or not the Philippines got the upgrade.

He said, “It is the FAA that will announce that in Washington. We have not received any official communication if we failed or passed the review.”

Joya said the FAA is expected to make the announcement “65 days from the last day of the audit.”

Against expectations

In November, Andrews said he was confident the country would finally win an upgrade from US authorities this year.

“If it does not happen, the buck stops at me. If this does not happen… I will no longer be here. That is my commitment,” he said then.

Andrews drew confidence from ICAO’s move in February to give the Philippines a passing mark, as well as the EU’s decision to lift its ban.

Sources said the FAA will return in March for another CAAP audit.

Philippine carriers are banking on the upgrade as they plan on expanding in the US.

Currently, only PAL is allowed to fly to the US. Budget carrier Cebu Pacific has expressed desire to operate the lucrative route.

Source: Rappler.com (http://www.rappler.com/business/industries/171-aviation-tourism/50237-ph-aviation-status-upgrade-us-faa-january)