2016: Make or Break Year for AirAsia Philippines


The Philippine unit of Malaysian budget carrier Air Asia Bhd is seeing its outlook improve as it focuses on more international routes via secondary hubs and completes the consolidation of its brands, aviation consultancy CAPA-Center for Aviation said in a report.

Air Asia’s Philippine units represent the third major airline player in the Philippines, where they mainly compete with Philippine Airlines and Cebu Pacific Air.

CAPA said in its report that 2016 was a “critical year” for the Air Asia Group to prove that it can be a viable carrier in the Philippine market.

“If it meets its 2016 goal of becoming profitable, aspirations for an initial public offering within two years will become realistic, providing a foundation for consistent growth,” CAPA said.

“If the newly restructured [Philippines Air Asia] remains loss-making, its long-term survivability —and the AirAsia Group’s need for a Philippine affiliate—will again be questioned,” it added.

The group operates in the country mainly through its brands Philippine Air Asia and Air Asia Zest.

CAPA, citing its CEO Joy Caneba, said the combination of both units under a single brand would soon be rolled out.

“Turnaround efforts are banking on cost reductions driven by the transition to a single airline and higher yields that will be generated by a more international focused network,” CAPA said, adding that the business had been “highly unprofitable” since 2012.

Nevertheless, CAPA said the domestic business had been seeing improved load factor.

Moreover, it said Philippine Air Asia would continue to expand its fleet in 2016, reiterating a plan outlined by AirAsia founder Tony Fernandes.

CAPA said Air Asia Philippines was in the process of selling older planes to cut its fleet of 15 aircraft to 12 Airbus A320s.

“Strategically, PAA needs to resume expansion as it cannot afford to be stuck at its current modest capacity level. Cutting capacity and the fleet over the last year was necessary but is seen as a temporary measure to position the airline for future growth,” CAPA said.

It likewise supported the unit’s plan to develop more secondary hubs with international routes such as Davao, Iloilo, and Puerto Princesa.

“Over the last couple of years Air Asia has discovered that battling against PAL and much larger [low cost carrier] Cebu Pacific in the domestic market is generally a losing proposition,” CAPA said. “The focus on secondary international routes is logical as PAA needs to differentiate itself from its larger competitors.”

Source: Miguel R. Camus, Philippine Daily Inquirer

Cebu Pacific Receives 32nd Airbus A320

NEW AIRCRAFT. This is the 3rd of 4 Airbus A320 aircraft that the airline is set to receive this year, Cebu Pacific announces on Monday, September 28, 2015. Photo from Ajig Ibasco / Cebu Pacific
NEW AIRCRAFT. This is the 3rd of 4 Airbus A320 aircraft that the airline is set to receive this year, Cebu Pacific announces on Monday, September 28, 2015. Photo from Ajig Ibasco / Cebu Pacific

Next stop: Honolulu

While Cebu Pacific is in a middle of a $4 billion refleeting program, the country’s largest budget airline also eyes new destinations, and considers Honolulu, Hawaii for its next route early 2016.

Speaking on the sidelines of the 2015 Philippine Aviation Summit on September 25, Cebu Pacific CEO Lance Gokongwei said flying to Honolulu is a good move considering the large number of Filipinos living there.

“Using Manila as a hub, probably a lot of North Asian countries can connect to Manila with direct flights from Honolulu,” he said.

Apart from Honolulu, Cebu Pacific is also allowed to fly to Guam, Saipan, San Francisco, and Los Angeles, following the country’s upgraded aviation rating to Category 1 by the US Federal Aviation Authority in April 2014.

Gokongwei added that Cebu Pacific might also increase its flights to Australia. Currently, the staunch rival of legacy carrier Philippine Airlines is already flying to Sydney.

In April 2015, the Center for Aviation noted that Honolulu, Hawaii and Melbourne, Australia would be Cebu Pacific’s 6th and 7th long-haul destination, joining 4 in the Middle East and Sydney.

Targeting 18 million for passenger volume this year, Cebu Pacific is also solidifying its place in the region, competing with the likes of Malaysia’s AirAsia Berhad.

On September 21, the airline announced that it bagged the approval of the Singapore government to enter into a strategic alliance with Tigerair, a unit of Singapore Airlines Ltd.

“Cebu Pacific’s passengers, particularly from the Philippines, will be able to enjoy seamless connections onto Tigerair’s established network in Southeast Asia and India. Tigerair’s customers, on the other hand, will be able to select from Cebu Pacific’s extensive network in the Philippines and North Asia,” the statement read.

Source: Lynda C. Corpuz / Rappler.com

Philippine Airlines Sights On Polar Route

FLAG carrier Philippine Airlines (PAL) is studying a so-called Polar Route Operation that it can use to travel non-stop between Manila and New York, its top official said.

PAL president Jaime Bautista said in an interview Thursday that the carrier is seeking the necessary regulatory approvals for the route, which means the aircraft will fly over the polar region to cut on flight time.

He said the new route could be launched by 2016 depending on passenger load.

“We can fly nonstop using the Boeing 777s to New York,” Bautista said. He added PAL is now in discussions with the Civil Aviation Authority of the Philippines and the Federal Aviation Administration for the necessary permits.

“We need approvals to fly over the North Pole,” Bautista said.

PAL is already set to shift its Manila to New York service, which makes a stopover in Vancouver, Canada, to its Boeing 777-300 ER starting Oct. 27, Bautista said. Flights between Manila and New York are currently being serviced by PAL’s ageing fleet of Boeing A340s.

Bautista said there were no new routes planned in the US, although PAL may increase frequencies to existing cities where it operates. Apart from New York, PAL also operates in the US via Honolulu, Los Angeles and San Francisco.

Source: Miguel R. Camus, http://business.inquirer.net/

CAAP Allows Air Pact Violations If They Are Not Abused

The Civil Aeronautics Administration of the Philippines (CAAP) appears to be deaf and blind to the objections of members of the House of Representatives in allowing more landing rights in the Ninoy Aquino International Airport (NAIA).

In their letter to Carmelo Arcilla, executive director of the Civil Aeronautics Board, the lawmakers declared “it has been revealed in various public hearings that NAIA has reached its full capacity and any additional accommodation during its peak operating period will only further narrow the window for aircraft movements and thus, will become a safety issue.”

The bigger question of the airline industry in the Philippines is non-reciprocity in the bilateral agreements with airlines of other countries.  In past years, civil authorities have been giving additional seat capacities to other airlines landing in NAIA. The CAAP refuses to demand reciprocal rights.

Airlines in the Philippines do not get the reciprocity in terms of additional passenger seats and more landing rights. Philippine Airlines (PAL), and lately Cebu Pacific, have been on the receiving ends of bilateral agreements.

Civil authorities in the Philippines allow competitors to land in Manila and pick up passengers for other destinations. PAL and Cebu Pacific, on the other hand, operate point to point.

Airlines in the Middle East fly to Manila and pick up passengers for other destinations, mostly the United States. These passengers would be forced to take PAL if its competitors are not allowed to fly to a third destination instead of flying back home.

PAL told Business Insight “the UAE (United Arab Emirates) gives Emirates Airlines and Etihad Airways greater and more enormous advantages in scooping up more ‘sixth freedom’ passenger (air) traffic.”

Since the two Arab airlines fly to Manila and pick up passengers for another destination, they are not in the business of flying from home to Manila and back to home. PAL claimed they make more money flying passengers from Europe to Manila or from Saudi Arabia, a separate independent Middle East country.

PAL claims these operations are not allowed under the agreement but is tolerated (by civil authorities) as long as Emirates Airlines and Etihad Airways do not ‘abuse’ the privilege.

The proof of abuse is precisely “violating the agreement” by flying passengers picked up in Manila while PAL flies back home from UAE.  PAL is limited to point-to-point operation as specified in the agreement.

Civil authorities in the Philippines do not consider flying passengers from Manila to Europe and elsewhere a violation of the agreement. Or they do not demand the same rights for PAL.

Government argues PAL should have more aircraft to be entitled to reciprocity. PAL shoots back to claim it cannot buy more airplanes if it is denied revenues given to passengers of its competitors.

PAL has ordered 70 new long-haul airplanes. Thirty of them have been delivered. Five will come every year.

In spite of being denied passengers by CAAP, PAL made consolidated profits of $20.376 million in 2014.  It flew more than 50 million passengers in its local and foreign routes.

Source: Amado P. Macasaet, http://www.malaya.com.ph/

13 Airlines with the Best Looking Flight Crew (Migme, http://asia361.com/)

On 14 September 2015, Air India announced that they will ground 125 cabin crew if they fail to lose weight and reach the required Body Mass Index (BMI) range. According to TIME magazine, the airline claims that this is due to safety concerns, as they want to ensure the crew are fit enough to handle emergency situations. Male crew have to have a BMI of 18-25, while females are required to meet the range of 18-22.

This follows the 2014 guidelines from the Indian Directorate General of Civil Aviation which states that overweight cabin crew have three months to lose weight or be declared unfit for duties for six months.

A user @susmitsenn on migme, a social entertainment platform, was happy that the “fat aunties will finally be out and make way for sexier air hostesses”, however he was shocked they would be sacked for being ‘fat’.

While Air India shapes up to meet safety standards, migme has put together a list of airlines with flight crew that are very fit— you know what we mean.

1. Emirates Airlines (Dubai, UAE)

Image Source: Emirates

Even though our list is not in order of merit, Emirates deserves to be mentioned first. They received unanimous votes in our casual poll in the migme office.

2. Singapore Airlines (Singapore)

Image Source: Singapore Airlines

Their tagline “Singapore Girl, you’re a great way to fly”, while being somewhat sexist, is not entirely wrong as the airline prides itself on high service standards.

3. Etihad Airways (Abu Dhabi, UAE)

Image Source: Etihad Airways

Excuse me, I need to get an oxygen mask, because you take my breath away.

4. Virgin Atlantic (England, UK)

Image Source: Virgin Atlantic

You don’t need Vivienne Westwood to design your uniforms when you are looking like that.

5. Qatar Airways (Qatar)

Image Source: Qatar Airways

If there’s anything we’ve learnt from this list, it’s that the Middle Eastern airlines have a bunch of pretty good-looking crew.

6. China Eastern Airlines (China)

Image Source: China Eastern Airlines

If you didn’t know the Chinese word for elegance, now you do.

7. Lufthansa (Germany)

Image Source: Lufthansa

Hi Marc, we want a selfie too! Yes, that is his real name. Don’t ask us how we know. *shifty*

8. EVA Air (Taiwan)

Image Source: asia361.com, Kat Goh

As if the Hello Kitty Jet isn’t cute enough, the crew members are all pretty darn cute too.

9. Safi Airways (Dubai-based, Afghan-owned)

Image Source: Safi Airways

Forgive me if I keep asking for assistance on the plane. I don’t really need water, I just want to look at your face.

10. Asiana Airlines (South Korea)

Image Source: Asiana Airlines

Does an electronic boarding pass mean we get to see you sooner? Checking in online right now.

11. All Nippon Airways (Japan)

Image Source: ANA

Notice me, senpai!

12. Garuda Indonesia (Indonesia)

Image Source: Garuda Indonesia

You’ve learnt a Chinese word already, so now we will teach you the Bahasa Indonesia word to describe the crew – ‘cantik‘. That means beautiful.

13. Cebu Pacific Air (The Philippines)

Image Source: Cebu Pacific

Bright uniforms and an even brighter smile? You set our pre-flight jitters at ease.

Source: Migme, asia361.com

Fresh Airport Pitch To Next Administration

MANILA — San Miguel plans to offer a more modest airport project to the next Philippine administration after an ambitious proposal for a $10-billion aviation hub for the capital failed to impress the current government.

Ramon Ang, the diversified conglomerate’s president and chief operating officer, said his new proposal will cover construction of a 2-billion-peso ($43 million) “budget terminal” and a 5-billion-peso runway near the existing Ninoy Aquino International Airport (NAIA) in southern Metro Manila.

Access and additional land near the Manila airport complex will cost around 50 billion pesos, Ang said.

The existing airport has two runways with capacity for 50 take-offs and landings an hour, and three main terminals that handle 30 million passenger movements annually. According to Ang, the revised terminal and runway proposal will double NAIA’s capacity.

Speaking to reporters on Monday, Ang described the revised project as “an unsolicited proposal” for the next administration, but did not go into the business model.

 Ang said Manila would eventually need a larger, more modern airport. The present facility was rated the region’s worst in one online survey. It handled 34 million passengers last year, well beyond its capacity, and the existing runways are unable to handle more aircraft movements, resulting in flight delays.

Last year, San Miguel pitched the unsolicited $10-billion airport project to President Benigno Aquino’s government, which generally prefers solicited proposals. It showed little interest.

 Aquino will end a constitutionally mandated single term of six years in 2016, and his successor may review the situation.

The original 800-hectare airport project had three terminals — one main hub for full-service carriers and two terminals to serve the growing number of budget airlines. It required reclamation of a portion of Manila Bay for four runways and 164 gates to provide capacity for 100 million passenger movements annually, according to San Miguel documents.

San Miguel is currently undertaking an 8-billion-peso expansion in the central Philippines of Caticlan Airport, the gateway to Boracay Island which receives over a million tourists annually.

Source: CLIFF VENZON, Nikkei staff writer

Cebu Pacific, Tigerair Singapore Strengthen Partnership

MANILA – Cebu Pacific and Tigerair have received approval from the Competition Commission of Singapore (CCS) for the strategic alliance agreement that aims to boost ties between the Philippine and Singapore markets.


In a joint statement, the airlines said the approval creates greater potential for closer coordination on sales and schedules on relevant routes, which will offer customers more flight options at good value.

“Cebu Pacific and Tigerair have an existing interline cooperation as part of the alliance and the CCS approval allows both airlines to build upon the current arrangements,” the airlines said.

Under the alliance, Cebu Pacific’s passengers, particularly from the Philippines, will be able to access connections onto Tigerair’s established network in South East Asia and India.

Tigerair’s customers, on the other hand, will be able to select from Cebu Pacific’s extensive network in the Philippines and North Asia.

Image Source: James Morgan

“Cebu Pacific’s strategic alliance with Tigerair allows both carriers to leverage on each other’s strengths and complementary networks,” Cebu Pacific president and chief execuvite Lance Gokongwei said.

In 2014, the Gokongwei-owned Cebu Air acquired the local unit of Tigerair for an estimated P665 million.

Source: http://www.abs-cbnnews.com/

Asean Open Skies Will Go On Sans Manila

NAIA Terminal 1
NAIA Terminal 1

IT’S embarrassing.

This was the reaction of aviation expert Avelino Zapanta to the Philippines’s continued protection of Manila from foreign carriers, despite the rest of the member-nations of the Association of Southeast Asian Nations (Asean) agreeing to open up their capital cities.

“Nakakahiya nga, but it won’t stop the Asam [Asean-Single Aviation Market],” he opined. ASAM takes full effect in December 2015, as Asean becomes one economic community.

Zapanta, author of 100 Years of Philippine Aviation 1909-2009, the definite reference on airline management in the Philippines, also said the Asean open-skies policy will spur local airlines to offer more intra-Asean routes.

“I think some Philippine carriers will take advantage of Asam, like Cebu Pacific.  It has the resources and it is aggressive.  It has ordered more ATR72s, ideal for the noncapital cities of the other Asean countries, e.g., Zamboanga to Sandakan and Puerto Princesa to Kota Kinabalu, among many others.  I think, PAL Express will do so, too.  But the most aggressive will be Air Asia Zest, since Asam is right down the group’s alley.”

The Philippines continues to stall on the ratification of Protocols 5 and 6 of the 2009 Multilateral Agreement on Air Services (MAAS) that would give Asean airlines unlimited third, fourth and fifth freedom rights to operate between capital cities.

Zapanta, who is also president of the Southeast Asian Airlines International, a charter service, said the Civil Aeronautics Board “has proposed the ratification of Protocols 5 and 6, but it has not been acted upon by the President [Mr. Aquino].”

For its part, pioneering flag carrier Philippine Airlines (PAL) supports the Aquino administration’s protection of Naia in Manila, the main gateway of tourists to the Philippines, due to its congested runways and terminals.


But it added that it supports ASAM, as it opens up secondary airports as other tourism gateways to the Philippines.

In an e-mail, airline President and COO Jaime J. Bautista said: “PAL has supported Asean open skies as a way of stimulating the opening of direct airline routes to the Philippines’s tourist gateways. With PAL’s support, the Philippines ratified Asean open skies several years ago for services to all Philippine airports, except Naia; and, thus, any Asean airline can operate nonstop from any airport in the Asean region to Cebu, Clark, Davao, Laoag, Laguindingan, Bohol, Iloilo, Puerto Princesa and any other secondary airports in the country.”

He added: “The remaining obstacle is Manila, because the runways, terminals and facilities at Naia are currently overstressed in handling existing flights, much less any significant expansion of flights under any kind of open-skies arrangement.  The government has rightfully held back from including Naia in the ratified Asean open- skies agreements, and, indeed, there is much work to be done to expand Naia or develop a new Manila airport before the Philippines could consider meaningful open skies.  In the meantime, Asean airlines can serve the capital by flying to Clark.” Aileen Clemente, president of the Asean Tourism Association (Aseanta), earlier said the issue of having no more slots in Manila for foreign carriers and the principle of open skies should be separate from each other. She pointed out that “Indonesia already signed [the protocols], even if the Jakarta airport currently doesn’t have slots to provide [foreign carriers],” making the Philippines the last holdout to the region-wide agreement.

Aseanta is composed of public and private tourism-sector organizations from the Asean, which help implement the Asean strategic tourism plan—a road map to ensure that the region remains a successful tourism destination.

Zapanta, for his part, believes the rest of Asean will not press the Philippines to fully open its main gateway to foreign carriers, even if it will be the remaining country, which will continue to do so. “The other members of Asean will respect the limitation we imposed in the non-ratification of Protocols 5 and 6.  They have the option to reciprocate the restriction, i.e., not giving the Philippines unlimited third, fourth and fifth [flying rights] in their capital cities, and keep within bilaterally agreed level of such traffic rights.”

Third and fourth freedom rights allow carriers to fly from their home country to another foreign country, sans government approval.

Fifth freedom rights allows any carrier to fly between two foreign countries during flights originating or ending in said airline’s home country.

Meanwhile, PAL said it was willing to compete under the ASAM but urged other Asean member- nations to privatize their flag carriers to make competition more equitable in the region.

“PAL is always able and willing to  compete with airlines in Asean and all  over the world,” said Bautista.  “In Asean  we’ve advocated a policy for each member-state to take the bold leap to privatize their flag carriers, so that their airlines can progress from state ownership and dependence to become normal business enterprises.  That would make it more fair or equitable, as the Philippines is the only Asean member-state to have made those bold moves more than two decades ago.”

The 10 members of the Asean are Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Source: Ma. Stella F. Arnaldo, http://www.businessmirror.com.ph/

Philippine Airlines Starts Daily Manila-Sydney Flights in October

MANILA, Philippines – Flag carrier Philippine Airlines (PAL) is boosting services between Sydney and Manila by offering daily flights beginning October.

In a statement, PAL said the daily flights will be available starting Oct. 25.

Beginning Oct. 25, flights that depart Manila at 10:05 p.m. via PAL’s PR 211 every Tuesday, Thursday, Friday and Saturday, will arrive Sydney at 9:30 a.m. (Australia time) the following day.

The PR 213 flight which will leave Manila at 11 a.m. every Monday, Wednesday and Sunday, will get to Sydney at 10:25 p.m. (Australia time).

Flights from Sydney which will depart at 6:10 a.m. (Australia time) every Monday, Tuesday and Thursday via PR 214 will arrive in Manila at 11:25 a.m.

During the rest of the week — Wednesday, Friday, Saturday and Sunday, flights from Sydney will leave at 11:15 a.m. (Australia time) via PR 212 and arrive in Manila at 4:30 p.m.

At present, PAL offers flights to Sydney five times a week.

“A daily frequency with a choice of departure and arrival times provides our passengers the flexibility to seamlessly connect to many cities on PAL’s domestic and international network,” PAL president and chief operating officer Jaime Bautista said.

“Upon arrival in Manila, Australian business and leisure travelers can enjoy a Manila stopover for several days or make a same-day connection on PAL flights to the many travel spots within the Philippine archipelago,” he said.

The Sydney route which was first offered on Oct. 6, 1965, is one of PAL’s longest-running service operations.

Source: Louella D. Desiderio, The Philippine Star

Philippine Airlines Nears 787/A350 Choice

MANILA, Philippines—Philippine Airlines (PAL) is on track to make a decision by the end of 2015 regarding whether it will order Boeing 787s orAirbus A350s to replace itsA340 fleet.

The airline has received proposals from both manufacturers and is still conducting its evaluation, PAL President Jaime Bautista told Aviation Daily. The management team hopes to make a recommendation to the board within the next few months, and then the board will make the final decision.

PAL may order eight aircraft, Bautista said. These would replace the six A340-300s in the fleet and also provide for some fleet growth. The new aircraft would provide the carrier with the opportunity to fly new nonstop sectors, such as Manila-New York.

The versions being considered by the carrier are the Boeing 787-9 and the Airbus A350-900. Whichever aircraft type is selected will be configured with less than 300 seats, including economy, premium economy and business class. The A340s currently have a 254-seat, two-class layout.

PAL is due to receive two more leased Boeing 777-300ERs next year, in October and December. However, the carrier will not phase out any of its A340s at that time, according to Bautista. Retirement of those aircraft will probably wait until the 787s or A350s begin arriving.

The additional -300ERs are likely to be the last two of this type received by PAL, as the airline will “concentrate on newer technology” in the future, Bautista said. He noted that 787s and A350s have both greater fuel-efficiency and lower maintenance costs.

PAL is also planning a cabin refurbishment for its Airbus A330-300s, which will give this fleet a consistent premium product. Of the airline’s 15 A330s, eight are configured with 368 seats in three classes, and the other seven have 414 seats in just economy and premium economy. The refurbished aircraft will have fewer seats than both current configurations.

New seats and inflight entertainment systems have been ordered, but will take two years to deliver. They will be installed on the A330s during 2017, Bautista said. Aircraft in all-economy configuration will be the first to get the new product.

These changes are the result of a fleet review undertaken after a change in management at the airline last year. One of the carrier’s goals is to increase the focus on full-service and premium products in all of its international markets, marking a shift from the previous management team’s strategy of having all-economy flights on some routes.

In the narrow body fleet, PAL has deferred many of its Airbus A321 orders and converted them to A321neos. It was supposed to take delivery of 10 A321s this year, and the same number in 2016, but has deferred five of these aircraft in each year. The A321s are partly for replacement and partly for growth, since two A320s will be phased out this year, and three returned to lessors next year.

PAL now has 30 A321neos on order, including the deferred aircraft. They are due to begin arriving in 2017. Again, these will be mainly for growth, although some will replace lease-returns.

Bautista confirms that PAL is looking to convert some of the A321neo orders to the long range (LR) version. The airline has not yet decided how many of these it would like, but the LRs could comprise about one-third of the A321neo orders, he said.

The extended range of the LRs will open up new options for the narrowbody fleet, Bautista added. For example, some routes, such as New Delhi, do not have enough damage for an A330 but would be within range of the LRs. And some existing A330 services could be replaced with two A321neoLR flights, giving customers more options.

Source: Adrian Schofield | Aviation Daily