Clark Int’l Airport Holds Key For PH to Reap Rewards of Ballooning Air Traffic

First of Three Parts (Authored by Lorenz S. Marasigan,

DOMESTIC and international air traffic volumes in the Philippines have ballooned over the past decade averaging 10% annually since 2005. While seemingly a positive development, this is still seen as both a boon and a bane to the rising tiger of Asia.

The increased volume means an upward tick in revenues from tourism, one of the growth drivers of the country’s local output. But with airport facilities remaining as they were 10 years before, the Philippines will continue to carry that stigma of having one of the worst airports in the world, no thanks to runway and terminal congestion at the Ninoy Aquino International Airport (NAIA).

According to the International Air Transport Association (IATA), such a
situation places the Philippines at the losing end, with potential revenues from traffic lost to other hubs in the region.

“Recent trends suggest that capacity constraints are resulting in traffic being lost to other regional hubs, rather than being recaptured by Clark International Airport, to the detriment of the economy of the Philippines,” it said.

The Japan International Cooperation Agency (JICA) expects the NAIA to handle some 37.78 million passengers this year, way beyond its 30-million annual passenger capacity and a few notches up from its maximum capacity of 35 million passengers per year.

With this on the table, the government has moved to address the looming problem of accommodating more passengers and airplanes in Manila. One of these initiatives involve the construction of an airport that will replace NAIA down the line.

This airport, however, will only be built by 2025—at least according to estimates given by JICA, if the current government opts to have the project rolling during its term.

The loophole to this equation, according to Avelino L. Zapanta, an aviation expert, is that Manila will continue to see its numbers rising, averaging at a tenth every year, and yet, capacity will remain the same.

Such a scenario will lead to delayed and canceled flights, longer queues and even warmer terminals.

Instead of waiting for this to happen, the government, he said, should consider the dual-airport strategy of developing Clark International Airport and NAIA.

“I have advocated the use of Clark as international or domestic gateway and the Naia for purely domestic gateway as means to decongest NAIA overnight. But the transportation department is not listening,” Zapanta said.

The Department of Transportation and Communications (DOTC), he said, is too engrossed with the idea of building an airport in Sangley Point, Cavite, a prospect that will only materialize in a decade, at the fastest.

“It is enamored with developing Sangley as a new international airport. But our problem is here now and its solution is for long term —2025 in their view; much longer in mine. Clark can handle all international operation in a five-year phased transfer of foreign airlines and local airlines doing international operations with some accompanying developments,” he said.

Highly Underutilized

Clark International Airport Corp. President Emigdio P. Tanjuatco III said the airport is currently underutilized, with about 870,000 passengers accommodated in 2014, way below its rated capacity of 4 million passengers per year.

“At any given hour, we are too underutilized. Slotting is not a problem in Clark, we have a lot of slots,” he said. “For example, while the 3 p.m. time slot, which is one of the most sought-after slot, for  the NAIA is already full, Clark can still accommodate operations at that hour.”

Currently, there are only seven airlines operating out of Clark. Of the figure, only one, Cebu Pacific, is a local carrier serving a few international and local flights.

“Compared to the NAIA, which averages at around 42 flight movements per hour, we can easily distribute slots to airlines, because we still have a lot of capacity,” Tanjuatco said.

The airport in the north, formerly known as Diosdado Macapagal International Airport, has two 3,200-meter parallel runways equipped with various navigational aids and lighting facilities, rated the highest for precision approach by the US Federal Aviation Authority. It has a single terminal with an annual capacity of 4 million passengers per year, but plans to construct a P7.2-billion terminal is now in the works.

Clark was envisioned to be the future primary international gateway of the Philippines once  the NAIA reaches its full capacity and when the main airport can no longer expand. It was envisioned to be an aerotropolis —an aviation city—with businesses and industries moving in to the former US airfield. Former President Fidel V. Ramos ordered the development of Clark to be a premier gateway to the Philippines, with capacity expansions envisioned to reach 14 million passengers by 1998.

The Bases Conversion and Development Authority crafted a master plan for the development of the airport, but unfortunately, the plan remained on paper and never materialized.

Despite this setback, Clark’s facilities, Tanjuatco said, can still accommodate the projected 6 million passengers that Clark would have accommodated, if only there were more commercial operations out of the airport.

“According to a market study that we conducted, there are about 6 million potential passengers within the area last year. It would have been more practical for them if they flew out of Clark, but there were limited flights,” he said.

These potential customers, Tanjuatco said, reside in Central and Northern Luzon. Clark, he said, can serve the two regions, part of Southern Tagalog and the National Capital Region.

“There is a market for Clark. Central and Northern Luzon has a population of about 23 million. Calabarzon and the National Capital Region, likewise, have almost the same. We can serve them. The catchment area of Clark last year is 6 million passengers, but 5 million flew out of NAIA. The rest flew out of Clark. If only there were flights out of Clark, then we could have served the 5 million passengers from here,” he explained.

Zapanta added that such a catchment area is at least 75 percent of Metro Manila, hence, Clark is really a viable option. “The market is North and Central Luzon—developing as tourism areas already.  The combined volume of these catchment areas is at least 75 percent of Metro Manila, also North Metro Manila, which has faster access to Clark compared to the Naia,” he said.

But despite this, the government and local carriers are still much focused on the capital airport, as it is nearer to the central business districts of Makati City and Bonifacio Global City when compared to Clark.

Hence, the problem, according to a 2011 JICA report on Philippine airports, lies on the lack of proper planning and asset utilization.

“There is strong growth in demand for greater capital region air travel. Despite capacity constraints at NAIA and available capacity at Clark, airlines and passengers continue to focus on NAIA,” it said.

Chicken and Egg

Improving Clark’s margins is a chicken-and-egg situation, Tanjuatco lamented.

“Increasing flights out of Clark is really an airline decision. Airlines will always look for the lucrative destinations to add to their networks. The disadvantage of Clark versus Boracay and Davao is that these latter two are already destinations in themselves. Clark is not much of a destination, that’s why we are pushing for tourism in the north to also be heightened,” he said.

The president of the airport also acknowledged the need of airlines to see returns from millions of pesos in investments in a route.

“Expanding the operations in Clark is a chicken-and-egg situation. At one hand, you have passengers that are looking for flights. On the other are airlines looking for passengers,” he said. “But we have enough passengers to have a lucrative business for the airlines—that’s what they have to see.”

Local airlines, however, are not too convinced with this argument.

Source: Lorenz S. Marasigan,

Airlines Push Use Of E-Boarding Pass

Airline companies called on passengers to avail of electronic boarding pass they can capture on their mobile phones, tablets or laptops, which was being implemented to ease congestion in the airports and make air travel easier, airline officials said on Monday.

Cebu Pacific, Air Asia and Philippine Air Lines said the use of the mobile boarding pass was mandated by the International Air Transport Association to eliminate paper documents and move to paperless environment by 2016.

“We are offering this service to ease congestion and make traveling a lot easier and more convenient especially with the start of the summer season when most of us will be traveling,” an Air Asia official said.

According to SITA, the airline Information Technology specialist, 53 percent of airlines have implemented the use of mobile boarding pass via apps. The figure is expected to rise to 91 percent by 2017.

Philippine Airlines and the Manila International Airport piloted the paperless procedure last March 16. But airport officials also accepted paper travel documents.

Candice Iyog, Cebu Pacific (CEB) Vice President, Marketing Distribution, said the airline has started generating mobile boarding passes since December last year.

“CEB’s mobile application allows our passengers to book flights and do mobile check-in. The CEB mobile app generates boarding passes that can be scanned at airports,” Iyog said.

She said passengers could get more details about CEB’s mobile app at htt://

Source: Rosalie C. Periabras, The Manila Times

Analysis: ASEAN Open Skies On Track

PETALING JAYA: Three aviation tragedies involving carriers from Asean within a space of nine months will not stop the implementation of the Asean open skies policy that will kick off from Jan 1.

The policy, however, is expected to pay more attention to having higher standards of safety and other regulatory approvals to operate flights, among others, when it is fully implemented by the end of 2015.

Although the road to full open skies is not completely clear of obstacles, some Asean airlines particularly low-cost carriers (LCCs) are already positioning themselves for the Asean open skies.

Analysts said the higher safety standards were not entirely due to the two catastrophes involving aircraft from Malaysia and Indonesia. Asean members, they said, had always worked towards their respective safety security compliance for the industry.

“It is not something they hastily prepared in the wake of the airline tragedies. Safety has always been paramount in the aviation industry. No airlines will compromise on safety issue. It (safety) will always be their top priority,” an aviation analyst said.

Industry players said the Asean open skies not only provide member countries with air service liberalisation, but also include aviation safety, aviation security, air traffic management, civil aviation technology, aviation environment protection and air transport regulatory framework.

This year has been the worst for the aviation sector in the region, where for the past few years airlines were hit by high operating costs largely due to fuel prices. But since June this year, the fuel cost has come down but a spate of airline tragedies has cast a shadow over the airline companies.

On March 8, Malaysia Airlines (MAS) MH370 went missing after leaving Kuala Lumpur en route to Beijing, while in July, another MAS jet was shot down when flying over a rebel-controlled area in Ukraine.

The latest air tragedy happened on Sunday when AirAsia Indonesia flight QZ8501 went missing after leaving Surabaya for Singapore.

Analysts and industry officials said airlines had always not compromised on safety issues and that the MH370 tragedy was a rarity.

International Air Transport Association (IATA) CEO Tony Tyler had said right from the beginning there was an understanding among governments and industry players that “safety was not a competitive issue”. He said there has always been great cooperation among all the industry’s stakeholders in efforts to make flying ever safer.

Tyler said IATA was working with its partners towards some recommendations on how to better track aircraft. There is some promising technology that will become available in the near future.

Meanwhile, industry players and analysts are excited with the impending policy which is expected to take place in 2015 as it will be a boon to the Asean carriers.

Analysts said the open skies policy would likely see greater growth and development as airlines in the region were spurred to greater competition.

“With the Asean open skies policy being implemented next year, there would be higher air travel demand in the region, as well as an increase in passenger traffic and movement of goods. This will add a new dimension of growth for the country,” a bank-backed analyst said, adding that Malaysia was one of the major beneficiaries of the policy.

The Asean open skies policy, to be introduced next year as part of the Asean Economic Community, is expected to transform the aviation industry by allowing for more liberalisation between the regional aviation markets, thus encouraging greater connectivity, higher traffic growth and service quality, while lowering ticket prices.

In essence, all of the 10 Asean member countries will open up their international airports to each other, with no regulatory limit in terms of frequency or capacity.

AirAsia group CEO Tan Sri Tony Fernandes told StarBiz in an interview last week (before the QZ8501 incident) that the group was very excited on Asean as a whole and it had been very progressive in opening up its skies. He believed the policy would further boost Asean tourism market.

“We believe in economic union of Asean. AirAsia has been moving Asean people around successfully. The open skies policy will enable secondary cities to reopen, improved connectivity for SME and tourism,” he told StarBiz.

He said the policy would be the first step in terms of Asean common ownership. He also hoped that it would be truly open skies.

“We need open skies — true open skies — and common ownership. As an Asean company, why can’t I own 100% of another airline in Asean? And why can’t another airline own 100% of a Malaysian carrier?” Tony said.

AirAsia has managed to build an Asean tourism market way before the implementation of the policy. The carrier has moved ahead to secure the Indonesian market, accounting for a significant portion of the region’s total population.

Maybank Investment Bank analyst Mohshin Aziz said there was much to cheer upon the launch of the Asean open skies in 2015.

He said upon closer scrutiny, many of the advertised benefits were just a mirage. For example, open skies exist for capital cities, but there is a cap on slots so it amounts to no net benefit.

“Furthermore, the granting of fifth-freedom rights remains arbitrary and dependent on the host country. We wish the tentacles of bureaucracy could be crimped and that things move in a more cohesive manner, much like in the European Union (EU).

A fifth freedom enables an airline to fly to two countries with a flight that originates or ends in its home country. For instance an aircraft can take off from Kuala Lumpur, pick passengers in Bangkok before stopping in Hanoi.

“However, to be fair, the EU open skies took 52 years to complete, whereas Asean open skies was mooted 18 years ago. Hopefully, there will be more deregulations and the region will be more single market-centric in the near future,” he said.

Some players argued that true liberalisation would ensure seventh freedom rights whereby airliners get the right to transport passengers between two foreign countries without offering flights to one’s home country. For instance an airline from Kuala Lumpur can operate between Jakarta and Singapore without having to return to the home base.

It has been reported that the Asean open skies has been ratified by all Asean countries except for the Philippines. Indonesia had ratified 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.

So, who will benefits and who will rule Asean skies?

In a report, UOB Kay Hian said AirAsia and airport operators such as Malaysia Airports Holdings Bhd (MAHB) would benefit from Indonesia’s ratification of the 2009 Asean open skies.

The research house noted that intra-Asean LCC penetration which was already at 59% would rise further if MAAS was fully ratified.

“The two dominant LCCs in Asean – Lion Air and AirAsia – will be the main beneficiaries. AirAsia will benefit via higher intra-Asean travel, utilisation of its extensive order book, and higher lease income.

“Thai AirAsia, which is Thailand’s largest LCC, will also benefit from greater intra-Asean travel and can serve as an LCC hub to China,” the research house said.

It said airport operators MAHB and Airports of Thailand would also be beneficiaries in the long term.

“Bangkok’s Suvarnabhumi airport is operating at 90% capacity and a new terminal will only be completed in 2017. However, LCC airport Don Maung will see greater pax throughput.

“The primary beneficiary, however, will be KLIA2 as nine LCCs are serving KLIA2, five of which are from the AirAsia group. MAHB will be able to benefit from higher aeronautical and non-aeronautical revenue,” it said.

Source: Leong Hung Yee, The Star Online

IATA Says Aviation Safety Remains High

Safety in global aviation remains high, the International Air Transport Association said Tuesday, as it seeks to improve in-flight tracking after the disappearance of a Malaysian passenger jet in March.

There were 0.34 accidents per million flights in the first four months of 2014 compared with 0.32 over the preceding five years, IATA said at its annual general meeting in Doha, Qatar.

“The preliminary rate for the industry as a whole (including non-IATA airlines) is performing strongly,” with 0.29 accidents per million flights in January-April against 0.48 in the previous five years, it said.

IATA groups 242 airlines representing 84 percent of global air traffic.

Its statement noted that the industry recorded three accidents between January and April, including the mysterious disappearance of Malaysia Airlines Flight MH370.

“Aviation stakeholders are united in their desire to ensure that we never face another situation where an aircraft simply disappears,” said Kevin Hiatt, senior vice president at IATA’s Safety and Flight Operations department.

MH370 disappeared on March 8 en route from Kuala Lumpur to Beijing with 239 people aboard. An extensive search in the Indian Ocean has been unable to locate the plane.

An IATA taskforce on in-flight tracking, formed by the UN’s aviation agency, the International Civil Aviation Organisation (ICAO), is to present its findings in September.

“While states work through ICAO to develop and implement performance-based global standards, the industry is committed to moving forward with recommendations that airlines can implement now,” said Hiatt.

He acknowledged, however, that airlines alone can decide if they want to implement such standards.

Meanwhile the company specialising in air transport communications and information technology SITA announced in Doha plans to introduce a new aircraft tracking device.

“The solution, which is currently being evaluated by several airlines for testing, will utilise technology that is already installed in the aircraft to provide advanced tracking capabilities,” a statement said.

It said the system known as “SITA AIRCOM Server Flight Tracker solution” will alert airline flight dispatchers “to unexpected aircraft movements” it said.

According to its designers, “the solution does not call for extensive additional cost or investment by the airlines” as it relies on a system that is already installed in many aircraft.