Cebu Pacific, PAL Oppose Anew UAE Air Talks


EMIRATES NOT SUBSIDIZED. Image from Emirates website

MANILA, Philippines – Philippine Airlines Incorporated (PAL) and Cebu Pacific Air are asking once again the Philippine aviation regulator to deny the requested additional United Arab Emirates (UAE) flight capacity, saying this will only hurt local airlines.

The Philippines is set to hold air talks with the UAE at the end of August and possibly increase flights between both countries.

PAL said in a statement on Wednesday, August 19, that many government-subsidized UAE airlines have been lobbying for more flights into the Philippines to carry passengers to destinations beyond the country, to the detriment of Philippine-based carriers.

“We call on the Philippine panel to the PHL-UAE air talks to refrain from giving Middle East carriers undue advantage by granting more capacity and frequency beyond what the market requires,” PAL President Jaime Bautista said in the statement.

Citing an interview with Manila Times in June, PAL said a Cebu Pacific senior executive expressed concerns over the Philippines’ plans to enter a fresh round of air talks with the UAE, given Philippine entitlements have yet to be fully utilized by local airlines.

“Cebu Pacific believes that a new round of air talks with the UAE should not be held until all available Manila-use entitlements are fully utilized by Philippine carriers who are ready, willing, and capable of operating routes to UAE, including Cebu Pacific,” PAL said as it quoted JR Mantaring, officer-in-charge of Cebu Pacific corporate affairs.

According to PAL and Cebu Pacific Air, there are over 700,000 Filipinos working in the UAE.

Unfair competition

PAL said it echoes the sentiment of the US airline industry against tactics of Middle East airlines that are being investigated for “unfair competition.”

The flag carrier said it hopes the Philippine government will safeguard the interests of Filipino air travelers against the negative implications of “additional yet unwanted flights from the Middle East, especially with next week’s air talks between the Philippines and the UAE.”

According to PAL, the US government is looking into allegations of unfair practices of carriers from the UAE and Qatar that are subsidized by their governments by as much as $42 billion.

Allegations not true

PAL’s Bautista said the Philippine air panel should learn from the bitter experience of major US airlines in dealing with their counterparts from the Arabian Gulf, including Emirates and Etihad.

“We hope our own government will promote fair competition and support our airlines who have invested much in re-establishing air links to the Middle East and Europe,” Bautista said.

But according to Emirates, allegations of subsidy and unfair competition leveled by the major US legacy carriers – Delta, United and American Airlines – are completely false.

“The allegations of subsidy and unfair competition is completely false and we have recently released a point-by-point, fact-based response that systematically disproves these allegations,” the UAE-based airline said in a statement.

In December 2014, PAL and Cebu Pacific scored victory after the government penalized Emirates Airlines from using flight frequencies beyond its allocation for the Manila-Dubai route.

The Civil Aeronautics Board has fined Emirates P1.8 million ($38,838.21), and has ordered the airline to stop selling tickets for a third daily flight for schedules beyond December 26, 2014.

PAL said United, Delta, and American Airlines formed a coalition calling on Washington to enforce the open skies agreement, which, they said, is weighted in favor of Gulf carriers.

It asked the US government to put a temporary block on new US-bound services by Etihad Airways, Emirates, and Qatar Airways, PAL said.

Source: Chrisee Dela Paz, Rappler.com

CAB Scraps Airline Fuel Surcharge, Airlines Confirm Airfare Rollback


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MANILA, Philippines–Expect airline ticket prices to ease as early as next week as the government scraps the fuel surcharge on domestic and international flights operating in the Philippines because of the sharp decline in global crude oil prices.

Civil Aeronautics Board (CAB) executive director Carmelo Arcilla said Wednesday that the resolution to remove the fuel surcharge was signed Wednesday. He said that airlines would be served with the order starting Thursday and will be effective “immediately.”

The effect on the ticket price is expected to vary. The fuel surcharge runs from a few hundred pesos for domestic flights to several hundreds of US dollars for long-haul international flights.

By Monday

“It should be safe to say that carriers should have removed the surcharge by next Monday,” Arcilla said, taking into account the time the order is given to carriers and the upcoming weekend. The order will not affect tickets that have been purchased before airlines have been formally notified.

In line with this, the CAB published Resolution No. 79 (BM 10-12-22-2014), which also noted that oil prices have declined 25 percent from June to November. Crude oil this week fell below $50 per barrel, extending the drop to about 50 percent, with some forecasts pointing to prolonged weakness in the commodity’s value as global demand slows.

The fuel surcharge is typically granted by the government to help airlines recover part of volatile fuel costs, usually an airline’s single-biggest operating expense. But this should no longer apply when oil prices are falling, Arcilla said.

“With the substantial and continuous decrease of fuel prices in the world market, the board has deemed it appropriate to compel airiness to discontinue their imposition of fuel surcharge,” part of the CAB resolution read.

Airlines unhappy?

The resolution specifically removes “the authority of domestic airlines and international airlines operating to and from the Philippines to impose fuel surcharges on international and domestic flights,” it added.

Some airlines have indicated they would seek reconsideration, Arcilla said, although he did not name these.

“As far as the board is concerned, it will be given effect,” he said.

In its resolution, the CAB cited other carriers that have either removed or reduced their fuel surcharge. It said Malaysia Airlines had lifted the fuel surcharge since July 2013 while Japan Airlines, Hong Kong Dragon and Cathay Pacific reduced the surcharge last year.

Other carriers argued that fluctuating costs were not the only factor as jet fuel prices are sometimes covered by contracts—meaning carriers have agreed to pay a fixed price for a certain period of time.

Domestic carriers like Philippine Airlines, Cebu Pacific and the local units of AirAsia of Malaysia did not immediately respond to requests for comment.

Source: Miguel R. Camus, Philippine Daily Inquirer

Airlines Confirm Airfare Rollback

MANILA, Philippines – The Civil Aviation Board (CAB) confirmed on Wednesday that all airline companies in the country implemented an airfare rollback.
The House of Representatives committee on transportation issued a resolution last January 8 which orders airline companies to remove the fuel surcharge from the airfares.
According to a report from radio dzMM, Cebu Pacific President and Chief Executive Officer (CEO) Lance Gokongwei, Philippine Airlines Senior Vice President on Airline Operations Ismael Gozon at AirAsia Zest Philippines CEO Joy Cañeba confirmed that the surcharge was omitted in the airfares as mandated by the House Resolution.
The fuel surcharge was a temporary add-on to ticket fares as a contingency for oil price hikes and systems loss.
The CAB conducted two hearings before the House Resolution was issued.
Source:  (philstar.com)

Lower Airfares Seen As CAB Lifts Fuel Surcharge


Mga bagong bayani.
Lower Airfares Expected

MANILA, Philippines – Lower fares await airline passengers as the Civil Aeronautics Board (CAB) ordered the lifting of the fuel surcharge imposed by foreign and domestic airlines.

Per Resolution No. 79 (BM 10-12-22-2014) dated December 22 and published Tuesday, January 6, CAB ordered lifting the authority of domestic and foreign airlines to impose fuel surcharge on domestic and international flights.

“Whereas, with the substantial and continuous decrease of fuel prices in the world market, the Board has deemed it appropriate to compel airlines to discontinue their imposition of fuel surcharge,” CAB stated in the 4-page resolution.

Transportation Undersecretaries Jose Perpetuo Lotilla and Benito Bengzon J., together with Civil Aviation Authority of the Philippines (CAAP) director-general William Hotchkiss III and former Clark International Airport Corporation (CIAC) president Victor Jose Luciano, signed the resolution.

Airline passengers could expect lower air fares starting the end of the week with the removal of the fuel surcharge on domestic and international flights, CAB executive director Carmelo Arcilla said in a telephone interview.

The fuel surcharge depend on the flight’s distance, Arcilla said.

The surcharge ranges from P200 ($4.44*) to P500 ($11.10) for domestic flights, but could go as high as P15,000 ($332.88) for international destinations.

Fuel cost accounts for over 50% of airlines’ total operating costs.

Slash fuel surcharge

The CAB allows airlines to impose such surcharge to help them recover fuel costs and stem losses caused by the sudden upward spikes in fuel prices.

Per prevailing international practice, fuel surcharge may be reduced or removed as it is not part of the basic fare, depending on the price of jet fuel in the world market.

Citing data from the Department of Energy (DOE), the CAB said fuel prices have declined by more or less 25.51% from January to November last year.

As of December 26, jet fuel price in the world market plunged 42% to $75 per barrel, data from the International Air Transport Association (IATA) showed.

On December 5, CAB summoned domestic and foreign airlines to explain why they have not reduced or lifted the fuel surcharge imposed on airline passengers.

Malaysian Airlines lifted its fuel surcharge as early as July 2013.

Asiana, Etihad Airways, Jin Air, Korean Air, and Qantas argued though that jet fuel remains relatively high, and it is not the only factor considered in imposing fuel surcharge.

Cathay Pacific and Hong Kong Dragon Airlines reported a slash in fuel surcharge by 33.44% to $18.30 last October from $27.90.

All Nippon Airways and Japan Airlines reduced their fuel surcharge by 6.9% to $80 in January 2014 from $86.

Gulf Air fixed its fuel surcharge of $90 as early as 2010, followed by Jeju Air at $40 and Qatar Airways at $120 in 2012.

Source: Rappler.com

Lawmakers Hit CAB For Failing To Protect Airline Passengers


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Lawmakers on Monday criticized the Civil Aeronautics Board (CAB) for failing to protect passengers from excessive fares and dismal service of airlines following the holiday flight fiasco involving Cebu Pacific Air which left thousands of passengers stranded in airports.
In House Resolution 1780, Bayan Muna party-list Reps. Neri Colmenares and Carlos Isagani said Cebu Pacific’s holiday flight fiasco has become a common occurrence, with other airlines guilty of causing inconvenience to passengers by cancelling flights, delaying arrivals and departures, and charging them excessive penalties and rebooking fees.
Colmenares and Zarate noted passengers never get refunds when airlines cancel or change flight schedules.
Despite such violations committed by airlines, the lawmakers said CAB “has failed to protect the interest of airline passengers up till now.”

Accountable For Dismal Service

In an earlier interview, Colmenares said CAB is also accountable for the airlines’ dismal service.
“While it is good that the CAB will already start their investigation to get to some of the details of the continued inconvenience of airline passengers, I think that the CAB should also be probed for not doing its duty to regulate these airlines and protect airline passengers,” he said.
CAB last week summoned Cebu Pacific officials to explain the cancellation of 20 flights and the delays of 720 others from Dec. 24 to 26, which caused inconvenience to thousands of passengers.
CAB officials dismissed as “unacceptable” the argument that fiasco was caused by air traffic congestion, weather condition, and sudden leave of absence of ground crews.
It will release its recommendation for the airline, including the sanctions it may face, by mid-January.
‘Deceptively Low’ Fares
Other problems which the lawmakers said should be investigated by Congress the practice of airlines offering “deceptively low” initial base fares, but charging them prohibitive taxes and surcharges, and the policy of making passengers pay for the use of the passenger tube even though it should be a service.
In addition, Colmenares and Zarate said airlines should offer lower fares by now as fuel prices have decreased significantly in recent weeks.
Also on Monday, Eastern Samar Rep. Ben Evardone filed House Resolution 1782 asking the House committees on transportation and legislative franchises to probe Cebu Pacific in particular for possible violations of Republic Act 7151 and other related laws over the widespread flight delays and cancellations during the peak holiday season.
The lawmaker noted the airline had no excuse to cancel as well as delay the arrivals and departures since there was no reported weather disturbance in Metro Manila during those three days.
“There have been complaints by paying passengers on Cebu Pacific’s poor services, resulting in long queues, flight delays and cancellations without due notice, overbooking, among others, even on Christmas holidays, on December 24, 25, and 26, 2014, in particular,” he said.
Franchise Duties
Section 3 of Republic Act 7151, which granted Cebu Pacific’s franchise to operate an airline in 1991, states: “Excepting cases of force majeure and whenever weather conditions permit, the grantee shall maintain scheduled/ non-scheduled/ chartered air transport services between and all points throughout the Philippines.”
Citing news reports, Evardone attributed the disenfranchisement of Cebu Pacific’s passengers during the holiday travel season to the airline’s apparent lack of a contingency plan to address the deluge of passengers, especially at the Ninoy Aquino International Airport (NAIA).
Evardone warned the airline could lose its franchise if Congress finds it remiss in fulfilling the duties stated in its franchise.
“[A]s grantors of the franchise, it is incumbent upon this august body to check on the conduct of Cebu Air Inc., as grantee and terminate the franchise for the common good,” he said.
Source:VS, GMA News

Saudi Arabian Airlines Applies To Operate in Philippines


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SAUDI Arabian Airlines has asked the commercial air service regulator for permission to operate international scheduled passenger and cargo services, according to a filing with the Civil Aeronautics Board (CAB).

 Saudi Arabian Airlines applied for a foreign air carrier permit, the first step in a process that will ultimately require Presidential approval.

The CAB, meanwhile, said it is scheduled a hearing for Saudi Arabian Airlines’s application on Aug. 27.

Under Section 16 of Republic Act 776, the carrier is required to publish a notice of hearing at least once for three consecutive weeks in a newspaper of general circulation.

Saudi Arabian Airlines operates four Boeing 747 aircraft, 22 Boeing 777s, 12 Boeing 777-300 Extended Range models, 50 aircraft of various types from the Airbus A320 family, 12 Airbus A330-300s and 15 Embraer 170 regional aircraft.

The carrier flies to the United Arab Emirates, Yemen, India, Nigeria, Turkey, Bahrain, Sri Lanka, Spain, Lebanon, Ethiopia, Egypt, Tunisia, Singapore, France, Sudan, Syria, Qatar, United States, Italy, German, Switzerland, United Kingdom, Hong Kong, Algeria, Pakistan, Kenya, Malaysia, Kuwait, Pakistan, Maldives, Iran, Morocco, the Philippines, Egypt, Jordan, Saudi Arabia, Oman, Yemen, and Indonesia.

In 2012, the Philippines and the Kingdom of Saudi Arabia agreed to increase air services between the two countries to 21 flights per week from the current 10.

Source: Chrisee Jalyssa V. Dela Paz, BusinessWorld Online

AirAsia PH, AirAsia Zest Eye Myanmar Flights


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MANILA, Philippines – AirAsia Philippines, as well as its unit AirAsia Zest, are looking to start flights to Myanmar as part of route expansions.

AirAsia Philippines is seeking entitlements of 1,260 seats between Manila and Yangon, according to its application with the Civil Aeronautics Board (CAB). AirAsia Zest is seeking allocation of entitlements for 7 weekly fights between Manila and Yangon.

Earlier, budget airline Cebu Pacific and unit Tiger Airways Philippines sought the approval of CAB to mount flights to Myanmar. Cebu Pacific’s application seeks 1,260 weekly seats for flights between Manila and Yangon, while Tigerair Philippines also filed a separate application with the CAB seeking 1,260 weekly seats for the Manila-Yangon route.

CAB executive director Carmelo Arcilla earlier said the Philippines and Myanmar signed a new air pact, updating an older agreement from 1979.

The agreement would allow the designated airlines of each country a total of 3,780 seats per week – about 3 flights per day – for each country between Manila and points in Myanmar. The Philippines and Myanmar also agreed on unlimited traffic rights between all points in the Philippines, except Manila, and all points in Myanmar.

“Myanmar is a rapidly growing economy of about 60 million people, with a potential for the development of direct connectivity with the Philippines,” Arcilla said. – Rappler.com

Cebu Pacific & Tigerair Philippines Eye Myanmar


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PLANES of sister airlines Cebu Pacific and Tigerair Philippines may soon traverse the air space of Myanmar, as the two carriers seek for the allocation of frequencies between Manila and Yangon.

In separate filings to the Civil Aeronautics Board, the two carriers said they are seeking to corner 1,260 weekly seats, each or a total of 2,520 allocations, to Myanmar.

This represents almost three quarters of the recently bagged frequencies during the air-services talks held in Yangon last month. Civil-aviation representatives from both Manila and Yangon agreed to allot some 3,780 weekly seats, signing a new air-services pact. The original air-services contract was signed in 1979.

Cebu Pacific Spokesman Jorenz T. Tañada said that his firm sees a huge potential in the new destination.

“Myanmar is an emergent fellow Asean economy with great trade and tourism potential. Cebu Pacific, being cognizant of this, would like to play its part in fostering trade and tourism between our two countries,” he said in a text message.

Cebu Pacific operates an extensive route network serving 60 domestic routes and 34 international routes, with a total of 2,231 scheduled weekly flights.

It operates from six hubs, including the Ninoy Aquino International Airport Terminal 3 in Pasay City, Metro Manila; Mactan-Cebu International Airport in Lapu-Lapu City, part of Metropolitan Cebu; Diosdado Macapagal International Airport in Clark, Pampanga; Davao International Airport in Davao City, Davao del Sur; Iloilo International Airport located in Iloilo City, regional center of the western Visayas region; and Kalibo International Airport in Kalibo, Aklan.

The dominant budget airline has a 51-strong fleet comprising of 10 Airbus A319, 30 Airbus A320, three Airbus A330 and eight ATR-72 500 aircraft. Tigerair Philippines currently operates about 118 flights per week, with five aircraft to 11 domestic and international destinations, from its bases in Manila and Clark.

Cebu Pacific in March completed the purchase rival Tigerair Philippines in a deal worth $15 million, allowing the largest local budget carrier to further cement its market share in the country.

Source: Lorenz S. Marasigan

NAIA-3 Repairs Seen Done Next Month


NAIA Terminal 3
NAIA Terminal 3

REPAIR work on Ninoy Aquino International Airport Terminal 3 (NAIA-3) is set to finish next month, the Transportation department said in a statement yesterday.

The agency also said that the rehabilitation of NAIA-1 would be done in January 2015.

In August 2013, the Transportation department and Japanese contractor Takenaka Corp. signed a P1.9-billion deal to complete NAIA-3. The works include baggage handling, flight information displays, computer terminals, gate coordination, and fire protection systems.

The Transportation department said that the completion of the project would pave the way for the transfer of five airlines — Singapore Airlines, Delta, Emirates, Cathay Pacific, and KLM Airlines — from NAIA-1 by August.

“This will also help decongest Terminal 1 and allow more flexibility in the on-going rehabilitation efforts,” the agency said in the statement.

The transfer of some foreign airlines to NAIA-3 would cut the number of NAIA-1 users by 3.5 million passengers from the current 8 million.

The P1.64-billion rehabilitation of NAIA Terminal 1, which entails structural retrofitting, architectural works, and improvement of mechanical, electrical, plumbing, and fire protection facilities, was awarded to DMCI Holdings, Inc. in Dec. 2013.

Wall St. Cheat Sheet, a United States financial media company, has ranked NAIA eighth among the 10 Worst Airports in the World, citing overcapacity issues in Terminals 1 and 3.

Overall passenger traffic at Philippine airports slightly went down last quarter, data from the air service regulator showed.

The Civil Aeronautics Board (CAB)’s data showed that combined domestic and international passenger traffic went down by 2.41% to 9.32 million in the last quarter from 9.55 million in the same period last year.

International air passenger traffic decreased by 6.68% to 4.19 million from 4.49 million, but domestic passengers went up by 1.58% to 5.14 million from 5.06 million in the same period last year.

Source: C.J.V. Dela Paz, business world on line.com

Foreign Firms Eye NAIA Runway Consultancy Deal


MANILA, Philippines – Three foreign companies expressed interest in the P91.4-million consultancy contract to increase the runway capacity of the Ninoy Aquino International Airport (NAIA).

The Department of Transportation and Communications (DOTC) said the 3 firms included Mitre Corporation of the United States, NATS Ltd of the United Kingdom, and Copenhagen Airport of Germany.

DOTC Secretary Joseph Emilio Abaya said the agency would still pursue the runway optimization project despite two failed biddings.

“The likes of Mitre, NATS, and Copenhagen Airport have expressed interest. NATS in particular did a consultancy in Hong Kong and Singapore and they have increased movements by 20%,” Abaya said.

According to representatives from the UK-based NATS Ltd., it is possible to increase the capacity of the existing NAIA runway to between 50 and 60 movements per hour from the current 40 movements per hour, the transportation chief said.

“We need that kind of expertise to tell us what so we improve our movements per hour,” Abaya added.

Improving the airside capacity of the country’s main international gateway involves increasing runway movements, improving slot schedules, adding infrastructure, and upgrading technology.

Civil Aviation Authority of the Philippines (CAAP) deputy director general Capt John Andrews earlier said airlines lose at least P7 billion a year because of congestion in NAIA.

Passenger Volume

To better accommodate an increasing number of passengers, the DOTC is also planning to push through with the construction of a 2.1-kilometer parallel runway, to be constructed south of the existing primary runway 06/24.

The Civil Aeronautics Board (CAB) said that passenger volume in the Philippines increased in the first quarter of 2014 to 9.65 million, up from 9.55 million in the same period last year.

International passenger traffic reached 4.50 million while domestic air traffic increased by 1.5% to 5.13 million.

“Growth has been slow but positive and we hope to improve it this year. The CAB will continue to support Philippine tourism and business travels through strategic and key bilateral aviation partnerships,” CAB Executive Director Carmelo Arcilla said.

A study by the Japan International Cooperation Agency (JICA) showed that the number of passengers in Greater Capital Region would hit 106.7 million by 2040 – more than triple the 31.88 million recorded in 2012.

To address this, the DOTC is eyeing a new international airport by 2027 with the joint development of NAIA in Manila and the Clark International Airport in Pampanga.

Diversified conglomerate San Miguel Corporation also plans to put up an international airport in a 1,600-hectare property along the Manila-Cavite expressway coastal road. – Rappler.com

Philippine Air Traffic Slips 2.6% in Q1


MANILA, Philippines – Air traffic in the Philippines slipped close to three percent in the first quarter of the year amid the slight decline in international passengers with budget airline Cebu Air Inc. (Cebu Pacific) emerging as the preferred airline of passengers.

Data released by the Civil Aeronautics Board (CAB) yesterday showed that air traffic in the Philippines reached 9.32 million from January to March this year or about 254,000 lower compared to 9.576 million in the same period last year.

Volume of domestic passengers inched up 1.5 percent to 5.137 million in the first quarter from 5.062 million in the same period last year while volume of international passengers slipped by 7.1 percent to 4.18 million from 4.5 million.

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Gokongwei-led Cebu Pacific dominated the domestic market as it flew 2.65 million passengers followed by national flag carrier Philippine Airlines Inc. and PAL Express with 1.658 million, AirAsia Zest with 514,761; Tiger Airways Philippines with 216,169; AirAsia with 74,739; Island Voyager with 17,841; and Magnum Air with 3,768.

In terms of traffic of international passengers, Philippine carriers flew 2.27 million passengers while foreign airlines carried 1.91 million passengers.

PAL, jointly owned by taipan Lucio Tan and diversified conglomerate San Miguel Corp. (SMC) flew 1.23 million passengers in the first quarter while its unit PAL Express carried 36,898 passengers.

Source: Lawrence Agcaoili, philstar.com