- Runway length: 2,600 meters
- Floor Area: 13,000 square meters
- Seat capacity: 1,500
Puerto Princesa Airport could experience major growth as the Philippine island of Palawan emerges as a popular tourism destination. AirAsia is particularly keen to pursue major growth in Palawan and use Puerto Princesa as an international hub.
The small airport, which currently only handles domestic is flights and international charters, has been operating well above capacity. But a major expansion project is expected to be completed by early 2017, providing a new terminal and international facilities.
Philippines AirAsia (PAA) plans to launch scheduled international flights from Puerto Princesa to China and potentially other international destinations including Malaysia. For now Philippine market leader Cebu Pacific has no plans for international operations at Puerto Princesa but could be swayed to relook at the market if PAA’s focus on Palawan proves successful.
Palawan Attracted Almost 1M Visitors in 2014
Caticlan, which a 10min ferry from the popular tourist island of Boracay, is currently the 14th largest airport in the Philippines based on current seat capacity. The rapid growth over the last several years in visitor numbers to Boracay has mainly been accommodated by Kalibo Airport, which is about 70km from Boracay and Caticlan. As CAPA highlighted in the first report, Kalibo is now the fourth largest airport in the Philippines after Manila, Cebu and Davao.
Manila, Cebu and Davao are all major population centres while Kalibo and Puerto Princesa relies almost entirely on inbound traffic. Aklan province, where Kalibo and Boracay are located, reported 1.5 million visitor numbers in 2014 while Palawan province reported just under 1 million visitors.
Palawan is positioned for potentially faster growth than Boracay and could eventually overtake Aklan as the second largest tourist region in the Philippines after Central Visayas. Central Visays, which includes Cebu and nearby islands, has about 3 million annual visitors.
Boracay is already well developed and has become congested. Palawan is a much larger island is still largely undeveloped. The island is about 500km long (but very narrow) and has a population of less than 1 million.
Puerto Princesa Airport Is Now Operating Well Above Capacity
The Puerto Princesa Airport currently handles about 1.5 million annual passengers but was designed to accommodate only about 350,000 annual passengers. A major expansion project began in 2014 with the awarding of a USD83 million project to a Korean construction company.
Construction began in late 2014 and is expected to be completed by early 2017. The project includes a new passenger terminal with capacity to handle 2 million annual passengers, a cargo terminal, apron, taxiways and new navigation equipment. The new terminal has been designed to handle regular international flights, which the Palawan tourism sector is keen to attract.
The Philippine and Palawan governments expect the new airport to meet international standards and see the facility as a key component in a plan to attract more tourists to Palawan island. Philippines president Benigno Aquino III visited the airport and construction site on 29-Jun-2015, an indication of the importance the government has placed on developing an international airport to help support growth of Palawan’s promising tourism sector.
AirAsia Sees Opportunities To Grow in Palawan
In Mar-2015 the Palawan government along with AirAsia and other partners launched a tourism campaign to promote the island, which was voted in 2014 as the “best island in the world” by Conde Nast Traveller readers. The “World’s Best Island” campaign is designed to increase awareness among both domestic and international travellers and make Palawan more affordable through more seats, cheaper fares and new hotel packages.
The campaign aims to double the number of visitors to Palawan in 2015 to 2 million. But such a goal seems unrealistic as seat capacity at Puerto Princesa has increased only slightly. AirAsia pledged as part of the campaign to add a fifth daily flight on the Manila-Puerto Princesa route but its schedule for Jul-2015 and the remainder of 2015 show it will maintain four daily frequencies.
AirAsia has identified Puerto Princesa as one of two or three new international hubs that the group plans to open in the Philippines as PAA/AirAsia Zest restructures its network. The new business plan for the two carriers, which are expected to eventually transition to a single air operators’ certificate, focuses on developing under-served leisure destinations.
As CAPA has previously highlighted, AirAsia’s Philippine operation has struggled financially since it was launched in 2012. But the group sees emerging leisure destinations in the Philippines such as Puerto Princesa as having huge opportunities for growth while staying under the radar screen of Cebu Pacific.
Cebu Pacific for now is studying potential opportunities at Puerto Princesa but the typically conservative carrier is unlikely to make a move until the market becomes more mature. PAL is also unlikely to launch scheduled international flights at Puerto Princesa and instead stick to charters which have little or no risk as they are underwritten by agents in key source markets such as Taiwan.
AirAsia Expects To Serve China From Puerto Princesa
The AirAsia strategy for Puerto Princesa envisions launching several scheduled routes to mainland China. AirAsia plans to wait for the new international terminal and customs facility, which could potentially be completed by the beginning of the 2016 northern winter season.
Shanghai would be a logical initial route for AirAsia’s new international hub at Puerto Princesa as PAA/AirAsia Zest already serve Shanghai from Kalibo and has been looking at resuming service to Shanghai from Manila. There are several other potential Chinese routes from Puerto Princesa as the AirAsia Group already serves 13 Chinese airports from its hubs in Thailand and/or Malaysia.
AirAsia is keen to leverage its strong presence in the Chinese international market, where it is the leading LCC, by opening new routes to popular leisure destinations throughout Southeast Asia. AirAsia is already serving China from several secondary airports, including Krabi in Thailand and Kalibo in the Philippines, and is expected to add several more including Puerto Princesa over the next few years.
The new AirAsia business plan for its Philippines operation also envisions the launch of flights to Japan, Singapore and Taiwan. But at least for now the focus is on launching flights to Taiwan from Manila and to Japan and Singapore from Cebu.
PAA/AirAsia Zest currently operates 10 scheduled international routes, connecting three Philippine airports (Cebu, Kalibo, and Manila) with seven destinations – Busan, Hong Kong, Kuala Lumpur, Kota Kinabalu, Macau, Seoul and Shanghai.
Seoul is served from all three bases while Busan and Shanghai are only currently served from Kalibo. Hong Kong, Kuala Lumpur and Macau are only served by PAA/Zest from Manila although sister carrier Malaysia AirAsia serves Cebu, Manila alternative airport Clark and Kalibo from Kuala Lumpur. PAA/Zest now serves Kota Kinabalu from both Cebu and Manila, having launched Cebu-Kota Kinabalu in late Mar-2015.
AirAsia May Link PPS With Kota Kinabalu
PAA has stated it is interested in also serving Kota Kinbalu from Puerto Princesa. The two airports are only about 500km apart as Palawan is in the westernmost portion of the Philippines while Kota Kinabalu is located on the island of Borneo in eastern Malaysia.
Previous attempts to connect Kota Kinabalu with Puerto Princesa have been short-lived. Most recently Malaysia Airlines regional subsidiary MASwings operated the route from Nov-2013 to Aug-2014. Philippine regional carrier SEAir also briefly served the route in late 2008 and early 2009.
AirAsia has the advantage of leveraging strong sales channels in both Malaysia and the Philippines and marketing Kota Kinabalu-Puerto Princesa to foreign tourists that rely on AirAsia to hop around Asia. AirAsia also has a hub and transit product in Kota Kinabalu, which would provide passengers from several Southeast Asian cities (including Jakarta, Kuala Lumpur, Penang and Singapore) an opportunity to access Puerto Princesa without backtracking through congested Manila.
A Puerto Princesa-Kota Kinabalu link could be used to target source markets for the emerging Palawan tourism sector in Southeast Asia while Puerto Princesa-Manila and potentially a new Puerto Princesa-Cebu service could be used to target source market in North Asia that do not get new direct flights from Puerto Princesa. But at this point it is hard to imagine sufficient demand for regular A320 service between Kota Kinabalu and Puerto Princesa given the challenges other carriers faced in filling up much smaller aircraft on this route.
Puerto Princesa Has Big Potential But Also Big Challenges
The Puerto Princesa market clearly has huge long-term potential as tourists from within the Philippines and abroad are attracted to Palawan’s unspoiled beaches, particularly as other Philippine holiday destinations such as Boracay become increasingly crowded. But there could be challenges in developing international routes after the Puerto Princesa Airport is upgraded.
While AirAsia is extremely optimistic on the prospects for Palawan, other Philippine carriers are taking a more cautious wait and see type of approach. For example Cebu Pacific is now focusing on expanding international operations from other secondary airports in the Philippines although it will almost certainly make a move at Puerto Princesa in future if the market matures and it sees opportunities.
Therefore AirAsia will likely be the litmus test when the Puerto Princesa Airport starts to handle scheduled international flights.
A hub at Puerto Princesa could pay big dividends for AirAsia’s struggling Philippine joint venture and become a profitable niche. But it also represents a big gamble as AirAsia tries to turn around its Philippine operation.
THE DEPARTMENT of Transportation and Communications (DoTC) has released development plans for the country’s six major airports in a bid to further unlock their potentials for tourism.
An initial P5.8 billion have been earmarked for initial investments in the Puerto Princesa International airport for the construction of new facilities, which include the development of its 2,600m x 45m runway and the expansion of the passenger terminal building, both of which are slated for completion in 2017.
The phase 1 of the development of the Iloilo International Airport, considered as the 5th busiest airport, will have an investment of P4 billion. The project development includes the expansion of the 13,700 sq. m. passenger terminal building to as much as five times of its original size.
The Bacolod-Silay International Airport is also set to receive P3.6 billion for the phase 1 of the development and expansion of its runway and passenger terminal building; the Davao International Airport, P5.8 billion; Laguindingan International airport, P2.2 billion; and the New Bohol (Panglao) Airport, P4.5 billion.
The agency is eyeing to submit these plans to the National Economic and Development Authority (NEDA) Investment Coordination Committee on the second quarter of this year, Mr. Lavides said.
For the Clark International Airport, Mr. Lavides said that the construction of a new terminal is under study and plans will be submitted to the NEDA ICC by the first quarter of this year.
Other key secondary airports, which include the Tuguegarao Airport, Roxas Airport, Iloilo International Airport, Bacolod International Airport, Surigao Airport, Butuan Airport, Ozamis Airport, Zamboanga International Airport, General Santos International Airport, and the Sanga-Sanga airport will also receive a total of P6 billion for their development.
MANILA, Philippines – The Department of Transportation and Communications (DOTC) started yesterday the search for a concessionaire to develop at the same time operate and maintain six provincial airports in a contract worth P116.2 billion.
In an invitation to prequalify and bid, the DOTC through the Civil Aviation Authority of the Philippines (CAAP) invited prospective bidders to finance, design, construct, operate, and maintain the Bacolod-Silay, Davao, Iloilo, Laguin-dingan, New Bohol (Panglao), and Puerto Princesa airports.
The biggest project is the P40.57-billion contract to improve the services and enhance the airside and landside facilities at the Davao international airport followed by the P30.4-billion contract for the Iloilo international airport.
Other projects are the Bacolod – Silay international airport worth P20.26 billion, the Laguindingan airport, P14.62 billion; Puerto Princesa airport, P5.81 billion; and New Bohol (Panglao) airport, P4.57 billion.
The DOTC said the 30-year concession contract would be awarded through a competitive bidding following the rules and procedures prescribed under the Build-Operate-Transfer (BOT) Law.
The DOTC is set to apply the two-stage/two-envelope system for soliciting bids under the BOT Law.
The private sector concessionaire for the Bacolod-Silay, Davao, Iloilo, and Laguindingan airports would take over the operations and maintenance; undertake immediate expansion of the passenger terminal buildings, apron, other airside and landside facilities; and any capacity augmentation to cater to future demand throughout the contractual term.
Likewise, the private proponent would also take over the operations and maintenance of the New Bohol (Panglao) and Puerto Princesa airports.
The DOTC pointed out that the traffic at the six provincial airports has either exceeded or is nearing their design capacity levels making the fast and proactive development crucial.
Traffic at the Davao international airport has been growing at an annual rate of 10.56 percent over the past five years and handled 2.79 million passengers last year making it the third busiest airport in the Philippines after the Ninoy Aquino International Airport (NAIA) as well as the Mactan – Cebu international airport.
Volume of passenger at the Iloilo international airport has been growing at an average rate of 11 percent over the past five years to hit 1.82 million last year making it the fifth busiest airport in the country.
The Laguindingan airport is the sixth busiest airport in the country as volume increased averaged 15.1 percent to hit 1.78 million last year followed by the Puerto Princesa with an average increase of 22.8 percent to hit 1.33 million, and the Bacolod-Silay international airport with an average growth of 9.6 percent to reach 1.32 million last year.
The DOTC has tapped a loan from the Japan International Cooperation Agency (JICA) to put up the New Bohol airport in Panglao Island that would replace the Tagbilaran airport once completed in the middle of 2017.
Source: Lawrence Agcaoili, The Philippine Star
The government is set to bid out the operations and maintenance of eight major Philippine airports, including Ninoy Aquino International Airport (NAIA) and Clark International Airport, a Cabinet official revealed on Tuesday.
- Laguindingan Airport
- Panglao Airport
- Puerto Princesa Airport
- Davao Airport
- Iloilo Airport
- Bacolod Airport
The National Economic and Development Authority (NEDA) Board has given the green light for the Laguindingan and Panglao, while feasibility studies are in the process for NAIA and Clark.
After suffering and putting up with one of the world’s worst airports for years, many Netizens were beside themselves with excitement over the two-point proposal of PAL president and San Miguel CEO Ramon Ang to build a second runway at NAIA and a new world-class airport at the Cyber Bay area of Manila Bay.
The reaction is understandable considering the virtual disintegration of NAIA in comparison to airports of neighboring countries as well as the actual environment and services at the airport.
But while Netizens were busy wishing the new airport and the second runway into reality, several people missed the fact that by allowing Ramon Ang and San Miguel Corp. to make a presentation to the President and the Cabinet, Malacañang, particularly the President, may well be saying or showing that they are open for business and that the President welcomes professional advice and serious proposals outside of his Cabinet and best buddies.
It can also be considered as Presidential action to reduce red tape and legal paranoia that have so plagued his administration from day one. As the older members of media have continuously pointed out, the P-Noy administration has an overload of lawyers and not enough doers.
Considering the widespread and positive feedback that the presentation garnered from social and traditional media, the President should ride the wave and invite more mavericks, doers and even “critics” to the palace or some neutral forum where he can pick people’s brains, harvest fresh ideas, or anoint doers to get on with their program.
While P-Noy may carry the burden of leadership he should also consider and remember that all of the great leaders, big businessmen, even visionaries in history as well as in the Philippines never did it alone.
Many of them were full pledged ENABLERS who found people like Ramon Ang and simply supported an idea or a concept whose time had come, or was the answer to a common problem.
In an era where “innovation” is the buzzword, we need to remember that it is not usually the original idea that worked, brought fame, or made millions. In many cases, the man or the leader who recognized the potential or took advantage of it often got the credit and the honor.
In the case of the RSA proposals, neither P-Noy nor RSA or even the Filipino people will benefit or get any honor unless we enable each other to do our part, which takes me to the next point. In case no one noticed, the development of the Cebu/Mactan International Airport fell in the lap of an India-based outfit.
Then the government recently announced that the Palawan airport development project went to a South Korean company.
At the rate the DOTC officials have been responding to Ang’s proposal, it would seem like our one big chance of having a world-class airport built by Filipinos might slip by and end up with foreigners once again, simply on the merit of Jurassic rules and “cheapest gets the project.”
Ever since the P-Noy administration took over, people have talked about being proud of the Philippines, about promoting the Philippines. So far the only thing we can really consider a joint effort of all Filipinos, that is a certified success, is our “It’s More Fun in The Philippines” tourism campaign.
The anti-corruption campaign remains an acoustic war full of threats but no prisoners. But now we actually have a worthy challenge both for government and the private sector.
Here we have a chance to change the rules, rewrite our history of divisiveness and crab mentality, and actually attempt what has been commonplace in the private sector.
Anyone who thinks the new airport can’t be done is either blind or been living underground for the last few years. The Mall of Asia was built by a Filipino company. The Arena followed right after.
Just last Wednesday I drove around the spectacular stadium of the Iglesia Ni Cristo in Bulacan, which reminded me of a super stadium in the United States. The INC stadium is HUGE, beautiful and from the outside clearly world-class.
So why can’t Filipinos, why can’t a world class Filipino company that is San Miguel Corp. build the airport we can be proud of? The fact of the matter is “Anything can be what we want it to be, if we want it hard enough.”
The problem is we have allowed the naysayers, our competitive spirits, and jealousy to get out of control, to the point of hurting all of us, not just our enemies or competitors.
Every modern day leadership guru or billionaire teaches us that our passion and our idea will only work and succeed when we share it with others. What we must first learn to share is a vision and our individual ability to think big and build big.
It is understandable that government officials are limited or fenced in by their reality and legalities, but that is also why government needs to combine and cooperate with private sector, not just stand on the sidelines or stay within the box.
My mentors have taught me that it is a lot easier to make or find P10 million than P1 million. People will willingly partner, fund or lend money to a great new idea, than to an old one with small returns.
The truth of the matter, although many of them won’t admit it, is that many of the so-called rival corporations and business leaders share or partition projects from time to time.
The only reason things get rough is when the project is too small or there is very little meat on the bone. Building what could be the Pangdaigdigang Paliparan ng Pilipinas (PPP) will be so huge it could be a construction fiesta for many corporations in the Philippines.
The next thing “would-be doers” need to learn is to see the problem and come up with the solution.
Many people throw their hands up the minute they see the problem because they don’t know the answer. What I’ve learned is someone else usually has the answer or is the solution.
The Philippine government had a problem called NAIA and is tied up in lots of bureaucracy. San Miguel Corp. has boldly stepped up to the plate and pitched.
Do we go for a home run or do we sit and watch some foreign company take over yet again? “Puso” and “Bayanihan” are not just words — they are Filipino.
Source: CTALK by Cito Beltran, Philippine Star
Cebu City , Philippines – Megawide Construction Corp., one of the most active local companies in the public-private partnership (PPP) scene, is joining more auctions for airport rehabilitation and operations.
The consortium of Megawide and Bangalore-based GMR Infrastructure Ltd. will continue their partnership that recently bagged the P17.5-billion Mactan-Cebu International Airport (MCIA) deal, executives said.
Megawide chief financial officer Oliver Tan said the company is planning to join the bidding for six more airport PPP projects this year.
“The Philippines is the fastest growing economy in this region. Tourism is a growing business and considering that, it generally means that airport development is good in the Philippines,” said Manish Khalghatgi, vice president for corporate communications of GMR.
Khalghatgi said Megawide-GMR tandem is ready for more airport projects particularly in Visayas and Mindanao.
The government plans to roll out more PPP projects this year including the P15.92-billion operation and maintenance (O&M) of the Laguindingan airport, the P2.34-billion enhanced O&M of the new Bohol airport. It also listed the O&M of the Puerto Princesa, Iloilo, Davao, and Bacolod airports as PPP projects.
The Megawide-GMR consortium last week received the formal award of the P17.5-billion MCIA project, the largest PPP offered to date.
Aside from airport projects, Megawide is also interested to be the contractor for the winning bidder of the P65-billion Light Rail Transit Line 1 elevated railway extension to Cavite province, Tan said. Megawide is also preparing to join the bidding for the P35.6-billion Cavite-Laguna Expressway project.
So far, Megawide has bagged four PPP projects: the P5.7-billion new Philippine Orthopedic Center, the MCIA, the PPP School Infrastructure Project Phase One (PSIP-1) and PSIP-2.
Despite numerous projects on its plate, Megawide is still prepared to pursue more infrastructure ventures.
“The airport is a collaboration with GRM and Megawide. We will have an entirely separate organizational structure,” Tan said.
Megawide also has manageable debt levels as available cash is larger than existing debts, Tan said.
For its part, GMR has the skill and the expertise for end-to-end airport projects that deal with financing, rehabilitation and operation, Khalghatgi said.
Megawide is one of the top contractors in the Philippines while GMR is the world’s third largest private airport developer in terms of passenger traffic.
Source: Neil Jerome C. Morales (The Philippine Star)
MANILA, March 20 — The Philippine government plans to upgrade 12 airports, including Manila’s dilapidated main international airport, as it seeks to attract 10 million foreign tourists by 2016 and help fuel one of Asia’s fastest growing economies.
Three of the projects have a combined cost of up to ₱54.6 billion (RM3.99 billion), while costs for others are still being finalised.
Half of the planned projects will be done through the Public-Private Partnership (PPP) scheme, Cosette Canilao, executive director at the agency overseeing the programme, told reporters on the sidelines of an investors’ forum in Manila.
Canilao also said operations and maintenance of these airports could be “bundled” into one tender, which will be offered to investors later this year.
Transportation Undersecretary Rene Limcaoco said the government was looking at building a new terminal for the Ninoy Aquino International Airport (NAIA) in Manila, the Philippines’ main gateway, which is also undergoing repair.
The Puerto Princesa Airport on Palawan island, southwest of Manila, and Clark International Airport in Pampanga, north of the capital, are included in the list of gateways which the government wants to modernise and upgrade.
The planned upgrades will “ease our logistic costs, alleviate our traffic congestion and support the target of the department of tourism to achieve its 10 million tourists for 2016,” Limcaoco said at the forum.
The Philippines attracted 4.7 million foreign tourists last year, 300,000 short of its goal, state data showed.
President Benigno Aquino wants to make the tourism sector one of the key drivers of the economy. The economy grew 7.2 per cent in 2013, the second fastest in Asia after China.
Rehabilitation of NAIA Terminal 1 will be completed by early 2015 at the latest, while the airport’s Terminal 3 will be fully-operational in July this year, said Limcaoco.
He also said the transportation department is sticking with its end-March target to award the ₱17.52 billion PPP contract for the Mactan-Cebu International Airport Terminal.
Source: Lawrence Agcaoili (The Philippine Star)
MANILA, Philippines – Industrial giants Hanjin and Kumho may join the bidding for the proposed P3.3 billion expansion of the Puerto Princesa international airport, the Department of Transportation and Communications (DOTC) said.
DOTC Undersecretary Jose Perpetuo Lotilla issued Special Bid Bulletin No. 01–2013 containing the agency’s reply on the written queries made by Hanjin Heavy Industries Construction Co. Ltd. and Kumho Industrial Corp.
The Korean companies sought clarification on the terms of bidding of the $79.41 million design-build contract for the expansion of the Puerto Princesa airport that serves as the gateway to Palawan where the Underground River is located.
The DOTC issued an invitation to bid last Aug. 17, urging Korean companies to join the bidding for the project.
The DOTC said interested bidders have until Oct. 15 to submit their bids.
The Puerto Princesa airport development Project aims to improve the existing airport facilities by expanding its present capacity to meet the projected increase in air passenger and cargo demand.
The project involves the rehabilitation or improvement of the existing to meet the standards of the International Civil Aviation Organization (ICAO) through the construction of new landside facilities in the northwestern side of the existing runway such as passenger terminal building, control tower, administration building, cargo terminal building.
The project also involves the construction of a rescue and fire fighting building as well as a new apron and connecting taxiways, and upgrading of the existing 2.6 kilometer runway and its strip, and the provision of new navigational and traffic control equipment.
The Puerto Princesa Underground River was named one of the New Seven Wonders of the World and is expected to generate 1.2 million tourists by 2016 and two million tourists by 2025.
Likewise, the airport is seen to revitalize the transport and trade linkages under the Brunei Darussalam, Indonesia, Malaysia and the Philippines-East ASEAN Growth Area (BIMP EAGA).
The Philippine government through the Department of Finance (DOF) received a loan worth $71.61 million from the Economic Development Cooperation Fund of the Republic of Korea coursed through the Export-Import Bank of Korea.