Its always been a business class trip!

August Special Edition

It can be said that Foreign Travels tells you what kind of leader your President was. Nothing can be more exemplary than President Corazon Aquino.

During the Eulogical speech of Feliciano Belmonte to his former boss last Tuesday, he spoke about how the President entrusted him on the management of some corporate cash cows. One of those prominent cash machines was Philippine Airlines. Its akin to one of the geese that lays the golden egg for the Republic yet an economic time-bomb by itself.

As I watched and listened the necrological episodes in tribute to Cory Aquino, I can't help but recall how her government earnestly tried to managed a growing monster inside the airline that bleeds it to eventual collapse in 1998.

Truly indeed, Cory Aquino, who inherited an ailing economy from the previous government, never dipped a finger on PAL despite her grip of control as Belmonte pointed out. Her brother, Pepeng Cojuangco attested to it. Although its a different story if we talk about her cousin's influence which she has nothing to do about, much so their wealth that goes with it.

Her first foreign travel after assuming office became a standard of what she truly is. A standard too difficult for other leaders to follow. And yet, its always been that way until she stepped down from power.

Cory Aquino traveled in style. A style far from the norm of her predecessor in a class befitting a Head of State. She insisted to travel on business class when first class could have been more better. With a status and power equivalent to today's Chief Executive Officer, she could easily do so on a whim to a company under her control.

But no, she acted like what Lucio Tan always did when traveling his airline. Be like an ordinary passenger just like any body else. Its more like leading by example. After all, as she always said, to Teddy Boy Locsin "its not our money."

While in business class, you would have thought the area where she sat be blocked to cordoned her, but you should be surprised that she sat with other business class passengers.

The Head of State of the Philippines and Philippine Airlines supreme boss insisted to be treated just like a normal business-class passenger.

When she first went to the United States as President in September 15, 1986 to address the United States Congress, She travelled on a tight budget going to Washington with only two suitcases and 15 cabinet officials in tow.

Its always been that way in a Boeing 747-200 during her Presidency, a far cry from her successors in Office and a mile away from her predecessor who on a 1982 visit chartered two 747s, blocked off one first-class section for a bedroom and the entire 747 for the exclusive use of the Presidential family, while another 747 carried the entourage of 300 people.

Few might know that Cory Aquino earned the distinction to be the only Philippine President to board Air Force One that ferried her from San Francisco to Washington, although the US 747 was coded as Air Force two because of the presence of Vice President George Bush. She was also the only Philippine President to board Marine One courtesy of Ronald Reagan.

Few Head of States are invited to address the United States Congress and fewer still are those invited to ride the US Presidential jet. Perhaps, the American people knew well what most of us never managed to know.

Why arroz caldo is on PAL’s menu

By Gil Carolino

In 1987, Malacañang appointed me to be a member of The Committee on State Visits of President Corazon C. Aquino. I was then with Philippine Airlines and this unexpected appointment gave me the distinct privilege of going with Tita Cory on all her trips abroad. She made only a handful, less than a dozen (nothing compared to the more than 50 and 30 trips of two Philippine presidents), but they were more than enough for me to know Tita Cory up close and personal.

Tita Cory never gave the PAL crew any problem. She never demanded anything as far as service was concerned, like asking for special and elaborate meals. The only thing that she asked to be served was arroz caldo which, after that, became a standard feature of PAL’s inflight meals.

Tita Cory was very pleasant with the crew and everyone on the plane, including the regular passengers whom Tita Cory sought so she could have even a short conversation with them inside the plane. Everyone was awed by Tita Cory’s simplicity and pure heart.

Lunch at Arlegui

I am neither a close family friend nor an official of her administration, yet, very early on during her presidency, Tita Cory invited me and my wife to have lunch one Sunday with her children (Noynoy and Kris were not there) at the Arlegui residence inside the Malacañang compound. There we saw a fine lady, not the President of the land, but the loving mother to Ballsy, Pinky and Viel and their spouses, and the very doting lola (grandmother) to her apos (grandchildren).

And, how could you not be forever grateful to Tita Cory if she showed genuine concern for your safety and welfare of your family?

A few weeks before the outbreak of the 1991 Gulf war, I was all packed up to be based in Dubai, UAE, to be PAL’s regional vice president/GM for the Middle East. As a matter of respect, I called up the Office of the President and told Tita Cory’s eldest daughter Ballsy to inform the President about it. Before I could even hang up, Tita Cory was already on the line and asked me, “O, gusto mo ba yan?” to which I answered in the affirmative. She might have felt differently because a few minutes after we talked, then PAL Chair and now Quezon City Mayor Sonny Belmonte called me to his office and told me, “O, tumawag si Tita Cory, ayaw ka niyang ma-assign don kasi may guerra daw don.”

Out of harm’s way

I could not describe my feelings. I was simply overwhelmed because, to me, it was unimaginable that the President of the Philippines, who had far more important things to attend to, would personally go out of her way to do that.

Napakahalaga ng buhay ng tao sa kanya. She showed it again when she, subsequently, directed PAL to operate special flights to evacuate her countrymen who had no way out as they were stranded in the region during that most critical period. Tita Cory personally followed up the developments and actual operations of the special flights
which, I thought, she could just have assigned to her Cabinet and staff to coordinate with PAL.

Tita Cory is gone. However, our spontaneous outpouring of grief and sadness is solid proof that we fully embrace the ideals and aspirations she wholeheartedly and endlessly fought for. Let us keep the fire brightly glowing until another Tita Cory comes, though I feel sad realizing the fact that that time will be beyond my lifetime.

PAL beefs up domestic operations despite job cut

By Darwin G. Amojelar
August 29, 2009

DESPITE the company’s plan to cut its workforce, Philippine Airlines (PAL) on Friday announced it will beef up its domestic operations with new routes and destinations.

In a statement, the Lucio Tan-owned company said it will introduce a new Cebu-Davao and Davao-Cebu service using the wide-body Airbus A330 starting September 1.

Its budget airline, PAL Express will add another daily Cebu-Iloilo-Cebu flight using the 76-seater Q400 turboprop aircraft.

Surigao and Naga are also being added to the PAL Express network with daily flights to Surigao and twice a day service to Naga.

Earlier, Jaime Bautista, PAL president and chief operating officer, said it would cut its workforce and flight capacity abroad to cope withJustify Full the global economic slowdown.

“We are currently reviewing our entire organizational set-up,” Bautista said, adding that the crisis has changed the face of the industry which is among the sectors hardest hit by the global crisis.

“We don’t know yet how many will be affected. For now, we don’t have a target. I talked to the union about the plan yesterday. In a few weeks, we will know how many will be affected,” he added.

At end-March, PAL had a workforce of 8,052. Of the total, 472 are pilots and 1,593 are cabin crew.

Bautista said the airline’s cost-cutting measures will not infringe on its safety compliance and standards.

PAL will reduce flight capacity to the US, Canada, Australia, Japan and Hong Kong, he said.

About 7 percent of the airline’s total capacity would be reduced effective this month until March 2010.

At end-March, PAL’s route network covered 29 points in the Philippines and 31 international destinations.

The company reported a net income of $35.5 million from April to June, down by $9.6 million over the same period last year.

Revenues dropped by 12 percent to $394 million compared with $446.9 million for the same period in 2008.

PAL blamed the lower revenues on the 25-percent decrease in passenger revenues of $95 million as passenger traffic and yields continued to decline.

For its fiscal year ending March, PAL posted a net loss of $301 million from a net profit of $30.6 million in the fiscal year ending March 2008.

The company’s total expenses for the first quarter amounted to $358.5 million, 11 percent better than the previous year’s $401.8 million. Fuel comprised 44 percent of its operating expenses.

PAL to axe 3,000 jobs!

Starting with airline subsidiary Air Philippines

August 28, 2009

Legacy carrier Philippine Airlines intends to slash more than a third of its 8,000-strong workforce, reduce its international flight frequencies, and outsource parts of the airline business to cope with a sharp decline in travel demand coupled with higher than expected operating cost despite registering modest net profit of $35 million for the first quarter of 2009, regarded as peak period for the airline, its president said on Thursday.

Jaime Bautista said its profit is expected to dissipate in the next 3 quarters as its yield continue to decline amidst dwindling traffic despite reporting lower fuel bills as recorded during the same period last year. PAL incurred a $301.4 million net loss for its 2008-2009 fiscal year ended March and Bautista said the carrier "will be happy" if it breaks even in the current fiscal year.

"But based on the results of operations for the first three months, traffic remains weak," he said. The airline reported lower yields particularly to its bread and butter destinations in the United States, Canada, and Australia.

To trim costs, Bautista said the airline is planning to transfer several operations to third parties and sell the remaining Boeing 737 they owned to raise some $8 million to $10 million.

"We are considering outsourcing the non-core business of PAL ... like catering, reservation, just like what other airlines are doing," he said saying further that they are one of few Asian carriers that still do their own catering and ground handling. The airline will likewise hold plane purchases except for Boeing 777-300ERs due for delivery this year.

PAL has reduced its total international flight frequencies by 7 percent and plans to cut further flight frequencies to the United States, Canada and Australia to match demand on said route.

Flights to Los Angeles are now down to seven per week from nine, San Francisco down to seven from eight per week, while Vancouver flights will have five per week from daily starting next month. Flights to Japan, Australia and Hong Kong will also be trimmed to reduce the cost of operations.

”We were really affected with the long haul, instead of the medium haul flights,” he stressed, adding that "the airline would rather add more domestic flights in several destinations because of higher traffic volume.” Bautista added.

Meanwhile, as the number of international passengers slipped by 8%, the airline's domestic passengers rose by 17% in the first quarter prompting the airline to upgrade service to some key destinations vacated by its subsidiary low cost airline Air Philippines, which decided to suspend flight operations effective September 1 as part of the organizations operational realignment plan. Air Philippines is managed by Philippine Airlines, and both airlines are owned by Lucio Tan, the second wealthiest man in the Philippines based on the Forbes magazine list.

For this reason, all flights of Air Philippines will be serviced either by PAL and PalExpress starting with daily flights from Manila to Iloilo and for Cebu-Davao and Davao-Cebu destinations that will also be added to PAL's domestic schedule using the wide-bodied Airbus A330 on a triangular route while Surigao will be serviced with Airbus 319 later. PALExpress will handle daily flight to the Cebu-Iloilo-Cebu sectors using the 76-seater Q400 turboprop aircraft and which will grow to twice daily before yearend, while twice-a-day service to Naga will be re-introduced on the Q400. Daily flights to Surigao will be temporarily service by PAL Express in the meantime.

Kalibo airport adds Taichung, Taiwan to its list

Mandarin Airlines sets more flights to Kalibo

August 28, 2009

More Taiwanese tourists are expected to visit the Philippines this year as Taiwanese carrier Mandarin Airlines is set to offer direct charter flights from Taichung to Kalibo starting on Oct. 16, one of several new charter flight offerings from Taiwanese carriers. The airline also flies to Kaohsiung in Taiwan.

Antonio I. Basilio, Manila Economic and Cultural Office (MECO) managing director and resident representative, said the new flights will benefit the Philippine travel and tourism industry as charter services are proving to be a driver for tourism growth.

Mandarin Airlines is not the only Taiwanese carrier that has introduced direct charter services to the Philippines top holiday destinations.

China Airlines (CAL), Taiwan’s No. 1 carrier, launched charter services to Cebu from Taipei and Kaohsiung last April and July respectively.

This month, CAL launched regular charter services to Kalibo. The carrier flies to Aklan from Taipei every Tuesday and Friday.

“These charter services are expected to bring in thousands of Taiwanese visitors to Boracay, one of the Philippines leading destinations. It’s a win-win for the community and the industry,” said Basilio.

Basilio said MECO in Taiwan is targeting four consumer segments for its tourism offerings: “Double income with no kids households, honeymooners, diving associations, and group tours.

“Although the honeymooners market may not be as big as the other market segments, it remains a potentially lucrative business for our industry suppliers and Taiwan’s destination management companies. This is a low-volume but high-yield market for us,” said Basilio.

MECO Tourism Center Representative Rene Reyes said that Taiwan’s double income no kids households or DINKS is another sub-segment that is driving the travel market.

“DINKS are comprised of young couples, usually between the ages of 30 and 40.They have both the means and the time to take overseas leisure breaks,” said Reyes who adds that Taiwan’s vibrant dive travel consumer market is another priority segment for the Philippines.

“There are about 400,000 licensed divers in Taiwan, not to mention the hundreds of other consumers who want to sign up for diving lessons. The Philippines is a good diving destination because of its mild tides. During the last quarter of the year and during the winter months, Taiwanese divers look for alternative diving sites. That’s an opportunity for us since the Philippines offers excellent year-round sites for divers,” said Reyes.

Package group tours remain the Philippines top market segment according to Reyes.

“This segment relies heavily on the quality, price and the popularity of the destination being marketed,” said Reyes. “Fortunately, our industry partners from tour operators and airlines to destination management companies “offer value-for-money products to Taiwan’s holiday travelers,” said Reyes.

Turbulence hits PAL

Reeling from losses, cuts flights, personnel

by Lenie Lectura
August 27, 2009

Philippine Airlines is taking drastic steps, such as laying off employees and reducing international flights to save on costs following the huge losses posted in fiscal year ending March and the lower earnings in the first quarter.

“Extraordinary times call for extraordinary measures,” said PAL president and chief operating officer Jaime J. Bautista in a statement.

When pressed for details, Bautista told the BusinessMirror in a phone interview, there will be a reduction in the airline’s flights to the US, Canada and Australia as well as seat capacity to Japan and Hong Kong destinations.

“We normally have a full-year lineup for our flights. Starting August up to March 2010, we will reduce the capacity by 7 percent. Our international destinations are not doing well. The fares are going down. We still fly even if the aircraft is not full. But our domestic routes will not be affected,” said Bautista.

Also, PAL’s union was already informed about the planned layoffs. Bautista said he could not yet say how many will be affected. “This is part of our rationalization program. We just talked to our people [on Wednesday]. For now, I still don’t have a target number of affected employees but we will have something in a few weeks,” added Bautista.

PAL also plans to outsource some of its operations including ground-handling services. “The union was also informed about this as well. Our arrangement with them is that we will be transparent. It is a bitter pill but all of these [efforts] will save PAL,” he said.

Early retirement packages for PAL employees are also being offered not only to reduce costs but to enhance productivity. “We are currently reviewing our entire organizational setup. We want to make PAL lean and mean so it will be agile and flexible enough to adapt to the new economic climate. Clearly, the crisis has changed the face of the airline industry which is among the sectors hardest hit by the recession,” Bautista said.

PAL shareholders approved a quasire organization plan, reducing the par value of PAL shares to P0.20 from P0.80 per share. It will also increase its authorized capital stock from P16 billion to P20 billion divided into 100 billion shares at P0.20 per share.

Bautista said the airline relies on the strength and backing of its principal shareholders, unlike state-owned airlines which enjoy support from their respective governments in times of crisis. “PAL must not always rely on its stockholders; it must do its part and look internally to overcome this new challenge,” he added.

PAL also reported paying $165.4 million in principal and interest to creditors, bringing to $2.4 billion the total paid from March 1999 to March 2009. Total assets decreased by $60.6 million to $1.971 billion, while total liabilities rose by $239.5 million.

Bautista said PAL will continue to realign capacity to match demand especially in the domestic front due to increasing traffic. However, this is tempered by the weakness in PAL’s long-haul sector particularly the US market where the sub-prime crisis began.

When the global crisis led to a travel slump in the latter part of last year, PAL’s passenger load factor fell to an average of 76.2 percent, three points lower than the previous year. The airline posted a $301.4-million loss for its fiscal year ended March 31. This prompted PAL to take decisive steps like rationalizing its workforce, realigning operations to match demand, among others.

Zest Air Opens Cebu and Zamboanga Hub

Expects 2 more A320 Delivery by October

August 25, 2009

Zest Airways. The airline is scheduled to receive 2 more brand new Airbus 320 and 3 additional MA-60 this year as initial part of the company's $150 million capital investment program.
Budget airline Zest Airways Inc. (Zest Air) announces the opening of Mactan-Cebu and Zamboanga hub this October as it recommence Visayas and Mindanao services as well as re-introduce flight to Sandakan.

The airline expects to receive its 6th MA-60 from Xian Corporation of China to serve the southern routes of Surigao and Siargao, and from Cebu hub with routes to Bacolod, Iloilo, Davao, Cagayan de Oro, and Zamboanga hub with onward connections to Sandakan.

Meanwhile Zest Air will start flight from Manila-Clark to Hong Kong in October 24 (September 21 originally) to formally make DMIA its hub for its international flight operations with Seoul, Shanghai, Singapore, Macau, and Bangkok to be added later when two more brand new A320 join the airline fleets in October. The opening of the Hong Kong route is a part of the airline’s expansion program to Southeast Asian regions after acquiring its third Airbus 320. It will have the airline operating 5 A320 by yearend.

The introductory one-way fare to Hong Kong is $70 USD inclusive of taxes and surcharges but exclusive of international charges and country travel tax.

"With our plans to expand our operation to the Southeast Asian region, it becomes necessary to grow our fleet size" says
Alfredo M. Yao, President and CEO of Zest Air.

Donald Dee, Zest Air chairman, however said that the new fleet acquisition would be serving new domestic destinations as well as existing trunkline routes in the meantime while it weathers the aviation slump in Asia-Pacific region.

Zest Air’s intends to fly Boeing 767-300 which will arrive next year to Kuwait and Abu Dhabi while its request is being processed for approval by Kuwaiti and Emirates governments. It is also applying for rights to fly to Australia also with the use of Boeing 767 slated for delivery next year which will culminate its $150 million investments.

Asiawide Airways controls Zest Airways of the Philippines which is a subsidiary company of AMY Holdings controlled by Alfredo Yao.

SEAIR Plane swerves off-runway at RPLL

Blames sudden Crosswind for incident!
August 24, 2009

Courtesy of GMANews.TV

An Aircraft of South East Asian Airline suffered landing glitch Sunday noon after it veered right off runway 13 while landing at Manila's Ninoy Aquino International Airport.

The 32 seater Dornier Do-328-100 with registration RP-C6328 was performing flight DG-024 from Caticlan to Manila when wind shear forced the plane to veered off course to the right and stopped on soft ground abeam taxiways N4/D3.

The plane carried 32 passengers and 3 crew. No injuries were reported. Passengers were subsequently brought to the domestic terminal by bus where medical examinations were taken to the passengers before they were cleared to go says Avelino Zapanta, president of Southeast Asian Airlines (SEAIR).

Seair said that the Do-328 had landed and slowed normally and was about to taxi off the runway, when it caught a sudden gust of wind causing it to veer off the runway ending up on soft ground.

Zapanta said he does not see the incident to affect the airline's business.

“It is a natural phenomenon. There was wind crossing. The aircraft is ok," he said.

Also known as wind gradient, a wind shear affects air speed during landing and taking off.

SEAIR’s Dornier 328 also suffered a heavy landing at Caticlan airport sometime in July this year causing its tire to burst on touchdown due to the same wind condition.

Tawi-Tawi airport runway upgrade completed

Prepares to Welcome Major Airlines!

August 21, 2009

The country's southernmost airport in Tawi-Tawi kicks into high gear Monday the 17th of August as it open its door to accommodate bigger aircraft on its runway.

The airport situated in Barangay Sanga Sanga to which it was named from has its runway upgraded and extended from 1,608 meters to 1,920 meters aimed to accommodate narrow-bodied jets such as Airbus 319 and Boeing 737's. Its landing strip was also widened from 18 to 30 meters sufficient to upgrade its aerodome classification to 3C.

The project cost was financed by the United States Agency for International Development (USAID) through its Growth with Equity (GEM) Program amounting to P100 million while the Philippine government chipped in P92.2 million as its counterpart.

US Ambassador Kristie A. Kenney graced the airport opening aimed to improve the province’s air links with the rest of the country, and should help strengthen the local economy.

"We are happy to be part of the development of this island province," said Kenney, who was the guest of honor on the inauguration of the extended runway.

Abdelnooh K. Hadjirul, president of the Tawi-Tawi Chamber of Commerce and Industry, said the airport upgrade will give Tawi-Tawi’s emerging aquaculture and eco-tourism industries a competitive advantage.

“There is great potential in eco-tourism here, especially if air links to neighboring countries are established,” said Abdelnooh Hajirul, president of the Tawi-Tawi Chamber of Commerce and Industry.

On the same tone, Undersecretary Virgilio Leyretana, Sr., chairman of the Mindanao Economic Development Council (MEDCo) is optimistic of its growth potential. Mr. Leyretana oversees the implementation of the GEM Program.

“These improvements will ensure safer airport operations and higher-capacity air linkages as well as open up more trade, tourism and investment opportunities in the region.” he said.

According to Carlos Canda Tan, GEM’s deputy program manager for infrastructure, the airport will also have new passenger terminal facilities soon and it will be equipped with baggage conveyors and x-ray machines for efficient, effective, convenient and reliable aircraft operations.

Meanwhile Philippine Airlines’ Flight Technical Division Manager Selino S. Jalalon has inspected the facilities at Sanga-Sanga airport to update flight plans and landing and take-off procedure of the airline when they start operating at the airport.

Jalalon said that they would fly the Bombardier Q300 to the airport on a thrice a week service should passenger traffic to the airport becomes economically viable considering that its still very thin today because of its peace and order situation, but entertained the idea of bigger aircraft when there would be demand for it mostly from domestic or foreign tourist. The airline is still evaluating traffic projections to determine what type of aircraft to be used in opening a route to Tawi-Tawi.

At the same time, Cebu Pacific manifested its intention to fly the route with its ATR 72-500 aircraft and possibly preempting PAL on a thrice a week service when new aircraft arrives to join their fleet. Lance Gokongwei, Cebu Pacific CEO, said that 2 ATR turbo prop planes are expected to join their fleet this year.

Cebu Pacific is preparing a hub in Zamboanga for services to Tawi-Tawi, Jolo, Cotabato, Cagayan de Oro, Sandakan, and Kota Kinabalu for connections to Cebu, Davao and Manila.

Zest Air which previously operated at the airport using YS-11 aircraft has also plans to re-introduce Zamboanga as its Mindanao hub for destinations such as Jolo, Tawi-Tawi, and Sandakan.

Presently, Seair is the only airline that serves Tawi-Tawi airport utilizing 19-seater LET plane.

Turkish Airlines lines up and wait for Manila departure

20 August 2009

ISTANBUL, Aug 20 - Flag carrier Turkish Airlines (THY) is lining up and waiting for the approval of the Air Service Agreement between Turkey and the Philippines this year as it announces plans to introduce new destinations in the far east.

"We are definitely flying to the Philippines next year" says CEO Temel Kotil. "This month we already started flying five times a week to Jakarta via Singapore, and hopefully we can arrange a deal with the Philippines for rights to Thailand" he said, as the airline intend to service Istanbul-Manila via Bangkok at the initial stage of their operations. "We probably fly direct if got no choice." he added.

The airline which is Europe's fourth-biggest airline in terms of passengers carried, is expanding its fleet, especially long-haul wide-body aircraft, and aims to increase its European market share by one-fifth to 10 percent next year. It is aggressively pursuing the transit passenger traffic by transforming Istanbul to become a major hub between Europe and Asia in competition with gulf-based carriers.

At present, Turkish Airlines serves points in Thailand, Singapore, South Korea, Hong Kong, Beijing, Shanghai and lately Jakarta. It plans to resume service to Kuala Lumpur together with new services to China, the Philippines and Vietnam. It has also plans to make Bangkok its Asian hub for flights to Australia by 2011.

Kotil added that the carrier intends to double its frequency in Asia within the next two years, starting with Tokyo Narita from four-weekly flights to daily operations, to Bangkok which will have an equipment upgrade to double daily triple seven in December 2009, with 4 flights extension probably to Saigon while the additional 3 flights intended as flight extension either to Manila or Guangzhou, depending on the services agreement that will be discussed later between the Philippines.

As a back up plan in case the Philippines would not agree to open up Bangkok, the airline intends to fly the Airbus 330-200 which will join the fleet in February and April next year to fly straight from Istanbul. The actual launch date was not however disclosed.

Turkish Airlines this week confirmed the contract for the purchase of additional seven Airbus A330-300 aircraft that was signed in Paris during Le Bourget Airshow in June 2009. The aircraft that is due for delivery from September 2010 will be powered by Rolls Royce engines and will carry 289 passengers in a two-class configuration.

Meanwhile, its Boeing order for seven extended range 777-300s worth $1.9 billion at list prices was finalize last July that adds to an order for five 777-300ERs placed in April this year or a total of 12 triple seven orders. Its delivery date starts from October 2010. The airline currently operates a fleet of 65 Boeing planes.

The airline publicly disclosed that passenger numbers increased to 9.7 percent in the first seven months of 2009 to 13.7 million, reflecting ambitions to grab market share from European rivals.

"Despite many problems in the industry, we grew at 9 per cent in the first half in terms of passenger numbers both domestic and foreign. However, our yields dropped due to lower demand from premium passengers," Kotil said.

Turkish Airlines flew 21.3 billion RPKs during the first seven months of 2009, up 12.4% over the year-ago period. Capacity rose 19.7% to 30.6 billion ASKs and load factor fell 4.5 points to 69.5% as the company increased capacity.

Its financial results for 2008 reported a net profit of US$874 million, up a strong 26% compared to 2007 figures. Gross Revenue was also up to US$4.719 billion, with proceeds from international traffic accounting for 78% of total revenue, while 22% was from domestic traffic. Shares in the state-run carrier also rose 3 percent to 2.72 lira as of this date.

Dr Kotil credited the company’s very careful oil-price hedging policy as one of the reasons why it was able to grow its 2008 net profit by 328% to USD874 million while other heavy weight world airliners slump.

Afriqiyah Airways to arrive Manila September 19

Attributes Financing Glitch for Delay.

August 18, 2009

Photo: Captain Sabri Shadi, CEO of LAA Holdings, during the delivery ceremony of the A330.

Tripoli- Aircraft Financing glitches caused Afriqiyah Airways delayed maiden flight to the Philippines which was announced to arrive in July 17, 2009, but was re-scheduled back to its original arrival date.

Captain Sabri Shadi, CEO of Libyan-African Aviation Holding, the Company that controls Afriqiyah Airways, said that they just received its first Airbus 330-200 on August 10 after funding assistance from government banks which agreed to finance three (3) out of the six (6) aircraft orders.

Shadi said that they encountered finding funding for its twenty three (23) aircraft orders which resulted to delivery deferrals. He said that at first, Libyan Banks were reluctant to finance their massive orders until they agreed to scale it down thereby reducing orders to only three 330's.

"This is the first kind of this aircraft to be delivered to Afriqiyah Airways. We ordered three of them and we will receive the second one sometime in September and the third one will be delivered at the end of October. We will also receive other three (3) A319, smaller than the A330 on the18th of August," said Eng. Rammah Ettir, Afriqiyah Airways' Chief Executive Officer.

The new A330 will seat 230 passengers in a two-class cabin and will serve long-haul operations on routes from Tripoli to Africa and Europe and later on to the Far East of Asia.

The first A330 will start serving London, Paris, Lagos and Accra within the next six week. It will then fly to Johannesburg and Cape Town on the 4th of Sept 2009 while its second A330 will fly on September 19 to Manila and the third A330 to Beijing on October 28.

"Afriqiyah Airways has achieved impressive growth since it first entered the market in 2001, and we are very proud to have been their partner during this time, " said John Leahy, Airbus Chief Operating Officer.

"The A330 has unbeatable economic efficiency and will enable Afriqiyah’s continued expansion. We look forward to continuing our partnership.” said Mr. Leahy at the handing over ceremony of the aircraft at the premises of Maitiga Airport.

Afriqiyah Airways delivery of its first Airbus A330 is considered a milestone in the history of Libya's aviation since it is the first large aircraft of its kind to be delivered in Libya. It is also a major step forward of the company's long haul operations after its establishment in 2001.

Cebu Pacific Revenues Up

First-half profit soars to $321 Million

August 18, 2009

Philippine low cost carrier Cebu Pacific has reported its first-half profit of $321 million, up 21% than 2008 figures according to the disclosures of its holding firm JG Summit.

JG Summit Holdings said Cebu Pacific’s gross revenue jumped 21.3 percent to P11.39 billion as a result of its additional flight frequencies and opening of new route destinations as a result of its extensive expansion program.

Cebu Pacific Chief Executive Officer Lance Gokongwei said the airline expects delivery of 2 new airbus 320 and 2 ATR aircraft his year to support its domestic expansion which already carried 4.3 million passengers in the first half of the year. He said that they are expecting a full-year target of nine million passengers this year but challenges remained in the second half most notably due to increase competition by other low cost operators in the country.

Cebu Pacific operating expenses also increased because of new aircraft joining its fleet to P9.28 billion($193 million) from P8.19 billion a year earlier. It however incurred foreign exchange losses of P223.38 million, but is 77 percent lower than last year’s P958.72 million figures.

Its biggest break came from fuel hedging gains of P471.43 million against P77.11 million last year.

“All these factors contributed to the turnaround in the airline’s bottom line, from a net loss of P15.66 million last year to a net income of P1.82 billion this year,”Gokongwei added.

SMA prepares maiden flight to Taipei

Spirit of Manila unveils its new aircraft at Clark


August 18, 2009

CLARK FREEPORT, Pampanga – Spirit of Manila Airlines unveiled last Friday its new MD-83 aircraft at the Diosdado Macapagal International Airport (DMIA) here.

Clark International Airport Corp. (CIAC) President and CEO Victor Jose I. Luciano said that more Spirit of Manila airplanes, which include an MD-83, Boeing 747-300, and 747-400 will be arriving in September and November to complete the airline’s fleet in time for its operations in December, this year. The MD-83 aircraft arrived at DMIA last Aug. 1.

The aircraft is expected to fly to Taiwan and Macau and in the Middle East via Qatar, Dubai, Baharain, and Kuwait to serve the transport needs of Overseas Filipino Workers (OFWs), many of them coming from Central and Northern Luzon.

“This will benefit our OFWs working in the Middle East, most of whom are from the Central and Northern Luzon, and will also attract more tourists to visit our country using DMIA,” Luciano said.

Luciano led other officials who included Transportation and Communication Secretary Leandro Mendoza, Spirit of Manila Chairman Basilio Reyes, President and CEO Jimmy Matibag, and Vice President Rene Ocampo, and foreign partner Vice Chairman Hamad Altani in the unveiling event.

Spirit of Manila Airlines is the first large local carrier that will base its operations in Clark, and its airplanes will start flying out of DMIA very soon, he said.

Luciano said the MD-83 aircraft would be used for the Clark-Taiwan flights. “There wiil be no flight between Taiwan and Clark, and this is the right time that we will now have flights to Taiwan.”

“This is the first time, and even former President Fidel Ramos has been proposing Clark-Taiwan flights,” Luciano said.

PAF Choppers hit by enemy fire

Marine General almost have it!
August 17, 2009

Zamboanga City - The Armed Forces of the Philippines (AFP) almost lost a General Sunday when the Huey transport helicopter that carried the officer together with NBN TV crew was hit by enemy fire while flying low over the vicinity of Tipo-Tipo in Basilan, the site of bloody encounters with terrorist forces that resulted in heavy government casualties last week.

Suspected al-Qaeda-linked militants fired at two low-flying military helicopters wounding two journalists and a government photographer, regional military commander Maj. Gen. Benjamin Dolorfino said while the chopper was on its way back to Zamboanga City.

The two UH-1H Huey helicopters made an emergency landing in Barangay Tumawas, Lamitan City on Basilan Island.

However, Lt. Col. Romeo Brawner, Jr., Armed Forces of the Philippines public affairs office chief said that Marine Brigade commander, Brig. Gen. Rustico Guerrero was no longer aboard any of the helicopters when it was hit by enemy fire at 10AM.

The passengers of the two helicopters were immediately secured by government troops and civilian volunteer groups upon landing.

Malacañang cancels plan to purchase P1.2-B jet

Presidential jet to be bought by the next President!

August 17, 2009

Press Secretary Cerge Remonde announced yesterday that President Gloria Macapagal Arroyo wants to end the furor over her travel expenses by ordering the cancellation of the planned purchase of a presidential jet that would have cost the government at least P1.2 billion.

“I’m formally announcing that the President has ordered the cancellation of the purchase of the presidential jet. This is the second time that the President has ordered its cancellation even if this has long been recommended by the Presidential Airlift Wing several times,” says Remonde.

“She ordered the cancellation because she doesn’t want her critics to say that she’s prioritizing her own needs,” he added. But actually the new executive jet would not have just benefited Arroyo but also her successors, ensuring their safety and minimizing costs during local and foreign travels, Remonde said.

The Office of the President's (OP) prepared advertisement in the National Papers Thursday last week inviting bids to supply a brand new twin jet with VIP cabin configuration with budget of $25 million.

Had the offer pushed through, the most likely candidate for the Executive jet could have been the Legacy 600 jet manufactured by Embraer of Brazil says its local agent in Manila.

The Embraer jet has been offered to the President for her consideration when she visited Brazil in June this year which then became the basis of the bid proposal.

The Legacy 600 jet which was launch in 2000 carry 16 passengers and has a range of 3250 nautical miles which can easily reach Seoul, Tokyo and Sydney on a single journey and one refueling stop to reach the US west coast, the same specifications intended by the Office of the President. The jet is $5 million cheaper than its nearest comparable competitor aircraft manufactured by Bombardier of Canada.

Arroyo wants $25 million jet for Presidency

'Focus on repair of C130s, not jet' says Biazon

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BAGUIO CITY , Philippines – Malacañang has lost its sense of priority in purchasing an executive jet for the president, Sen. Rodolfo Biazon said yesterday.

Instead of buying an expensive private jet for the president, Malacañang should prioritize the upkeep of the Air Force’s remaining three C130s that badly need repair and upgrade, he said.

Biazon, a former Armed Forces chief, said the mobility of the military should be the priority of the government.

“And besides, the president doesn’t need a jet… the Philippines is so small,” Biazon said.

Malacañang justified its move to buy a brand-new presidential jet worth P1.2 billion, saying it would also benefit President Arroyo’s successors and greatly reduce security risks and other dangers when the nation’s leaders use aging planes or charter aircraft.

President Arroyo either takes a commercial flight or charters a flight when going on foreign trips. For domestic trips or visits to nearby countries, Malacañang leases private jets.

The last presidential aircraft was an aging Fokker F-28 jet used by former Presidents Fidel Ramos, occasionally by Joseph Estrada, and a few times by Mrs. Arroyo at the start of her administration in 2001.

An older presidential aircraft was the Fokker F-27, which was propeller-driven.

In the later part of the Ramos administration, the same aircraft was used to ferry journalists or Palace officials. It is no longer in use as it is considered dangerous to fly.

Mrs. Arroyo earlier donated two of the presidential helicopters to the Air Force.

The Office of the President earlier published a notice of biddings for a “presidential fixed-wing executive jet” that must be factory new, with two turbo-fan engines pressurized and equipped with avionics and instruments that are prescribed and compliant with the standards of the Federal Aviation Administration and International Civil Aviation Organization.

The aircraft is set for delivery at the end of the year following the bidding process that starts this month.


Arroyo's Foreign Travel cost $56 Million

The trips could have bought her an Airbus 319

August 15, 2009

According to the Commission on Audit (COA), President Gloria Macapagal-Arroyo has racked up P2.7 billion ($56 million at current exchange rates) in expenses for her foreign trips beginning 2003, or more than double the P1.1-billion limit set by Congress from 2003 to 2008.

COA Assistant Commissioner Carmela Perez in a Congressional Hearing at August 12 said that the President’s foreign travels cost P332 million in 2003 (from a budget of P72 million), P256 million in 2004 (from P74 million), P325 million in 2005 (from P209 million), P421 million in 2006 (from P261 million), P656 million in 2007 (from P261 million) and P722 million in 2008 (from P244 million).

Bukidnon Rep. Teofisto Guingona III was reported by the inquirer to have said that there was an effort to mislead the public by keeping the President’s official foreign travel budget relatively low and using her office’s contingency fund to fill up for any shortfall in funding.

“There is a pattern here. She is hiding her travel expenses in her contingency funds, like she is preventing the public from seeing [the real picture]. There is a violation against transparency and honesty. It leaves a bad taste in the mouth,” the lawmaker said.

He said the contingency fund was allotted for emergency purposes but Ms Arroyo had been using it exclusively to bankroll her foreign trips.

COA records also showed that the President spent some P1.44 billion on her foreign travels from 2002 to 2007.

The breakdown of the foreign travels is listed as “Traveling Expense-Foreign” under the Office of the President’s Maintenance and Other Operating Expenses (MOOE) and showed how Ms Arroyo’s travel expenses swelled every year:



Year Budget Actual
2003 P72 M P332 M

2004 P74 M P256 M

2005 P209 M P325 M

2006 P261 M P421 M

2007 P261 M P656 M

2008 P244 M P722 M

Total P1.121 B P2.712 B

But for all that, the President is not about to stay put.

Gary Olivar, Ms Arroyo’s spokesperson on economic matters, Friday told reporters that she had not overshot her budget for foreign trips and had “budget room” to go abroad in the 10 remaining months of her term.

“Well, the DBM (Department of Budget and Management) numbers tell us that there’s still budget room for her to continue to travel because she has not exceeded her budget,” Olivar said when asked at a briefing if Ms Arroyo would cut down on trips.

He added: “It all depends on the benefits we’re looking for whenever she travels.”

Quoting the DBM, Olivar said that in 2008, the Office of the President spent some P233.8 million on local and foreign trips out of the P244.6 million allotted in the 2008 national budget.

DBM figures on her trips from 2001 to 2007 were not available.

Olivar argued that if ever the Office of the President exceeded its budget for foreign trips, this was allowed under Section 62 of the General Appropriations Act for 2008.

Section 62 states that agencies may augment any item of expenditure within the MOOE from savings in other MOOE items without DBM approval.

“There’s budget flexibility. Provided she can find savings in other parts of the budget to fund more trips, then that is allowed,” Olivar said.

Besides, no one can put a price tag on the pledges of investments, potential employment for workers and stay of executions of overseas Filipino workers that are gained from such trips, he said.

PAL Reports $35 Million Profit for Q1

But Revenues dropped by 12%

15 August 2009

Manila - Philippine Airlines reported yesterday that its net profit for the first quarter of fiscal year 2009 fell 21.29% or more than a fifth it earned in the same period last year equivalent to $35.5 million.

The airline cited decreasing yields and dwindling international passenger traffic which account to almost 78% of its revenue generation. The cause of its revenue shortfall is attributed to global recession affecting legacy airlines worldwide and travel fears over the swine influenza outbreak.

The low yield is attributed to the airline's decision to cut fare prices to international destinations to stimulate travel demand and consequently earned its way as one of few world airliners to register profit during the period. International Air Transport Association (IATA) has already projected that the combined losses of all member-airlines for the year would reach $9 billion. Meanwhile, its domestic operations enjoyed double digit growth amidst global uncertainty.

PAL said total revenues for the quarter dropped by 12% to $394 million against the 2008 level of $446.9 million. The airline's expenses was relatively lower by 11% to $358.5 million mainly due to lower fuel prices.

Meanwhile, PAL took delivery of its third reconfigured B747-400 aircraft equipped with enhanced cabin amenities that include Recaro "lie-flat" Business Class seats and modern inflight entertainment systems. It seeks to complete the reconfiguration of all its B747 this year.

The airline operates a mix fleet of 48 Boeing and Airbus aircraft for domestic and international destinations.

PAL to Introduce Europe flight by 2010

Eyes London next Summer!

15 August 2009

- Philippine Airlines (PR Holdings, PSE) has filed with the UK's Department for Transport (DfT) an application for an operating permit to fly regular scheduled flight between London Heathrow Airport and Manila International Airport, Dft said over the weekend.

The airline which last flown in 1998 is returning to Heathrow on the same weekly frequency it previously operates almost 12 years ago. The application states that the airline will fly using the Boeing 777-300ERs' on the route on a thrice a week service initially commencing summer of next year says International Aviation and Safety Division (IASD) of DfT. No further information was disclosed.

Airport Co-ordination Ltd. (ACL) which also received PAL's application for airport slot categorise its status as "new entrant" says Peter Morrisroe, Managing Director of Airport Coordination. He further confirmed that the time schedule for the airline has not been fixed yet as its requested landing and take off slots at London Heathrow is still being evaluated by ACL. Its docking point was however confirmed at Terminal 3. Request for additional information was denied.

Financial services firm Deloitte & Touche valued a peak-time Heathrow slot at an all-time high of £25 million in 2008 but the recession forced the numbers to settle around £10-15 million in 2009.

ACL is the regulatory authority responsible for slot allocation and schedule facilitation at Europe's busiest airport. According to ACL, an airport slot is the scheduled time of arrival or departure available or allocated to an aircraft movement on a specified date at an airport as allocated by them.

The United Kingdom and the Philippines recently amended its Air Service Agreement in July 9, 2009 expanding the frequency to 14 flights per week between the two countries, inclusive of daily flights between the two capitals.

Virgin Atlantic does not fly to Manila while British Airways ceased flight operations in 2000. There is no indication that the two British carriers will fly the route in the immediate future thereby making Philippine Airlines as the only operator for the route.

There are more than 200,000 registered Filipino migrants in Britain in 2008 based on the figures released by the Home Office.

Domestic pasengers at 7.5 Million on first half of 2009

Fueled by Aggressive Airline Pricing Strategy

11 August 2009

The Philippine domestic passenger air traffic rose 31 percent in the first six months of the year to almost 7.6 million compared to almost 5.8 million recorded in the same period a year ago. The phenomenal growth in its domestic traffic have been attributed to the airlines’ aggressive pricing strategies. The total load factor or the number of seats occupied during a flight rose to 76 percent in the first quarter from 75.6 percent in the same period last year.

Cargo traffic is however down 1.08%, from a total of 60,275,261 kilograms (kg) that were recorded in the first half of 2009 as against 65,185,354 kg reported in the same period last year. Of the number, Cebu Pacific transported 31,620,955 kg; PAL, 27,231,331 kg; Pacific East Asia Cargo, 815,096 kg; Air Philippines, 407,100 kg; and Seair 200,779 kg.

As of June 2009
Cebu Pacific
Philippine Airlines
Air Philippines
Zest Airways

Source: Civil Aeronautics Board

Yes, Love can stop a plane from flying!

August 9, 2009

Davao City
- For Davao International Airport, it was a regular Friday night of operations as PR flight 822 prepares to depart for Manila at 10PM, the airlines last flight. For the Airbus 320 Pilot Captain De Guzman, it was a routine red eye flight check for a 90 minutes flight. But for Dubur Mollik, a 21 year old Bangladeshi national, it was his only chance to reconcile with the love of his life.

In a similar scenario to the last episode of Friends, the television series of Warner Brothers, It was a long night for Dubur as he endure finding sense to know what love is and when he finally manage to find his heart he stood up and begged the flight attendants to get-off the plane. He was talking to somebody on the phone but definitely it was no Regina Phalange (Phoebe Buffay's alter ego), or because there's no left phalange on the plane.

But the boarding gates was already closed by tired agents and the pilot was already preparing his final check for take-off as he planned to be home by midnight, while the groundcrews tow the aircraft away from its stand hoping to call it a day.

Finding futility to his request to deplane, Dubur started to cry. “He was crying and begging the crew to allow him to get off the plane,” says Superintendent Elias Abad, chief of the Aviation Security Group (ASG), quoting stories from the flight captain, the crew and several passengers.

Knowing love himself, the Pilot finally agreed to grant his wish after failing to appease Dubur, but the long delay started apprehensions on other passengers that they too started disembarking the plane.

“Many got mad and argued with the captain about his decision,” said Marj Reyes, one of the passengers.

As a security precaution, the foreigner's luggage had to be removed from the aircraft and the Aviation Security Group had to run a security check once more.

As it turned out, Dufur has a lover's quarrel with his Filipino girlfriend who were vacationing in Davao. He decided to leave ahead of their August 28 flight for Kuwait where they both work. Dufur was already on the plane when he suddenly realized that he could not possibly leave without the woman he loves so he begged the crew to allow him to get off the plane.

The girl was called and the two lovers were reunited at the ASG office a few hours later said Superintendent Abad whom he spoke with and the Filipino girlfriend assured him that Dufur Mollik is a good person.

He told the couple not to fight anymore and to see him in his office before their scheduled flight on August 28. “I just want to make sure they’re together when they leave and the incident will not be repeated,” Abad said in jest.

Asked if the foreigner faced any charges, Abad said Mollik did not commit any crime so he was free to go after the investigation.

Abad said he asked PAL if it was filing a civil case against Mollik for economic loss because only half of the original passengers decided to push through with their flight, "but they too decided not to file any case."

"Who says this can only happen in the movies?" Abad Added. --- with reports from Dennis Jay Santos.

PAL raising capital to P20B

by Jenniffer B. Austria

Philippine Airlines Inc., owned by tobacco magnate Lucio Tan, is increasing its authorized capital stock to P20 billion from P16 billion after posting a huge loss last year.

“[PAL] is currently exploring various options to raise additional capital to help improve its equity position after the loss incurred in the fiscal year 2008-2009. By increasing the authorized capital stock, the company will have additional shares available for future investors,” PAL said in a filing with the Securities and Exchange Commission.

PAL has an authorized capital stock of P16 billion divided into 20 billion common shares with a par value of P0.80 a share.

PAL plans to reduce the par value of the shares from P0.80 to P0.20 and later increase its authorized capital stock to P20 billion, divided into 100 billion common shares at par value of P0.20 a share.

The airline firm has not finalized the number of common shares to be offered to potential investors.

PAL reported a net loss of $301 million in fiscal year ending March, a reversal from a profit of $30.6 million in the previous year.

Revenue rose 8.7 percent to $1.6 billion on higher passenger sales.

Expenses, however, jumped 23.4 percent, or $361 million, due to higher fuel cost.

“The rise in fuel cost by 77.7 percent over the last year’s figure of $470 million was a result of an increase in the average fuel price per barrel of $89 in 2008 to $123 million in 2009,” PAL said.

The flag carrier launched several initiatives to counter the impact of high energy prices, including the creation of a fuel conservation watchdog within the company, and reduced the free baggage allowance on trans-Pacific routes.

PAL is a subsidiary of PAL Holdings Inc., a listed company.

The flag carrier flies to the most popular domestic airline routes and to international and regional points that are either mostly visited by Filipinos or a good source of visitors to the Philippines.

PAL’s route network covered 29 points in the Philippines and 31 international destinations, including Guam, Honolulu, Las Vegas, Los Angeles, San Francisco, Vancouver, Melbourne, Sydney, Fukuoka, Nagoya, Osaka, Tokyo, Pusan, Seoul, Hong Kong, Macau, Beijing, Shanghai, Xiamen, Taipei, Bangkok, Saigon, Singapore and Jakarta.

Mindanao Airport upgrade completed by yearend

By Darwin T. Wee

ZAMBOANGA CITY — Rehabilitation of the three main airports in Zamboanga Peninsula is expected to be completed at the end of the year, the Mindanao Economic Development Council (MEDCo) has said.

This city’s international airport, along with those in Dipolog City in Zamboanga del Norte and in Pagadian City in Zamboanga del Sur, will soon be equipped with modern facilities, MEDCo chairman Virgilio L. Leyretana, Sr., said in a phone interview late last week.

Rehabilitation of the region’s airports will provide Zamboanga Peninsula greater accessibility and connectivity with the rest of the country.

"This will enhance the movement of people and goods at reduced costs," Mr. Leyretana said.

Data from MEDCo showed the rehabilitation of the three airports will cost over P1.4 billion.

The projects involve concreting, extending and widening the airports’ existing runways and aprons; construction of new flight service stations and powerhouse buildings; construction of new administration buildings; and construction of perimeter fences.

The Pagadian City Airport, which has suspended its operation in the past three years due to a defective runway, is expected to be operational in December, Mayor Samuel S. Co claimed.

Erlinda Delos Reyes, Dipolog City Airport manager, said five of the 10 projects in her facility are now completed.

One project is ongoing while the remaining four projects are still in the preconstruction stage.

The ongoing project covers the extension of runway, construction of perimeter fence and continuation of shore protection.

"The completion of this infrastructure will significantly improve tourism in the province and will make tourist destinations more accessible," said Allan Ranillo, chairman of the Zamboanga del Norte Regional Tourism Council.

Outside of Zamboanga Peninsula airports, those in the island provinces of Sulu and Tawi-Tawi — also in western portion of Mindanao — are expected to be fully operational next month.

The projects are partially funded by the United States-funded Growth with Equity in Mindanao (GEM).

The P230-million worth Jolo airport had its runway extended from 1,200 meters to about 1,845 meters, while the P200-million Sanga-Sanga (Bongao) Airport will have a 1,900-meter runway from the previous 1,600 meters, said Manuel T. Jamonir, infrastructure specialist of GEM.

Aside from the expansion and widening of the existing runways, the Sulu and Tawi-Tawi airport improvement projects include the rehabilitation of passenger terminal facilities that will be equipped with baggage conveyors and x-ray machines.

MEDCo said other airports in Mindanao that are expected to be finished within 2010 are those in the cities of Ozamiz costing P215 million; Cotabato, P327 million; Butuan, P592 million; and Surigao, P197 million. Only the P7.8-billion Laguindingan airport in Misamis Oriental will be completed beyond 2010.

NEW PAGADIAN AIRPORT. Two years after their last flight from this airport, locals of Pagadian city and Zamboanga del Sur expect to have an upgraded airport by December 2009, with operations targeted to commence in September. As of the latest Mindanao Super Region Monitoring Report of MEDCo, about 94.9 percent of the Php379.46 million airport upgrading project has already been implemented. Also shown here (inset) is a photo of an unfinished portion of the runway extension component taken last May.

Zest Air eyes DMIA as hub for int’l flights

August 3, 2009

Budget airline Zest Airways Inc. (Zest Air) intends to make the Diosdado Macapagal International Airport (DMIA) in Clark its hub for its international flights starting September this year.

Victor Jose I. Luciano, president and CEO of the Clark International Airport Corp. said that Zest Air will start its commercial flights in DMIA in September this year.

At present, Zest Air’s domestic flights are based at the old domestic airport in Manila except for one flight in Clark for Caticlan.

The airline also plans to mount flights to Hong Kong, Incheon in South Korea, Macau, Xiamen and Shanghai in China and Bangkok in Thailand.

Zest Air’s application for rights to fly the Middle East, particularly Kuwait and UAE is pending approval by foreign governments while its request to fly to Australia is currently applied following new bilateral agreement between Australia and the Philippines.

Zest Air would be able to mount international flights with the starting delivery of two brand new Airbus 320 in October this year.

This is in addition to the first A-320 it purchased earlier. The company is also buying 2 Boeing 767-300 aircraft to bring its total fleet to 11 aircraft by yearend, flying to major tourist destinations in the country.

This is part of the $150 million second wave of capital expansion. Last year, the company invested $170 million.

At present, Zest Air flies to Caticlan, Busuanga, Calbayog, Catarman, Marinduque, San Jose and Virac from Manila. It started flying new routes to Iloilo, Legaspi, Naga, Puerto Princesa, Davao, Kalibo, Tacloban and Tagbilaran.

The Zest-O group of companies, owned by businessman Alfredo Yao, acquired Asian Spirit, a small airline company based in the Philippines last year, and is carrying out an aggressive expansion program amid worldwide economic downturn. (BCM)

Canada's new visa rule contradicts flight policy

As it denies additional Entitlement to Philippine Airlines

August 2, 2009

Vancouver- Canada recently lifted the transit visa with the hope of attracting new carriers and travelers to consider Canada's struggling airports adversely hit by global recession. Already, passenger traffic at Vancouver airport is down by 14.6%.

Nationals from the Philippines, Indonesia, Thailand and Taiwan traveling with Philippine Airlines, China Airlines and Cathay Pacific Airways were made eligible to participate on the exemption program.

Foreign travelers going through Vancouver International Airport en route to or from the U.S. will no longer need a Canadian transit visa, according to a government announcement this week.

"Removing the requirement for a Canadian transit visa will make Canadian airports more attractive for international travelers going to and from the United States," Immigration Minister Jason Kenney says. "This will help airports expand their business, which will in turn have a positive impact on the local economy."

However, Its new policy of enticing airlines to consider Canada as Transit point contradicts its close door policy on opening more its skies to Asian Carriers particularly Philippine Airlines which announced reduction of flights to the western gateway due to disagreements with lease payments on the use of Air Canada's entitlement.

Canada does not have an Open Skies agreement with any Asian country. Virtually all of the Canada‘s bilateral agreements with Asian countries are restrictive, limiting which airlines should be allowed to serve particular airport pairs, how many flights should be allowed and how airfares should be regulated.

Philippine Airlines was granted additional landing rights by the Canadian government at Vancouver airport in May 30, 2008 equivalent to only 6 days a week from the previous entitlement of 4 times a week. According to the Ministry of Transport, the new ASA will provide greater market access options for airlines from both countries but so far remains restrictive.

“We have been asking the Philippine government to negotiate with Canadian government for an additional entitlement of fourteen times a week since 2005 but only two were given to us” Jaime Bautista, PAL president said.

PAL currently flies to and from Canada with seven entitlements as it borrows one flight from Air Canada, which is not utilizing its entitlements. It flies to Vancouver daily while four flights has connections to Las Vegas in the United States. However, the borrowed entitlement will end this October.

Bautista said the additional flight entitlements should allow PAL to revive its operation in Chicago and New York on a four-three split while the other three will go to San Diego, California. But since they are not permitted by the DOT to introduced new route while the FAA downgrade is in effect they are constrained to stop at Vancouver.

ACA's current dispute with PAL appears to anchor on its use of the triple seven in November that is bigger than the current A340-300 which accommodates 264 seats. Apparently, ACA is negotiating for more from what PAL is presently paying for the right to use the B777 which seats 350.

Air Canada's objection to Philippine Airlines expansion in Vancouver is very well founded.
While ACA only flies to Hong-Kong, its restraint is benefiting the airline from the current capacity shortage situation on the direct flight to Manila because they route many of Air Canada passengers to/from Manila either via Seoul with its code-share partner airline Asiana, which in turn is using the B747 on the route to the Philippines as compared to Korean and Philippine Airlines A330 service, or Hong-Kong on Cathay Pacific where they have interline agreement.

The 2008 Air Services Agreement with the Philippines list seat capacity as one of the negotiating points in the Confidential Annexes and changing capacity will definitely mixed up things from the present set-up says an Air Canada employee who does not want to be identified. According to the Ministry of Transport, PAL was hoping to fly to Canada twice daily in 2010.

Meanwhile, Canada's Ministry of Transport Policy Report on Bilateral Air Services Agreement in Asia-Pacific Region which was submitted in December 2008, suggest that Canada‘s current bilateral ASA's "do not serve the economic interest of Canada by imposing constraints on the growth of Canada‘s trade, investment, tourism, logistics, education and other related industries as well as constraining growth opportunities for the air transport sector itself."

"This economic costs imposed by the restrictive bilateral ASAs are especially high in British Columbia, where the economy depends heavily on trade, investment, tourism and the export of education services to Asian countries".

Analysis on Open Sky policy with the Philippines translates in the long run with a 24% reduction in fare and 39% increase of passenger volume within one year according to the report. Its flag carrier which has 6 triple seven on order has been very vocal to make Vancouver its hub in North America as it intends to open connecting routes to San Diego, New York and Chicago soon.

With the Canadian government re-considering open skies agreement with China, South Korea and the Philippines in 2010 leading to the Vancouver Winter Olympic games, PAL's expansion plan to North America remains to be seen as it announces further deferral on the delivery of its four long haul aircraft in 2013.

The Philippines have a significant economic and social ties to British Columbia. The total trade between Canada and Philippines reached $1.2 billion in 2007 ($458 million export and $765.7 million import). 30% of Canada‘s export to Philippines goes through BC. There has been steady increase in the number of travelers from Philippines to BC over the last decade reaching 35,883 in 2006.

The bulk of PAL's flights from the Philippines to Canada are booked by overseas Filipino workers. There are 80,000 Filipinos living in Vancouver. The load factor for the flights has been over 90 percent despite the global recession. Air Canada does not have any immediate plan to use its flight entitlements to open direct flights to Manila due to the shortage of long-haul aircraft.