PAL's Mumbai dilemma

No more slots from Bangkok

February 28, 2010

Manila - Flag carrier Philippine Airlines wants to resume its flights to Mumbai, India's largest City. But the airline intends to use Southeast Asia's biggest airport, Bangkok, to make its Indian extension a profitable endeavor. It was a strategy it employed in 1946 on its way to Middle East and Europe.

The carrier stopped flying Bangkok-Mumbai in 1956. As the Manila-Bangkok-Mumbai route becomes a lucrative business again for the airline with the influx of Indian tourists flying to Manila, Cebu and Bohol, PAL wants to have Suvarnabhumi airport as their gateway too.

“We want to fly back to Mumbai in India, but the problem is the landing rights,” PAL president Jaime Bautista said at Economic Journalists Association of the Philippines (EJAP) meeting held recently at the Filipinas Heritage in Makati.

Apparently, the problem is not the fifth freedom rights to which PAL already had limited entitlements as what Mr. Bautista wants to point out but the right to carry more is already closed.

"Transporting more passengers out of Suvarnabhumi airport to the Indian subcontinent is the problem" says a CAB official.

CAB Executive Director Carmilo Arcilla said that all the flight entitlements from Bangkok to Mumbai are already taken by other operators because PAL never bothered to exercise it since 2006.

"Thai authorities are not preventing PAL from flying out of Bangkok to India or Pakistan. They have fifth freedom rights along the routes applied. The problem is the slots are all taken up " says the official, referring to Bangkok-Mumbai route.

"You just can't say we have the rights to fly there. Because in reality you need to have a share of the seat entitlements awarded by the Indian government and service it. Since PAL isn't using its share it was given to others" he adds.

He further said that it would have been a different story if PAL would fly direct as they are entitled to fly the biggest 747 everyday if they wanted to, unlike Bangkok where they have to share it with others.

"There are currently four airlines servicing Mumbai and Bangkok route. One of them is Cathay Pacific. If all the seat entitlements are already taken by these airlines, there is no way PAL can use any, except the renegotiation of the ASA between Thailand and India. The good thing is they expired last January so we can negotiate with the Thai's for additional seats in our favor. Perhaps the only thorny issue there is the consent of other airlines if they are willing to agree together with the reciprocal right of Indian carriers, particularly Jet Airways which is very interested to fly here" says Arcilla.

Bautista on his part has said that currently, the ideal aircraft for the Indian market is the Airbus A320 but can't fly the range straight without weight penalty. The A330-300 on the other hand is capable of flying to Mumbai but is too big at this stage. They are also in short supply of medium ranged airliner to service the route except the possible tags from Bangkok. The only other viable option for the A330/340 is for it to stop in Thailand and carry passengers from Mumbai to Bangkok other than those going to Manila.

“The problem we have is the yields because of economic crisis.The route would be costly if PAL would not be able to book passengers from Bangkok. We need to carry more passengers there to make it work" said Bautista.

“There is definitely demand there,” he said. “Hopefully, we can fly there within the year.”

Meanwhile, Bautista is very optimistic in the growth of domestic travel market. “We will be relaunching our low cost subsidiary in March to better compete with budget carriers. Their growth would be higher than our growth because there are people who would always look for a budget flight. In terms of number of passengers, there is still room for growth,” he added. PAL Express is already operating on code share with Air Philippines.

With respect to the company's retrenchment plans, Bautista said that they are still in talks with the PAL Employees Association regarding its decision to outsource workers. “What is important is that we continue to communicate and understand each other’s situation,” he said.

PALEA recently filed a notice of strike against PAL. The government is currently hearing both positions in the NCMB (National Conciliation and Mediation Board) in the hope of bringing them to a mutually acceptable compromise./JE

RP to sign air accord with Turkey this year

Turkish Airlines ready to fly from Bangkok,
but will Manila open it up?

February 26, 2010

Bangkok – The Philippine skies will soon greet the arrival of Turkish Airlines from Istanbul as the government finally confirmed its readiness to sit down with the Turkish government to discuss the forging of Air Services Agreement (ASA) between the two countries which has been deferred for two years. The ASA seeks to boost the economic cooperation between the two countries.

The Philippines begged off to conclude ASA with Turkey last year because it wanted 5th freedom right traffic between Bangkok and Manila as part of the proposal which Thailand and the Philippines aren't ready to provide because all seat entitlements between intermediary points were already taken.

Thailand and the Philippines will talk later this year to decide on opening more slot as well as discussed PAL's seat entitlement to India before forging agreements with Turkey. Istanbul already expressed their intent to sign the air deal before the end of 2009 but Manila has nothing to give on its request.

Turkish Airlines is aggressively consolidating Bangkok as its regional hub in Asia as it pursues expansion in Southeast Asia, Australia and New Zealand.

Mr Adnan Aykac, Turkish Airlines General Manager for Thailand, Vietnam and Cambodia said the "airline's business strategy is to make Bangkok its hub in Asia. Australia already allowed us connection from Bangkok."

The Australian government recently signed its first Air Services Agreement with Turkey. The agreement will allow Turkish Airlines to immediately begin up to five direct flights a week between Australia and Turkey. The agreement also allows the carriers of both countries to enter into code-share arrangements with the airlines of a third country to provide services between Australia and Turkey via intermediate destinations.

Turkish Airlines wants at least three flights a week between Istanbul and Sydney. Qantas too will have the same right but said last week that it had ''no current plans'' to fly to Istanbul via Bangkok.

"The missing link is only the Philippines as the government there is still not ready to talk. Our proposal to the Philippines is the same as those approved by Australia" Aykac added.

While the prospect of Turkish Airlines flying to Australia becomes another irritant for Qantas, Philippine Airlines and Thai Airways International has been campaigning against the grant of fifth freedom access between the two intermediate points because of overcapacity.

The airline is currently courting Thai Airways International as its strategic partner to begin its foray not only in the Australia-New Zealand market but also for the Philippine market.

The airline plans to extend its non-stop flight from Istanbul to Bangkok through to Ho Chi Minh City in October, and possibly Kuala Lumpur and Manila extension before the end of the year at the earliest.

It hopes to increase its Istanbul-Bangkok flights from daily to twice daily later this year if its plan service extension to Australia-New Zealand with Thai pushes through. It also hopes to enter into code share agreements with Philippine Airlines with its Manila flights should its talk with Thai bogged down.

Aykac said negotiations with Thai Airways to form a code-share partnership began about a year ago and had been moving slow as TG does not see any urgency to co-operate.

For Tourism Secretary Joseph Durano, Turkish Airlines arrival to the country would be good for the tourism industry as it will not only attract Turkish tourists, but also brings other foreigners to the country, including Russians and Europeans.

“I’m confident we are getting Russian tourists out of Turkey,” Durano has said stressing that “travel habits in the West are looking towards Asia to travel. Its a good addition to Transaero Airlines which will begin service later this year."

It seems to appear however that the Department of Tourism (DoT) is always singing a different tune with that of the Civil Aeronautics Board (CAB), part of the negotiating group, which also has Department of Transportation and Communications (DoTC), Departments of Foreign Affairs (DFA), Department of Trade and Industry (DTI), and representatives from airline companies as its members.

The open skies policy is apparently part of the President's Medium-Term Development Plan for 2004 to 2010 which seeks to promote the country’s tourism industry but local opposition seems to make the policy in reality a close sky.

"While we are hopeful we can strike a deal with them later this year, we do have alternatives to support our growth in Asia. And that includes flying direct." concludes Aykac.

Aerial Spray, Ban or not to Ban?

No photo Banana planters defend use
By Domini M. Torrevillas

February 25, 2010

Banana growers in Davao have appealed to President Gloria Macapagal-Arroyo not to ban aerial spraying. According to them, aerial spraying in banana plantations should not be banned due to several reasons.

They claim aerial spraying is “the safest and most effective means of dispersing approved pesticide against black sigatoka, the most destructive airborne disease of bananas. Recommended fungicides under normal use do not pose a health risk and nobody has been adversely affected for the past 40 years of aerial spraying in the Philippines and for the past l08 years in Latin America.”

They say aerial applications are governed by Fertilizer and Pesticide Authority guidelines in addition to stipulations on Good Agricultural Practices by the Food and Agriculture Organization.

They further say that banning of aerial spraying will affect the $720-million banana industry in the Philippines. It will mean closing down of small grower cooperative farms owned by more than 30,000 agrarian reform beneficiaries and loss of livelihood to some 500,000 people dependent on the banana industry. This will also affect peripheral industries such as trucking, shipping, stevedoring, suppliers of crates, plastics, labels, etc.

According to the growers, a Department of Health-funded study on Health and Environment Assessment of Sitio Camocaan, Hagonoy, Davao del Sur conducted in 2006 and headed by Dr. Allan Dionisio of the University of the Philippines was ruled by the UP peer review as “scientifically flawed.” This same study was also ruled by experts of the World Health Organization as “inadequate, inconclusive; it has loopholes, the data is limited.”

The growers are also saying that the DOH’s conclusion to ban aerial spraying based on these studies, reports and reviews is not supported by adequate data. A Nov. 3, 2009 statement shows that WHO “does not have a formal position on aerial pesticide spraying for agricultural purposes.” 

The WHO experts found several major limitations in the study so they could not recommend a ban on aerial spraying based on the study. Instead they suggested that DOH “review available literature and data from other countries as well as conduct surveillance, environmental monitoring and further epidemiological study on health effects of pesticide usage”.

According to the growers, the evaluation of the WHO experts implied that the Dionisio study does not have any value in the formulation of a national policy to ban aerial spraying.

In November 2009, the House of Representatives Committee on Ecology conducted an ocular inspection in Camocaan, which, environment advocates claimed had an uncomfortable number of diseases among residents due to aerial spraying. The inspection was followed by a public hearing at the Apo View Hotel, Davao City. Representative Rufus Rodriguez, after looking at the Camocaan issue said that the House of Representatives will push for a strict regulation — NOT A TOTAL BAN — on aerial spraying.

Other countries use aerial spraying but regulate its use to protect human health and environment. A 30-meter buffer zone is in effect in the Philippines but the banana plantations are actually applying a 50-meter buffer zone. The buffer zone is important in aerial spraying to protect the communities and other areas from the fungicide drift that is claimed by NGOs to reach as far as 3.2 kilometers.

Dr. Andrew Hewitt, one of the few world experts on bio-aeronautics who has conducted hundreds of studies on aerial spray for almost 20 years said that the airplane used in banana plantations here in the Philippines flies just over a few feet above the canopy of the bananas. Among his observations from his recent visit in a banana farm in Camocaan, Hagonoy, Davao del Sur is that aerial spraying does not produce a drift of the chemicals used, thus belying critics’ claim that the drift reaches as far as 3.2 kilometers. The aircraft in banana plantations sprays the fungicide down.

The growers mentioned that Hewitt saw aerial spraying in the Davao region to be among the best practices in the world because it is done professionally and properly. He cited the need to protect the local banana industry while at the same time protect the environment and the health of the people. “We can do both,” he said. “Rather than ban aerial spraying we can regulate it.”

Despite all these and the outcries from the banana industry, then Health Secretary Francisco Duque submitted a memorandum to President Arroyo recommending the banning of aerial spraying. Meanwhile, the Pilipino Banana Growers and Exporters Association led by its president Stephen Antig sent a letter to President Arroyo appealing not to ban aerial spraying.

It’s a good thing President Arroyo created a high-level task force to make an independent study on aerial spraying including effects on public health and environment. The task force to be headed by Presidential Adviser on Mindanao Affairs Jesus Dureza will be composed of key government agencies, experts and other stakeholders, taking into consideration internationally accepted standards on aerial spraying. The task force’s recommendations will help President Arroyo to decide whether or not aerial spraying should be banned.

Category 2 could permanently damage tourism

By Babe Romualdez

February 25, 2010

While we continue to struggle with our economy that has become largely dependent on remittances from Overseas Filipino Workers, the downgrading of the Philippines’ rating to Category 2 by the US Federal Aviation Administration more than two years ago could permanently damage the tourism industry. It can be recalled that in the November 2007 audit conducted by the FAA, the country’s civil aviation system was found to be seriously noncompliant with standards set by the International Civil Aviation Organization.

Unfortunately, the Category 2 rating gave the public a false impression that Philippine carriers like PAL are not safe – when in fact, the deficiencies (operating regulations, technical guidance, licensing and certifications) were more procedural and technical in nature. FAA found that the then-Air Transportation Office did not have authority “under existing national regulations to conduct appropriate safety oversight functions.” ATO’s record-keeping and filing system was in disarray; it lacked necessary equipment, personnel and technical procedures to certify the airworthiness of carriers; employees conducting airman licensing tests do not have appropriate training and qualifications. Likewise, there was no training program for basic areas of inspector functions. Worse, the FAA could not identify who in the ATO was fully trained. In short, personnel were doing jobs which they were not qualified or trained for.

The government scrambled to restore the country’s Category 1 rating by scrapping the ATO and creating the Civil Aviation Authority of the Philippines in 2008. Unfortunately, ICAO’s recent issuance of a significant safety concern or SSC rating – putting the Philippines in the same category as 13 other countries like Angola, Bangladesh, Cambodia, Rwanda – again gave the wrong impression that Philippine carriers are not safe when in fact, all these failures have nothing to do with an airline’s operations or its safety record. In fact, PAL, the country’s flag carrier, adheres to international aviation standards and is the only Philippine carrier to pass the International Air Transport Association (IATA) operational safety audit.

I was told by the president of PAL, our good friend Jimmy Bautista, that CAAP inspectors must have the necessary qualifications and the length of experience to do their jobs competently. CAAP was created as an autonomous and centralized civil aviation authority, but a DOTC circular ruled that current inspectors – who presumably were holdovers from the defunct ATO and found unqualified under standards set by the ICAO – are protected by the Civil Service Commission.

The best solution is for CAAP to hire qualified consultants to expedite the lifting of the Category 2 rating and address ICAO’s SSC rating. This is what Indonesia did after it was given a Category 2 rating. This adversely affected its flag carrier, Garuda Indonesia, because it had to suspend flights to Los Angeles. Late last year, the US government invited the carrier to reopen direct flights to the US after the Indonesian aviation rating was upgraded to Category 1. CAAP should follow Indonesia’s example and help our airlines that are already suffering from the global financial crisis like PAL and even Cebu Pacific.

What is strange however was the manner by which the FAA downgrade was implemented. The audit was done in July 2007, followed by a written warning to ATO in October indicating that the issuance of the Category 2 rating was imminent. At the time, Hawaiian Airlines was filing for a Foreign Air Carrier Permit with the Civil Aeronautics Board to operate to Manila from Honolulu. According to sources, the FAA officially issued the downgrade in January 2008 – after Hawaiian Airlines obtained a temporary operating permit from CAB. Worse, the FAA waited until after PAL pushed through with its purchase of the Boeing 777s which were specifically targeted for the long range US market.

As it is, PAL’s planned flight increase to Honolulu and other US destinations have been put on hold – making the airline a clear victim of the FAA downgrade. Sources say the cost to PAL alone is $100 million a year since 2007, so you can just imagine the damage not only on the flag carrier but on the tourism industry as a whole, especially with news that Australia and the European Union are planning to issue a similar downgrade to the Philippines’ aviation system. I really don’t understand why government has failed to act quickly in lifting the FAA downgrade and protect this country from unnecessary aggravation. This is no longer about politics but our own pride as a country and the protection of our interest as a nation, which is why government should strengthen the mandate of civil aviation authorities.

As a matter of fact, I myself have a first-hand experience regarding safety violations. Last weekend, we were flying by helicopter en route to Batangas and avoided – by just a few seconds – a collision with a seaplane piloted by some American named Mike O’Farrell, registered under Subic Seaplane Inc. with the devilish number RPC-666. There is no question the fixed-wing aircraft had no business flying on a helicopter route at that altitude. O’Farrell is 66 years old and is definitely beyond the age limit for flying a commercial aircraft. The irony is, he’s even claiming to be close to the US Embassy. So what?!? He can be close to Obama – who the hell cares! We’re talking about lives here, particularly that of the tourists he flies. There have allegedly been numerous complaints against this old pilot about culpable violations regarding air safety rules and regulations but surprisingly, he’s still allowed to fly. Ironically, we’re given a Category 2 rating by the US FAA but here’s an American violating our own air safety rules.

It is totally unacceptable for a foreigner to blatantly ignore and violate our air safety regulations. Civil aviation authorities must act on this matter immediately because the next time this over-aged pilot flies on the wrong altitude, he may kill 300 people on a 747. This is only one of the safety problems that aviation officials must address quickly – and not react when lives have already been lost.


PAF OV-10 Down Again

This time kills two

February 24, 2010

News clip courtesy of abs-cbn

Video graphics courtesy of GMANews.TV

Two Philippine Air Force pilots were killed Wednesday when their OV-10 Bronco aircraft with registration no. 399 crashed at 2:55 p.m during flight training exercise at Crow Valley, a gunnery and bombing field in Tarlac.

Killed were pilot Capt. Jose Enriquez Leonardo Corpuz and his co-pilot 1st Lt. Apollo Carandang.

Armed Forces of the Philippines (AFP) public information chief Lt. Col. Romeo Brawner said their plane took off at 11:25 a.m from Clark Field, Pampanga, home of the 1st Air Division.

“The remains of the two pilots were already recovered and were flown to Villamor Air base last night. On the other hand, a team from the 15th Strike Wing is already on its way to the crash site to retrieve the debris of the plane. We will have to wait for the results of the investigation” says Brawner.

The Air force were conducting aerial gunnery and bombing training at the Camp O' Donell as part of Teak Piston, a joint military exercise with the US that opened early this month.

Maj. Gen. Lino Horacio Lapinid, Commander of the 1st Air Division, said the ill fated OV-10 plane was manufactured on June 16, 1971. It was donated by the Royal Thai Air Force to the PAF on May 2, 2004. It nose-dived after delivering a practice bomb at around 2:45 p.m.

"It suddenly dived, supposedly it was recovering from a delivery of bomb. It was involved in an air-to-ground delivery of bomb…It was carrying a practice bomb," Lapinid said.

Lapinid said no other Philippine or American aircraft was flying during of the conduct of the specific training module.

The crash happened less than a month after a 12-seater Nomad plane went down in Cotabato City on Jan. 28 killing nine people including a civilian.

Last January 4, an OV-10 malfunctioned and made an emergency landing at Bangoy airport in Davao City during regular maintenance operations check flight. The plane’s landing gear collapsed during the landing process. No was killed or injured in the incident.

The PAF OV-10 aircraft provides close air support to ground troops operating against insurgent forces in the country.

CEB to fly Pagadian

Flies April 27 to Cebu and June 9 for Manila

February 24, 2010
Manila-Low cost carrier Cebu Pacific (CEB) will fly to Pagadian airport starting April 27, 2010 with a special ‘Go Lite’ seat sale as low as P688 from February 24-25, 2010 for travel between April 27 to July 31, 2010. Manila-Pagadian flights are also up for grabs for only P1,088, for travel June 9 to July 31, 2010.

"This is the first route expansion of the airline this year. Cebu-Pagadian-Cebu service will start on April 27, 2010 and Manila-Pagadian-Manila will begin on June 9, 2010" says Candice Iyog, VP for Marketing and Distribution.

“We are excited with the April launch of our Pagadian route, and we hope that we can stimulate the tourism and economy in the area. Pagadian is the regional center of Western Mindanao region so we should expect more traffic from this area particularly from the government and the business sectors. Its primarily an alternative point of entry to Misamis Occidental and Lanao del Norte” she said.

The flight schedule for Cebu-Pagadian-Cebu, effective April 27,2010 are the following:

CEB-PAG 5J 443 1130H - 1230H T-TH-SA-SU ATR 72-500
PAG-CEB 5J 444 1250H - 1350H T-TH-SA-SU ATR 72-500

"However, our flight frequency to Ozamiz might be affected with this move." says Iyog. Flights 5J869/870 Cebu-Ozamiz-Cebu T/Th/Sa/Su frequency are scheduled to be canceled effective on the same date. There is also plan of reducing the frequency for 5J781/782 Manila-Ozamiz-Manila in favor of 5J773/774. "Most of our passengers there either comes from Lanao del Norte and Zamboanga del Sur. Nothing is final yet but we are evaluating them" adds Iyog.

5J 773/774 Manila-Pagadian-Manila, has the following tentative schedule effective June 9,2010:

MNL-PAG 5J 773 1135H - 1310H M-W-F A319
PAG-MNL 5J 774 1340H - 1515H M-W-F A319

Cebu Pacific has the most extensive domestic network in the country boasting 33 domestic destinations across the nation to include the upcoming flight to Pagadian this April. Aside from Pagadian, CEB flies to the following Mindanao destinations direct from Manila and Cebu to Surigao, Siargao, Butuan, Cagayan de Oro, Dipolog, Ozamiz, Zamboanga, Cotabato, General Santos and Davao.

PAL 777 start flying downunder

Launch service today

February 20, 2010

Manila- The oldest airline in Asia is set to upgrade its Australian service one month ahead of its planned launch as Philippine Airlines is set deploy its latest brand new Boeing 777-300ER on its Sydney and Melbourne services today, February 20.

The company said that the response from the Australian market has been phenomenal with the introduction of its latest aircraft that they have recorded impressive growth in its reservation surpassing the capacity of the current A330-300 which can accommodate only 302 passengers.

This prompted the airline to advance services arrival one month ahead of schedule. The service will set new standards on the Australian routes, offering a larger and more spacious aircraft with wider seats, wider aisles, more headroom and seat-back video on demand in all cabins.

The 370-seat aircraft upgrade in the Australian market by Philippine Airlines will be followed by the March 18 launch of the carrier’s new twice-weekly A330-300 services from Brisbane.

Qantas Airlines also fly the route four times weekly utilizing Boeing 767-300's to Sydney and Brisbane. With the service upgrade, Philippine Airlines could potentially strengthen their hold of the Philippine-Australian market from the current 56% to as far as 70%.

The airline's new business class will offer the most modern features available on direct flights between Australia and Manila, including the only fully flat beds amenity.

A new triangular schedule in March will see the 777 fly five times a week from Sydney to Manila and three times a week from Melbourne, in addition to another two Melbourne services each week aboard an Airbus A330 which also connects from its Brisbane service.

Meanwhile, PAL narrowed its losses in the first three quarters of its current fiscal year as it reported a “total comprehensive loss” of $40.2 million for the April to December 2009 period of its 2009-2010 fiscal year down from the $330.2 million loss recorded in the same period a year earlier.

The airlines total revenues for the period decreased by 15 percent to $1.08 billion, with both passenger and cargo revenues showing declines of 26 percent to $805 million and 14 percent to $73.5 million, respectively.

Its total expenses as of December decreased 30 percent to $1.1 billion as compared to the previous year’s $1.56 billion which is mainly attributed to the sharp decline in fuel prices last year.

However, its revenue passenger kilometers (RPK) numbers are down 3.2 percent despite a 7.3% increase in passenger numbers as it transported 7.02 million passengers compared to 6.54 million passengers carried a year earlier. Revenue Passenger Kilometers (RPK) is an airline yardstick for profitability as it reflects the revenue generated based on passenger sales volume indicating sluggish sales and stiff competition from low cost carriers. The airlines Passenger load factor (PLF) was 73.91 percent, further sliding from the 76.12 percent recorded in the same span in 2008.

PAL in a statement said the result “fell below expectations, but was still noteworthy, being a significant reduction” from the $330.2 million loss it posted for the same period in 2008.

PAL has currently two Boeing triple seven in service with four others on order for 2012 delivery.

PAL denied Korean and Saudi Arabian flights

As RP Airlines struggles for operating permits abroad
Justify Full
By Jarius Bondoc

February 17, 2010

RP aviation’s poor international rating has begun to trouble Filipino airlines. This is the gist of Foreign Undersecretary Franklin Ebdalin’s recent letter to Civil Aviation Authority of the Philippines chief Ruben Ciron.

On Feb. 8 Ebdalin wrote Ciron that Korean civil aviation officials had nixed Philippine Airlines’ bid for a Cebu-Seoul route. Saudi Arabia too may delay resumption of the flag carrier’s Manila-Riyadh flights. Authorities in Japan, Hong Kong, Singapore, and Australia have begun inquiring about RP’s aviation record and policies. Meaning, international operations Cebu Pacific and Zest Air too could be impaired. Revenues would be lost from the traditional high-profit routes.

The cause of all this is twofold. First, in Nov. 2007 the US Federal Aviation Administration downgraded RP to Category-II in security and safety. Facilities and personnel of the Air Transport Office were found wanting. Sadly it was the private sector that suffered from government’s poor grade. Filipino carriers to the US were barred from setting up new or expanding old services.

The CAAP hastily was formed to stop the decline. Hardly any improvements happened, though. So hit, second, the recent posting by the International Civil Aviation Organization of “significant safety concerns.” RP was lumped with backward or failing states like Angola, Bangladesh, Congo, Djibouti, Kazakhstan, Rwanda and Zambia.

The UN agency found that of 191 navigational facilities RP-wide, only 16 are reliable, eight are due for recalibration by end-Feb. 2010, and the rest are in disrepair. Again private carriers are the ones punished for the CAAP score, in terms of restrictions like the Korean action against PAL. Yet 90 percent of CAAP revenues come from navigational charges on airlines.

Ebdalin in his letter asked Ciron what CAAP is doing to address the US-FAA and ICAO concerns. The answer is yet unknown, as Ciron’s performance is being reviewed by Malacañang.

Meanwhile, Transportation Secretary Leandro Mendoza is claiming in press releases that airports RP-wide improved under President Arroyo. This was supposedly because of an 800-percent funding increase in 2001-2009.


Dismissed CAAP Official wants reinstatement

Argues illegal dismissal
for fraudulent issuance of airline COC

By Rudy Santos
February 16, 2010

MANILA, Philippines - A training and licensing seminar at the Civil Aviation Authority of the Philippines was disrupted yesterday when a dismissed CAAP official tried to reinstate himself on the basis of a supposed decision by the Civil Service Commission.

Reports said Daniel Dimagiba, the dismissed CAAP deputy director-general, forcibly entered the CAAP with eight other persons and installed themselves at the training room of the Technical Center during lunch break.

CAAP security personnel politely advised Dimagiba’s group to refrain from disrupting the ongoing session but the group allegedly refused to leave.

In a statement, CAAP Director General Ruben Ciron said Dimagiba remains officially dismissed until a supposed CSC decision reinstating him becomes final and executory. “Since the CAAP has 15 days to file an MR against the CSC resolution, Dimagiba cannot unilaterally assume his previous post nor engage in any official act,” he said.

The CSC, in a decision dated Feb. 8, allegedly voided Dimagiba’s dismissal from the service claiming that Ciron did not have authority to fire his subordinate since only the CAAP Board of Directors, headed by Transportation and Communications Secretary Leandro Mendoza, could do so. But Ciron said Dimagiba was dismissed on the strength of an order by the CAAP Board of Directors led by Mendoza.

The CAAP Board, in Resolution No. 09-005 dated Aug. 27, 2009, confirmed and ratified the authority of the (CAAP) director general to create the Special Hearing and Adjudication Board which heard administrative case 001-09 against Dimagiba “for grave misconduct on eight counts.” The CAAP Board concurred with the following findings: guilt of the respondent (Dimagiba) on five counts of grave misconduct; dismissal of the three counts (of the same charge); penalty of dismissal with cancellation of eligibility with forfeiture of leave credits and retirement benefits and disqualification for reemployment in the government service without prejudice to criminal or civil liabilities.

The case against Dimagiba allegedly stemmed from a meeting at the European Union’s Air Safety Committee in Brussels last Nov. 4, 2008. The agency called Ciron’s attention regarding a dubious Carrier Operating Certificate issued to One Sky Aviation allegedly an air carrier in the Philippines, which turned out to be non-existent. Using its bogus certification, One Sky Aviation was allegedly able to enter and operate in Australia and other parts of the world.

A top-level investigation was initiated by the Australian government since the questionable certification poses a serious international security threat especially after the 9/11 terror attacks. It also undermined the relationship of CAAP with its Australian counterparts and the rest of the aviation community.

The bogus certificate was eventually found out to have been signed and certified by Dimagiba, without the mandatory Certificate of Public Convenience and Necessity (CPCN) issued by the Civil Aeronautics Board.

Dismissed CAAP Executive returns

As CSC voids dismissal for want of authority

By Rainier Allan Ronda
February 15, 2010

MANILA, Philippines - The Civil Service Commission has voided the dismissal last year of Civil Aviation Authority of the Philippines (CAAP) deputy director general for operations Daniel Dimagiba.

In a resolution issued last Feb. 8, the CSC ordered the reinstatement of Dimagiba, saying that CAAP director general Ruben Ciron did not have the authority to dismiss him from the service, saying that only the CAAP board of directors, headed by Department of Transportation and Communications (DOTC) Secretary Leandro Mendoza, could do so.

“Clearly, while it may be true that the director general, in this case, Ciron, is the duly recognized appointing authority of CAAP, his power of appointment does not extend, among others, to the position of deputy director general, which is held by appelant Dimagiba,” the CSC said.

It will be recalled that Ciron had dismissed Dimagiba in May of Last year for his alleged involvement in a number of anomalies.

Dimagiba had fought his dismissal, saying that Ciron had pursued moves to oust him from the agency after he questioned Ciron’s alleged questionable transactions and his appointment of fellow retired military generals and colonels, as well as fellow members in the Reformed the Armed Forces Movement, in the CAAP despite their lack of expertise and experience in civil aviation management.

It will be recalled that Ciron, a retired Philippine Air Force general and graduate of the Philippine Military Academy, had appointed fellow retired military officer, Col. Eduardo “Red” Kapunan, to replace Dimagiba.

It will be recalled that the CAAP was hurriedly formed in 2008 after the country’s downgrade from Category I to Category II rating with the United States’ Federal Aviation Authority (FAA) due to the country’s non-compliance of international civil aviation standards.

The ATO was turned into an authority – the CAAP – to allow it to use its own revenue to fund the training
of check pilots and other technical personnel, as well as satisfy other requirements of the FAA and the International Civil Aviation Organization (ICAO) of a national civil aviation body.

Legaspi repairs runway lights

Gets P12M for landing lights upgrade
By Mar S. Arguelles

February 13, 2010
Legaspi - The Civil Aviation Authority of the Philippines (CAAP) said civil and electrical works will start for the rehabilitation of the Legazpi Airport runway lights which was destroyed by Super Typhoon Reming in 2006. CAAP has released some P12 million funding to finance the rehabilitation works with the installation of runway lights at 2.2 kilometers stretch of the Legazpi airport runway.

Edgardo Ramos, CAAP Legazpi chief, at the Department of Transportation and Communications (DOTC) “Ulat sa Bayan” forum said rehabilitation works will be completed by June this year. He said with the installation of new runway lights "we can expect planes of various types to arrive and depart at night time in the city airport."

Ramos said the airport runway lights forms part of the Instrument Landing System (ILS) to guide pilots flight path in their arrival and departure flights. The existence of Mayon Volcano, Ligñon Hill and Kimantong Range obstructs the installation of an ILS facility at the airport.

The ILS are among the facilities used by the CAAP to comply with international airport standards, in which Bicol airports are accredited International Safety Organization (ISO) compliant.

Legazpi City Airport seats at a vast 75-hectare lot, 2,400 meters north of the city proper. The airport has a single runway configuration with a length of 2,280 meters and a width of 36 meters. The runway orientation have two connecting taxiways with a width of 21 meters. The airport services the plane daily flights of the Philippine Airlines (PAL), Cebu Pacific and government and private plane carriers.(PNA)

More airlines set to fly to RP

Aims to boosts more tourist arrivals

By Ehda M. Dagooc
Philippine Star

February 12, 2010

Cebu - Arrivals to the Philippines is expected to substantially improve this year following the positive performance reported by the transport industry recently.

“We are expecting a substantial boost in tourist arrivals this year given the efforts of the airline industry to cope with the competitive market. Also, initial reports of our partner stakeholders in the transport sector indicate a rising shift in focus from the OFW market to mainstream holiday travelers, which would translate to higher seat allocation for tourists,” said Ace Durano, Secretary of Tourism.

Durano noted in particular the growing Middle East traffic to the Philippines, specifically from the traditional large source markets such as Saudi Arabia and United Emirates, as well as emerging markets such as Kuwait, Qatar, and Bahrain.

“The deployment of modern fleet and facilities has allowed airlines
to expand their network, increase flight capacity and service more international points, including the Middle East and destinations around the Asia-Pacific,” Durano added.

The Tourism chief expressed approval over Philippine Airlines’ (PAL) move to resume its direct flights to Riyadh next month, to take advantage of the growing number of Filipinos in the Middle East. He also hailed the 5.35 million passengers or 38.2 percent increase in passenger volume at end-September last year of Cebu Pacific, whose request to fly to Beijing thrice a week this year has recently been approved by the Civil Aviation Board (CAB).

China’s national carrier, Air China, has earlier informed the Department that it would service direct flights to Manila next month, on regular scheduled flights three times a week. Clark-based budget carrier Spirit of Manila, on the other hand, would be flying to Macau, China and Taiwan, and is also expected to start flights to Kuwait, Bahrain, and Dubai this month.

Durano also mentioned the expected increase in number of travelers from Korea as Jin Air, Korean Air’s low cost subsidiary, launches services from Korea to Clark this February.

DOT said that greater air access, coupled with competitive fares and improved accommodations, allows travelers to all the more enjoy and appreciate the country’s diverse attractions in convenience.

With summer close at hand, the Department expects more tourists, along with more attractive fares and promos from the airline industry.

Top markets

Cebu’s hot and emerging market now-a-days for instance are the middle-eastern tourists from Kuwait, Iran, and other countries, mostly who come to Cebu for “educational” tourism.

China, is also one of the top growing markets for Cebu, including Russia for leisure travel, said DOT-7 regional director Patria Aurora Roa.

Last year, DOT announced that additional flights will be opened between mainland China and Taiwan to Cebu and Kalibo.

“Direct flights to their chosen destinations are a growing demand from the Chinese market which continues to be a stable source despite the crisis,” Durano said.

“With help from the Civil Aeronautics Board, Civil Aviation Authority of the Philippines, the Bureau of Immigration, the Bureau of Customs, and our partners in the industry, we have been aggressively pushing for these additional seats, to accommodate the inbound Chinese tourists,” Durano said.

Kid broke airport security

Raises concern at Mactan
Cebu Daily

February 11, 2010

More than just a news item of curiosity, the fate of Richard (not his real name), the 12-year-old who escaped detection and managed to board a plane bound for Manila is a wakeup call for airport security at Mactan to shake themselves out of complacency.

The boy was neatly dressed and bypassed security checks without presenting a ticket or boarding pass.

It was only when he boarded the Philippine Airlines plane that his ruse was found out since he had no seat number and kept moving from one seat to another.

Mactan Cebu International Airport Authority General Manager Danilo Francia said the security breach wasn't that serious since the kid didn't carry weapons or pose harm to others.

Francia would think differently, however, if someone with insidious motives had placed an explosive or contraband in the boy’s bag – without the kid knowing.

Using minors to perpetrate criminal activities is a standard modus of drug runners and pickpockets.

Adult masterminds know that a child won’t get prosecuted to the full force of the law because of the Pangilinan law that removes criminal liability from minor offenders.

If it was that easy for a boy to slip through, in a post 9-1l era where shampoo bottles and nail clippers are considered suspected tools of terrorists, someone is taking youthful innocence for granted.

Richard is no terrorist but the ease with which he got all the way into a commercial flight undetected was a serious loophole. If the flight had been near empty, and the boy had taken a vacant seat, no one would have been the wiser.

Anyone, who watched the movie “Home Alone,” is familiar with the adventure of Kevin McAllister, the 10-year-old smart cookie who managed to check into a hotel using his father's credit cards minutes after landing at a New York airport.

However, the mischief in Mactan stems from a broken family.

Richard, the runaway, was trying to look for his mother, who had left their home in Eastern Samar province years back. Richard ended up in Cebu City, where his boat had docked in June last year, a miscalculation on his part.

For months, the runaway took shelter in the Parian Drop-In Center, a facility run by the Cebu city government for street children.

His father was due to arrive in the center on Feb. 1 to get him. That same night, boy disappeared with P1,000 taken from one of the staffers.

Forced off the plane and returned to the custody of social workers, Richard was heartbroken that his mission had been aborted again.

Social workers said he seemed remorseful or shamefaced about the misadventure. He will have to face the reality of going home to Samar. Meanwhile, airport officials have to deal with the reality of tightening security in Mactan.

Raven Choppers joins PNP fleet

February 11, 2010

MANILA,-– Three brand new night-flying helicopters were added to the Philippine National Police’s (PNP) fleet of rotary-wing aircraft to provide air support during anti-criminality and internal security operations in the country.

PNP chief Director General Jesus Verzosa formally unveiled the three brand new Robinson R44 Raven II Police Helicopters worth P104.9 million acquired by the PNP as part of its 2008 Capability Enhancement Program.

The new police helicopters have night-flying capability, increasing the effectiveness of these aircraft in night time police operations. Other standard equipment include a 500-watt xenon search light and infrared imaging system, monitor, and dual audio controller for police radios.

“The tactical capability of these aircraft translates to greater operational advantage in our anti-criminality, public safety and law enforcement missions,” Verzosa said.

Police Director Leocadio Santiago, chief of the PNP’s elite Special Action Force (SAF), explained that the new police choppers provide effective strategic command and control functions to coordinate ground units in police operations, particularly during mobile pursuit situations.

At the same time, Santiago said the police choppers can also provide tactical support for fire suppression, aerial reconnaissance, supply airlift for ground troops in field operations, troop insertion and medical evacuation.

The Raven Police Helicopter is capable of flying for three hours on a standard fuel load at a cruising speed of 130 mph and range of 300 miles.

The three new police choppers are assigned to the Air Unit of the PNP-SAF along with other aircraft in its fleet.

The infrared imaging system allow the chopper pilots and crew the advantage of night-flying capability, thus, further enhancing the operational effectiveness of these aircraft that are otherwise limited to daytime flying only.

“These new police choppers will see action in our election security campaign against Partisan Armed Groups, threat groups and election law violators,” Verzosa said.

The PNP has been developing the air-ground capability of its tactical units for rapid deployment operations against threat groups, terrorists and criminal elements.

This capacity-building initiative is a strategic approach to meet operational requirements for rapid response in the course of internal security operations and response to threat situations that may arise particularly in the forthcoming election period for the May 2010 national elections, the chief PNP said.

SAF and other tactical units from the Regional and Provincial Mobile Groups, and National Operational Support Units had been undergoing specialized training on air-ground operations and rapid deployment by heliborne repelling, fast rope and tactical drop insertion.

Santiago further explained this air-ground rapid deployment capability will enable police tactical units to conduct surgical strikes on ground targets such as fortified enemy encampments, and bases of operation.

”The same rapid deployment capability will also enable tactical units to be inserted on the ground as troop reinforcement in any scene of encounter or government installations that are under attack,” Santiago said. (PNA) FFC/MM

ATC woes threaten MNL airspace

by Recto Mercene
Business Mirror

Wednesday, 10 February 2010

Manila - The Civil Aviation Authority of the Philippines (CAAP) on Monday assured that air operations in the country remain normal and dismissed talks that air-control tower personnel are mulling a walkout.

CAAP Director General Ruben Ciron made the statement to disabuse the mind of the flying public, which might be affected by the allegations that appeared in a daily newspaper, saying that the allegation is being floated by a disgruntled employee facing libel and administrative charges.

Ciron said the source of the erroneous information is not even an air-traffic controller but a low-level security personnel under the abolished Air Transportation Office (ATO).

“The source of the story is Cesar Lucero, who claims to be the CAAP Employees Union vice president, the same employee who had been consistently coming out with statements in the same newspaper that tend to undermine the credibility and integrity of the authority.”

“It is because of these acts inimical to the service that Lucero had been criminally charged with libel by CAAP…for spreading false information, and was consequently suspended for 90 days while his case remains under review,” Ciron said. He is also facing administrative charges before the CAAP’s hearing and adjudication board.

“Preventive suspension is not considered punishment but only as a deterrent measure to prevent him from tampering with CAAP documents, or influencing the outcome of the administrative investigation.”

Ciron said one of his first acts upon assuming office was to look into the welfare of the agency’s 3,500 employees, which is one of the first steps in the upgrading of the CAAP’s quality of service.

“For the first time, CAAP employees enjoyed receiving their 14th-month pay twice, on December 2008 and December 2009,” he said.

This is aside from their overtime, night-differential pay, medical and other benefits that had been immediately paid for. These are now part of the regular budget and no longer subject to availability of funds, unlike in the previous Air Transportation Office.

Ciron had since directed the CAAP finance department to process all 2009 financial claims of all its employees, including air-traffic controllers.

The CAAP has been trying to fast-track the appointment process within the allowable limits as evidenced by the creation of two-level selection boards.

As to the allegations that the country has scores of defective navigational aids (Navaids), this has long been categorically denied by the service chiefs who continuously monitor the performance of the equipment.

CAAP had even hired the services of Air New Zealand last year to augment the local capability for flight calibration of Navaids and related facilities.

“So far, there have been no adverse findings on the reliabilities of the Navaids, which otherwise would have been reported by pilots,” according to the chief of Air Navigation Service.

Ciron has been working to return the CAAP into Category 1 status. The remaining obstacle is the hiring of qualified technical personnel, now being fast-tracked by the CAAP, the Department of Budget and Management and the Civil Service Commission.

SBMA at odds on airport's future

Decoding Subic's financial woes

February 10, 2010

Subic — The Subic Bay Metropolitan Authority is at a loss on what to do with Subic Bay International Airport (SBIA), once the Asia Pacific home of US cargo giant Federal Express (Fedex) since 1996.

The airport, after Fedex left and transferred its Asia One logistics hub to China in February last year, has been losing 20 million not in pesos but in US dollars that should have gone to its loan amortization payments adding to its financial woes that ran in a billion pesos per year. Fedex paid $40 million (1.8 billion pesos) per year to SBMA.

With almost one billion pesos operational price tag deficit, Subic authorities are still reluctant to close it down. SBMA has been paying 500 million pesos annually to keep it open spending up to P250 million for airport operations, P150 million in debt servicing and another P100 million for maintenance cost. Now they have to pay 500 million pesos more coming from the taxpayers money.

Armand Arreza, administrator and chief executive officer of the Subic Bay Metropolitan Authority (SBMA), said that it doesn’t make sense anymore to continue its operations economically. He said that “It doesn’t even break even anymore, as it did when FedEx was still here.”

Arriza however said that they are still evaluating the airports viability and exploring alternatives for its use, which was then part of the U.S military base and formerly a Naval Station of the United States Navy before it was turned over to the Philippine government in 1994.

Subic airport serves as a secondary diversion terminal for the Ninoy Aquino International Airport in Manila with a 2,728-meter runway, modern navigational systems, and a 10,000-square meter passenger terminal that could handle 700 passengers at any given time. It has far better facilities than nearby Clark airport which is the main diversion route.

The airport can also handle 41 commercial civil aircraft from stand and remote parking locations, a capacity proven in the past few years when a fleet of Taiwanese airlines were diverted to Subic after the island-nation was buffeted by typhoons.

“There is no rush to close the airport,” Arreza said even if its losing money. “Actually, we are still marketing the airport and looking for other alternatives to make it useful.” Among the options being considered by SBMA is to turn part of the 200-hectare airport into a logistics area.

“If we convert 40 hectares of the airport’s 200-hectare area, then we can raise about $80 million for commercial development,” Arreza said.

The planned conversion of part of the Subic airport is consistent with the SBMA expansion program, which was meant to address the limited commercial and industrial space in Subic’s controlled area.

“The trend now in Subic is to move out of the central business district, and even outside the traditional boundaries, the fenced-in portion,” says Arreza.

“This 40-hectare portion could serve as an additional logistics area, while the rest could be used for commercial development,” he added.

The airport only now hosts a number of flight training schools, while its dream of attracting airlines for its hubs was largely a failure due to likability and connectivity issues to Manila, the same problems plaguing Clark's aviation growth potential. Some attempts by several airline firms failed and the airport is just servicing foreign charter flights for Subic bound tourists, particularly to its gaming and leisure industry.

SBIA records showed an aircraft movement in the airport significantly dropped from 108,686 in 2008 when FedEx still operated out of Subic, to just 57,246 in 2009. Passenger movement plummeted from 10,682 in 2008 to only 7,059 in 2009.

PAF expedites Nomad Replacements

Acquires 3 planes to boost fleet

February 9, 2010

Manila - The Philippine Air Force (PAF) is expected to acquire three light lift aircraft valued at $21 million (P920 million) in a bid to boost its transport capabilities.

"They will replace the Nomad for troop transport and logistic support" says Defense Secretary Norberto Gonzales.

Aircraft specifications is not disclosed but is expected to be bigger, Gonzales hinted. "Basically, we are hitting two birds in one stone as they are much bigger and more serviceable" Gonzales said.

"They will be vital to the transportation of troops and supplies to troubled areas in the south" Gonzales adds, saying the aircraft acquisition is part of the AFP modernization program which is two years delayed because of funding problems.

PAF spokesman Lt. Col. Gerardo Zamudio Jr. said that while acquisition of it is already approved by the President, they still have to secure the funds from the Department of Budget and Management (DBM) before they can proceed with the bidding for the aircraft.

Maj. Gen. Jesus Llanto, Head of the AFP Modernization Program, said they plan to replace the Air Force’s N-22 Nomad with turboprop planes because their maintenance is becoming more expensive citing Nomad’s spare parts availability and costly price.

"It can still fly, but we have to admit that we would spend more for the maintenance of the aircraft than as compared to buying new ones in the long term," he said.

“We just completed the bid documents, contracts are up for bidding next month after funds are made available by DBM. They will all have a 920 million price tag," Llanto said.

"They are part of the military’s capability upgrade program which has two phases. The first phase deals with enhancing internal security and has a project funding of P11.7 billion, which include the aircraft acquisition. The second phase is worth P22.2 billion which will be used to purchase a squadron of tactical fighter jets by 2014 to address territorial defense" Mr. Llanto adds.

Meanwhile, Zamudio said the acquisition of the aircraft had been planned even before the Nomad airplane crash last month, which killed nine people in Cotabato City.

5J Rules domestic traffic in 2009

by Lenie Lectura
Business Mirror

Monday, 08 February 2010

DOMESTIC passenger air traffic last year increased by 25 percent to 14.74 million compared with 11.76 million in 2008, aided by the airlines’ aggressive pricing strategies, data from the Civil Aeronautics Board (CAB) showed.

Philippine Airlines (PAL), Cebu Pacific, Air Philippines, Zest Airways and Seair transported a total of 14,746,438 passengers out of the possible 18,965,130 seats for domestic travel during the period.

Of the total number, Cebu Pacific, the airline unit of conglomerate JG Summit, recorded 7,234,162 passengers compared with PAL’s 6,047,045.

Cebu Pacific recorded a load factor of 81 percent against PAL’s 77 percent during the period out of a possible 8,941,840 seats for Cebu Pacific and 7,871,586 seats allocated by PAL. Air Philippines, the low-cost partner of PAL, recorded 408,863 passengers out of the possible 588,948 seats; Zest Airways, formerly Asian Spirit, reported 872,223 passengers and 1,309,002 allotted seats and Seair transported 184,145 passengers out of the possible 253,754 allocated seats.

Air Philippines reported a load factor of 69 percent; Zest Air, 67 percent and Seair, 73 percent.

Air Philippines is 99-percent owned by the Lucio Tan Group. PAL, however, is 95-percent owned by Tan.

For cargo, a total of 148,065,939 kilograms were recorded in 2009, as against 136,369,643 kg reported in 2008. Of the number, Cebu Pacific transported 76,412,595 kg; PAL 66,893,326; Pacific East Asia Cargo Airlines 3,626,185; Air Phil 771,366; and Seair 362,467 kg.

In 2008, PAL carried a total of 4,908,876 passengers; Air Phil 913,570; Cebu Pacific 5,350,795; Asian Spirit 374,145; and Seair 217,879.

LTP seals deal with AirAsiaX

Inks A330/A340 MRO

by Aaron Karp
February 7, 2010

Singapore - Lufthansa Technik Philippines, a joint venture between MacroAsia and LHT, signed a contract last week with Malaysia's AirAsia X to provide MRO services on the carrier's long haul fleet of eight A330s/A340s for three years beginning in March.

LHT Chairman August Wilhelm Henningsen told reporters at a Press Conference that its investments at LTP in Manila and Ameco in Beijing signifies its strong commitment in Asia.

Asia represents "our highest commitment in terms of investments and we are going to expand if needed," he said. LTP for instance, now has 3,000 employees in Manila.

The deal was signed at the Singapore Airshow. The work will take place at LTP's Manila facility. LTP will provide four C-checks and a heavy maintenance check in the first year and also has committed to performing cabin retrofit services. The deal's value was not disclosed.

Henningsen said the recession did not have as severe an impact on MRO providers as airlines. MRO "is not so heavily affected up to now" by the financial downturn, he explained, noting that the "we have not seen the reduction in flight frequencies that we've seen in past crises," particularly in 2001 and 1991. He did concede that MRO work on freighter aircraft has taken a serious hit owing to "a lot of cargo airplanes that have been grounded."

Separately, Ameco Beijing, the joint venture between Air China (60%) and LHT (40%), was awarded a five-year contract for heavy maintenance on United Airlines' 747-400 fleet. Value was not supplied. In 2005, UA chose Ameco to maintain its 777s under a five-year contract, which has been extended for an additional five years. Additionally, LHT and Aeroflot Russian Airlines signed a contract in January under which LHT will provide C checks on Aeroflot's four 767-300ERs with the work to be performed by Ameco.

Asia's budget airlines fly high

despite global turbulence

February 6, 2010
Singapore - The timing said it all. In the same week that Japan Airlines filed for bankruptcy protection, shares in Singapore's low-cost carrier Tiger Airways climbed on their first day of trading on the stock exchange. Last month's insolvency of Asia's oldest full-service airline on one hand and the successful initial public offering of the 2003-founded budget carrier on the other provided for "quite an interesting contrast," said Peter Harbison, executive chairman of the Sydney-based Centre for Asia Pacific Aviation.

It was "probably in many ways a very nice little symphony of the way the world is changing at the moment," he said at a conference ahead of this week's Singapore Airshow, which ends Sunday.

While Asia's full-service carriers have struggled to stay afloat over the past two years of global recession, the outbreak of swine flu and record oil prices, no-frill airlines like Tiger Airways, Jetstar, Air Asia and Cebu Pacific have posted enormous growth rates.

"The low-cost carrier model, if well executed, will grow market share even in times of economic uncertainty," said Garry Kingshott, chief executive adviser of Philippines-based Cebu Pacific.

For the first half of 2009, which was described as an "annus horribilis" by the industry group International Air Transportation Association, Cebu Pacific posted profits of 1.82 billion pesos (39 million dollars).

"Against an industry backdrop of despair," said Kingshott, Cebu Pacific added aircraft, routes and destinations while lowering costs, and its aggressive approach made it the domestic market leader with a share of more than 50 per cent.

Other budget carriers posted similar good news. Malaysia's Air Asia posted a net profit of 130 million ringgit (38 million US dollars) for the quarter through September while Tiger Airways just announced its 21st-straight quarter of year-on-year passenger growth for the period from October to December.

Low-cost carriers in the Asia-Pacific accounted for 15.7 per cent of the total airline seats in the region last year, according to the Centre for Asia Pacific Aviation, a sharp contrast to 1.1 per cent in 2001.

The rise in gross domestic product (GDP) in the region is a key driver of the boom for budget airlines.

Asia's GDP was expected to grow by 5.75 per cent in 2010, the International Monetary Fund said, compared with 1.7-per-cent growth on average in Europe.

"Asia is the place to be," Tiger Airways chief executive Tony Davis said, noting that the region has a population base six times that of the European Union.

With rising GDP, more people in Asia are able to travel by air, he said, "provided you push your airfare to a level they can actually afford."

For Davis, only the price counts in the highly competitive budget-airline business.

Low-cost carriers in their purest form are retailers like Sam Walton, founder of the US company Wal-Mart, he argued.

"Don't add complexity - don't try to be Tiffany as well as Wal-Mart," he said. "Death, taxes and lower airfares are the only three certain things in life."

Heads of other low-cost carriers, however, are seeking different ways to push their business.

"Our focus is very much to establish a brand," said Jetstar chief executive Bruce Buchanan, adding that the airline upgraded its marketing investment to bridge the business and leisure market segments.

Moreover, Jetstar, owned by Australia's flag carrier Qantas Airways, just signed a deal with Air Asia aimed at cutting costs by cooperating on aircraft maintenance and passenger handling and designing the next generation of aircraft for low-cost operations.

"The only way to survive in this business is to run faster than the environment you are in," Buchanan said. "It is hard to sustainably grow."

Other aviation experts shared Buchanan's concern, pointing to the danger of profitless growth for the fast-rising number of low-cost carriers.

Harbison said he hoped "most of the low-cost carriers" had a sustainable business model in one form or another.

Brett Godfrey, founder of Australia's Virgin Blue, said he was sure that the business would change.

"We will see more real consolidation, real merging and real exits," he said. -Earthtimes

Thales and Eaton to power 5J's new buses

February 6, 2010

Philippine carrier Cebu Pacific has selected Thales avionics equipment and signed an agreement with Eaton Aerospace for the supply of motor pumps for 15 of its Airbus A320 on orders with delivery starting this year up to 2014. The announcement was made at this week's Singapore Air Show.

The equipment that was selected by the airline includes T3CAS, a product produced and marketed by Thales JV ACSS. T3CAS combines a traffic alert and collision avoidance system (TCAS), terrain awareness and warning system (TAWS), Mode-S transponder and Topflight Flight Management System, Low Range Radio Altimeter.

Nearly 80 percent of the forward fit market is controlled by three avionics giants: Rockwell Collins, Honeywell and Thales. Cebu Pacific earlier awarded contract to Rockwell Collins for the A320's other navigational equipment needs.

Thales’ market share continues to rise buoyed by record sales at Airbus. Rockwell Collins is expected to benefit from the 787 entry into service while GE Aviation continues to augment its market footprint with the recent acquisition of PBN provider NAVERUS. Honeywell remains exposed to a decline of the current 737 line while an updated 777 could emerge around 2015-2017 to power its sales.

"We will support Cebu Pacific Air's goals to modernize its fleet, and we are eager to explore further opportunities to promote CEB's continued growth and success," says Bradley J. Morton, president of Eaton's Aerospace Group.

Cebu Pacific has 15 A320 orders with 5 options.

Kalibo international flight arrivals grows 300%

Domestic flight arrivals balloons 200%

February 5, 2010
Kalibo - Caticlan gateway, Kalibo International Airport is the country's fastest growing airport with 5,203 domestic flights and 360 international flights in 2009, data from the Civil Aviation Authority (CAAP) showed.

In 2008, the airport registered 2,171 domestic flights and 132 regional flights respectively, barely two years after it was opened for international traffic.

"Kalibo airport accommodated at least one international flight daily last year, either going to Korea, Taiwan, or China and we are expecting more to come this year" says Aklan Governor Carlito S. Marquez.

Speaking in his State of the Province Address (SOPA), Gov Marquez said that in 2009, Kalibo inbound passengers for domestic flights numbered 360,265 while inbound passengers for regional international flights reached 20,608 compared to 2008's 183,110 inbound domestic passengers and 12,411 inbound regional passengers.

"Outbound domestic passengers registered 377,177 and outbound regional passengers were 20,809 in 2009, a much higher number compared to only 191,685 outbound domestic passengers and 12,839 outbound regional passengers of 2008," Marquez said.

Kalibo International Airports presently handles once a week regular charter flight of Philippine Airlines and the twice a week regular flights of China Airlines to Taipei, Taiwan. Zestair also has regular flights to Incheon, South Korea four times a week. Other non-scheduled charter operators are Korean Air, Pacific Pearl Airways, TransAsia Airways and Shanghai Airlines.

Meanwhile, PAL announced that aside from the regular Taipie flights, the airline will also arrange special charter flight from Chengdu, capital of southwest China's Sichuan Province, to Kalibo on Feb 14 with return service on Feb 18.

"The new International passenger terminal is almost 100% complete. But there are still some finishing touches that needs to be done like installation of offices and security equipments and the like" says Marquez. DOTC hopes to inspect and accepts the project this month as it intend to open the terminal before March this year with President Arroyo gracing its inaugural.

On the other hand, Aklan's other airport, Caticlan registered 17,988 flights and 550,084 passengers in 2009, 256,458 of which are incoming ones; 96,585 foreign; 145,505 domestic, and 14,388 OFW passengers.

Competition forced Palex to quit Virac

Blames lack of passengers to suspend flights

The budget airline PAL Express unexpectedly suspended its flights along the Manila-Virac-Manila route last week reportedly due to declining passengers.

PAL Express’ Q400 aircraft took off on its last outbound flight on Jan. 24, leaving air commuters who have already bought promo tickets for their summer vacation here perplexed and exasperated. A source told the Tribune that the management has yet to decide when the flights would resume. The airline’s pullout leaves Cebu Pacific Airlines and Zest Airlines to fight over PAL Express’ market share in terms of passengers.

Records show that for the 10-month period from March 2009 to December 2009, Cebu Pacific got the lion’s share of 62,521 passengers at 45.5%, with PAL Express at 35.4% and Zest Airlines at 19.2%.

While PAL Express had the second biggest share of passenger traffic, its share actually declined from a high of 50% in May 2009, falling to a low of 18% in September before recovering to 24% in December last year.

Its Load Factor, or the ratio of actual passengers over available seats, also fell from 80% in May 2009 to just 46.2% in December.

PAL Express had an average load Factor of 51.48% for the same 10-month period, compared to Cebu Pacific’s 75.48% and Zest’s 61.38%. It’s Dispatch Reliability, which reflected the actual and projected number of flights, was at an average of 92.64%, lower than Cebu Pacific’s 97.02% and Zest’s 94.84%.

Passengers have also complained about PAL Express’ tendency to cancel flights after several hours of delay even during fine weather, earning its management an official complaint signed by frustrated and angry passengers at one time.

Prior to its flight suspension, PAL Express’ Q400 aircraft offered the most number of seats at 76, with Cebu Pacific’s ATR 72 at 72 seats and Zest’s MA-60 at 56 seats.

Rockwell Collins secures 5J avionics

Wins first order in RP

February 4, 2010

Cebu Pacific Air (CEB) has chosen Rockwell Collins to provide a full suite of communication, navigation and surveillance systems as baseline equipment for the airline's 15 new Airbus A320 aircraft and its five options. This award marks Rockwell Collins' debut on the Philippine-based CEB fleet.

A signing ceremony to commemorate the agreement will take place at the Singapore Airshow on Feb. 3 at 11 a.m. in the Rockwell Collins Stand U77, USA Pavilion.

"As an airline that takes great pride in providing world-class service at the right price, Cebu Pacific Air understands the critical importance of equipping their aircraft with the most advanced and reliable avionics systems available," said Thud Chee (TC) Chan, vice president and managing director, Asia-Pacific for Rockwell Collins. "We look forward to working closely with Cebu Pacific Air to demonstrate the innovation and support provided by Rockwell Collins' avionics, which will help the airline deliver reliability and value to its customers."

The Rockwell Collins MultiScanTM Hazard Detection System is among the avionics CEB selected. The MultiScan system is the first and only radar that analyzes and determines actual weather hazards, not simply atmospheric moisture content, to provide flight crews more accurate weather returns. The MultiScan system is derived from extensive operational experience to create a fully automatic, hands-free airborne radar system that reduces pilot workload and enhances safety and passenger comfort by minimizing unexpected turbulence encounters, and provides optimal clutter-free weather displays.

"This is in line with CEB's continuing commitment to provide the safest and most convenient flights to our passengers. We recognize the quality of Rockwell Collins' avionics technology, and look forward to a fruitful partnership with them," said CEB President and CEO Lance Gokongwei.

CEB also selected the following sensors from Rockwell Collins: ADF-900 Automatic Direction Finder, DME-900 Distance Measuring Equipment, HFS-900D High Frequency Data Radio, GLU-925 Multi-Mode Receiver, VHF-2100 High Speed Multi-Mode Data Radio, and VOR-900 VHF Omnidirectional Range Receiver. -Peanuts

5J flies back to Caticlan

Starts flight on March 1

February 2, 2010

Cebu Pacific (CEB) announces the resumption of its Caticlan operations starting March 1, 2010, after an almost 7-month hiatus from flying to the Godofredo P. Ramos Airport, the gateway to Boracay. Four flights from Manila-Kalibo will return back to Caticlan as well as the Cebu-Kalibo flights.

“CEB is pursuing this gradual transition to Caticlan to make sure our ATR pilots are properly re-certified to operate the route. In as much as we would like to resume our full Caticlan schedule immediately, our main priority will always be the safety of our passengers,” said CEB VP for Marketing and Distribution Candice Iyog.

The airline expects to resume full Caticlan operations by March 28, 2010, with 11 Manila-Caticlan-Manila flights and 1 Cebu-Caticlan-Cebu flight daily. This gives CEB the most number of airline seats to and from Caticlan.

“We hope passengers on our March 1-27 flights can support us in this transition period. We are very happy we can once again open our Caticlan route to our Boracay-bound passengers, and offer the same great value fares we offer to our 31 other domestic destinations,” she added.

The airline suspended its flights to Caticlan last July 10, 2009, following the directive of the Civil Aviation Authority of the Philippines (CAAP) concerning the airport’s safety concerns and its implementation of unidirectional landing and take-off procedures.

Following the completion of the runways extension project, CAAP in a memo dated January 25, 2010 re-certified both ATR 72-500 of Cebu Pacific and MA-60 of Zest Air to take off and land in both directions of Caticlan runway subject to applicable restrictions. The Memo however bars the covered airlines from using the airport particularly during bad weather conditions, as they are advised to divert flights to Kalibo airport. Meanwhile, Zest Air is scheduled to announce its resumption of service next week.

Our Lips are sealed

Let PAF planes fall from the sky

February 1, 2010

There have been allegations of corruption in the Air Force that led to the crash and the deaths of the eight airmen. But for Deputy presidential spokesman Ricardo Saludo, he told critics to come up with evidence to support their allegations of corruption in the Air Force. Unfortunately, the guy with the evidence is locked away in jail.

Air force Capt. Joenel Pogoy is facing court martial proceedings for allegedly uploading videos in youtube detailing the supposed massive corruption among Air Force officials in cannibalizing airplane parts in PAF inventory. And one of them is the Nomad.

Senior pilots in the Air Force are reportedly reluctant to fly the aging planes because most of the aircraft are practically flying coffins due to lack of proper maintenance.

“Its' common knowledge here. But we shut up and turn a blind eye because of military policy. Most of the pilots are demoralized already and wants to leave the Air Force to seek employment in local and international airlines,” says one air force officer who graduated from the PMA eight years ago. He doesn't want to be identified for fear of similar reprisals Pogoy got.

Pogoy alleged that top officials of the Air Force cannibalized spare parts of other aircraft and sell them to the market without proper documentations. In his blog, he alleged that the C-130 that crashed in Davao was part of a rigged maintenance contract that was blown 200 times its contract amount.

Air Force spokesman Lt. Col. Gerardo Zamudio said Capt. Joenel Pogoy was recommended to be charged before the military tribunal for violations of Articles of War 96 and 97 (conduct unbecoming of an officer and gentleman and conduct prejudicial to good order and military discipline, respectively) for posting the video.

Strike notice filed

PALEA on collision course with PAL

By E. N. J. David

A STRIKE NOTICE has been filed by employees of Philippine Airlines (PAL) over a cost-cutting plan aimed at stabilizing the flag carrier’s finances.

But going to the picket lines remains a last option, the Philippine Airlines Employees’ Association (PALEA) said, noting that the strike notice is primarily aimed at getting the government involved in settling a dispute over the airline’s plans.

"The decision to file a notice of strike is to attain the highest degree of participation and involvement of the government in resolving the current situation in PAL. We feel that negotiations in the NCMB (National Conciliation and Mediation Board) would not go anywhere without the government’s intervention and help in negotiations," PALEA President Edgardo C. Oredina told BusinessWorld.

"[A] strike, however, is only a worst case scenario," he added.

In its strike notice, PALEA cited "intended mass lay-off of union members and officers by April 2010, illegal outsourcing of regular positions, direct negotiations with union members, unresolved issues during preventive mediation, and non-compliance of pay scale review during settlement of the wage distortion."

PAL President Jaime J. Bautista last August announced that the airline needed to adopt cost-cutting measures amid a global industry downturn. Among the options being considered, he then said, were aircraft sales, cutting routes, layoffs and a search for a white knight.

Both management and the union began negotiations regarding the outsourcing of non-critical jobs in September. PALEA requested for preventive mediation from the NCMB that month and then asked for the suspension of talks in October, citing the lack of progress.

The DoLE stepped in but was unable to present an early retirement plan acceptable to PALEA, which also asked Malacañang to intervene.

Mr. Oredina said the government must either "help the flag carrier financially to either survive and keep all of its current employees or to provide acceptable separation pay to those willing to be retrenched..."

"Policies that do not protect the flag carrier are one cause of the falling revenues. The government must be willing to put PAL under rehabilitation and infuse fresh capital to it to save it and our jobs because if something happens to the flag carrier it is a black mark on the government," he said

The Labor department, said Mr. Oredina, will be calling a meeting between PAL and PALEA this week.

PAL management, for its part, urged the union to look at the "bigger picture and rise to the occasion.’

"The management of Philippine Airlines is deeply saddened by the decision of the PALEA to file a notice of strike at this critical juncture when the airline is struggling to stabilize its finances as a result of the worst-ever downturn in the global aviation history," it said in a statement.

"We urge PALEA to look at the bigger picture and rise to the occasion. It is particularly instructive to consider the example of other legacy flag carriers, where management and employees have shown the will to make sacrifices to save the company."

It added that it was continuing to communicate with PALEA and hoped that negotiations would be civil and open.

The Labor department normally assumes jurisdiction over labor disputes that are in the national interest. Labor Secretary Marianito D. Roque declined to comment, telling BusinessWorld "can’t pass judgment [now] as it would prejudice the case."

Mr. Oredina said: "There are long and complex talks ahead but the main point is to save the flag carrier. We are not for outsourcing but we are open to options for the sake of our members." --