Bicol Airport in Suspended Animation

As budgetary constraint forced its deferment

September 28, 2010

If Albay Governor Joey Salceda only have its way, the P3.4 billion airport should be operational around 2012. But even his closeness to the President, Benigno S. Aquino, is not a guarantee that Legaspi Daraga Airport would be operational around that period considering that it still require 2.5 billion to complete it.

Latest figures disclosed that the national government has spent only close to P1 billion for the project since its project inception in 2006; P150 million of which was allocated for feasibility study and detailed engineering in 2007; P108 million for right-of-way acquisition; P100 million for access road in 2008; and P600 million for civil works in 2009.

However, budgetary allocations was put on hold in 2010 by then President Gloria Arroyo due to swelling budget deficit. She also transferred the supervision of the airport project from DOTC to CAAP in accordance with its mandate.

According to DBM Secretary Florencio Abad, they have alloted an additional P780 million for Daraga airport but said that the amount would not be enough to complete it in 2012, considering that the infrastructure project was funded by General Appropriations fund approved by Congress.

Governor Salceda is hoping that 2011 would be a different year as Malacanang promised continuation of the project as part of the 1.4 billion pesos budget allowance for the Bicol Region. But he was given only P700 million out of the 1 billion he asked from DOTC.

“We were seeking P1 billion in the 2011 budget for the continuation of construction works but only 700 were given to us. I was hoping the allocations for 2010 to be included because CAAP did not provide any budget for the project this year” Salceda said.

Abad however stated that budget allocations for 2011 are still subject to the revenue generations by the government in 2010, unlike foreign funded projects like that in Laguindingan which require only a counterpart fund of 20-40% equity.

The revised schedule of works pegged the completion date around 2014 at the earliest and 2015 at the latest.

PAF whistleblower to be freed

Scheduled for release on October 18

September 25, 2010

Former Philippine Air Force captain Jonel Pogoy would be released from confinement two years after serving his sentence for several violations of the Articles of War over an expose on supposed PAF graft and corruption says Lieutenant Colonel Miguel Okol, Air Force spokesman.

Okol said Pogoy would be released on October 18 saying that appropriate disciplinary action has been served for several violations of the Articles of War.

Pogoy was charged in the military court for writing derogatory remarks against his superior officers concerning the “questionable repairs” of the C130 planes, the cannibalization of plane parts, and the violation of the “No fly, No pay policy”, among others.

Okol however said that Pogoy was detained due to charges of violations of the military’s Articles of War numbers 64(disrespect towards their superior officer), 96 (Conduct Unbecoming an Officer and a Gentleman) and 97 (Conduct Prejudicial to Good Order and Military Discipline).

Pogoy was sentenced on May 31 by the Military Court Martial to two years detention after being found guilty of violating these articles of war in relation to his allegations against the military in the video uploaded two years ago on YouTube, the military spokesman added.

He was dismissed from service after running for public office in the May 2010 elections.

CAAP opens more airport for night flight operations

September 20, 2010

MANILA - The Civil Aviation Authority of the Philippines (CAAP) has ordered the operation of night flights to help promote tourism and for better connectivity within the country.

"I have ordered all the airports that are capable for night flights to operate immediately, to help promote tourism in the country. Tourist can now have their connecting flights at their choice of destination even during night time," CAAP Director General Alfonso Cusi said.

Airports that are upgraded for night-landing capability are Butuan, Legaspi, Dumaguete, Roxas. Cotabato, Dipolog, Tuguegarao, Naga, Tagbilaran and Virac.

"All our efforts are in close consultation with all airlines, especially on the traffic and demand of flights on which airports needed to be opened 24 hours" Cusi said.

Cusi has been meeting with all airport managers since he assumed office. The operation of night flights is part of the new policy direction that Cusi has been doing to better enhance and professionalize the aviation industry in the Philippines. - ABS-CBN

5J to go public by October 8

Slates Roadshows for P32-B IPO at P150/Share

September 17, 2010

The Philippine Stock Exchange has approved the listing application of Cebu Air, the airline unit of JG Summit Holdings (operating under the brand Cebu Pacific Air), paving the way for its P32.19 billion initial public offering slated for October 12, 2010.

PSE documents show, Cebu Air will start its domestic roadshow on September 24, 2010, followed by its international roadshow and bookbuilding process on September 27, 2010.

While the firm has set an offer price ceiling of P150 per share, it will determine the final offer price and number of offer shares on October 8 after discussions among the company, the selling shareholder, and the lead manager.

Proceeds from the sale of new shares will be use for the payment of new aircraft.

The IPO will be the country’s first this year and the biggest since the SM Investment Corporation public offer.

Cebu Air said it is offering up to 214.63 million shares of which 30.66 million are new common shares and up to 155.98 million are existing shares owned by CPAir Holdings. There is also 28 million shares set aside as an over-allotment option. A maximum offer price is set at P150 a share.

Excluding the over-allotment shares, total proceeds to be raised by Cebu Air from the sale of the primary shares is estimated to be up to P4.56 billion while selling shareholders will raise up to P23.4 billion.

Net proceeds amounting to P4.47 billion will be used for the pre-delivery payments of aircraft and is expected to be disbursed in 2011 to 2012.

Cebu Air has tapped Citigroup Global Markets Limited, Deutsche Bank AG Hong Kong branch, and JP Morgan to be the joint global coordinators, joint book runners and international lead managers while ATR Kim Eng Capital Partners, Inc. will be the domestic lead underwriter.

According to Cebu Air president Lance Gokongwei, Cebu Air’s expansion plan calls for the addition of 22 aircraft over the next 4 and a half years.

The airline said it has firm orders for 22 Airbus A320 aircraft and has entered into operating lease agreements for two Airbus A320 aircraft.

“We have obtained options from Airbus for the purchase of seven Airbus A320 aircraft that are expected to be ready for delivery between 2015 and 2017, which will expire in December 2012,” Cebu Air said. - Manila Bulletin

Europe-based firm acquires Mabuhay Satellite

By Mary Ann LL. Reyes

September 14, 2010

Agila-2 satellite (ABS)Manila - A company backed by the Permira funds, along with the Asia Broadcast Satellite (ABS) management team, has reached an agreement to acquire Kingsbridge Ltd., the holding company for ABS, one of the fastest growing premium satellite operators in the world.

The Permira funds will become the majority shareholder of ABS.

Permira is a private equity firm with a European heritage and a global reach. The firm advises funds with a total committed capital of approximately 20 billion euro ($26 billion). Its funds, raised from pension funds and other institutions, make long-term investments in companies with the ambition of transforming their performance and driving sustainable growth.

ABS completed last July 1 its acquisition of Mabuhay Satellite Corp. (MSC) business and facilities in the Philippines, including Agila2, now renamed as ABS-5.

Founded in 2006 by CEO Thomas Choi, ABS supplies bandwidth connectivity to broadcasting and telecom customers, serving over 80 customers in around 30 countries. ABS currently operates three satellites in orbit under the ABS brand, one under co-brand with a third party and two additional satellites in the pipeline including the new state-of-the-art ABS-2 scheduled to be launched in early 2013.

ABS’ prime orbital locations cover four fifths of the world’s population, targeting high growth markets in Asia, Russia, Africa and the Middle East.

Officials announced that the acquisition of ABS is entirely equity funded. The Permira funds support ABS’ ambition to become a leading satellite operator in its target markets. One of its key near-term initiatives is to build and launch the new ABS-2 satellite, which will be one of the largest fixed service satellites to be launched over the Eastern Hemisphere.

The Permira funds have significant experience in the satellite sector, having previously made successful investments in Inmarsat, a leading provider of global mobile satellite communications services, and Intelsat, the leading provider of fixed satellite services worldwide.

At Inmarsat, the Permira funds backed substantial investment in technology through the financing of the design, launch and manufacture of the I-4 fleet of satellites, the most advanced commercial mobile communications spacecraft of their kind while at Intelsat, the funds facilitated the successful acquisition of Panamsat and the pursuit of new growth opportunities.

Citigroup Venture Capital International Proprietary Investment Partnership L.P. and Citigroup Venture Capital International Co-Investment L.P., which have been the majority shareholders of ABS since 2006, agreed to sell their respective interests in the holding company of ABS, along with ADM Capital and certain other shareholders, subject to the terms and conditions of the share purchase agreement dated September 9, 2010.

Terms of the deal were not disclosed. The acquisition of ABS marks the Permira funds’ third investment in Asia since 2007.

“We are delighted to be working with the Permira funds, one of the world’s most experienced satellite investors. Their team understands the industry and its immense opportunities and shares the management’s growth ambitions. This made them the obvious choice for ABS as we embark on our next stage of development,” Choi said.

For his part, Richard Sanders, head of TMT at Permira, said ABS is one of the world’s fastest growing satellite operators, with prime orbital locations serving markets with strong fundamentals. “Tom Choi and his team have achieved a tremendous amount in the past four years from start-up and, with the Permira funds’ backing, have the opportunity to continue growing in their target markets in Asia, Russia, Africa and the Middle East,” he said.

Meanwhile, Ji Min, managing director and head of Asia for Citi Venture Capital International (CVCI) said: “We had a very positive experience as a majority shareholder of ABS. We applaud the management’s efforts in contributing to the company’s strong growth and in developing good relationships with its customers. We value the close-knit relationship that we were able to form with Tom Choi and his team and are pleased to see the company enter the next phase of growth. We wish them a great future.”

Henry Chen, Head of Permira’s Hong Kong office, added: “This is an example of Permira displaying its competitive edge - combining strong global sector expertise with extensive local reach to capture attractive investments. This is Permira funds’ third investment in Asia and we will continue to focus on attractive opportunities in sectors in which we have deep insight and can bring significant value.”

RP eyes more HK flights

Carrier wants to add seats to Indonesia

By Aura Marie P. Dagcutan

September 14, 2010

The Philippines will push through with air talks with Hong Kong in the last quarter of the year, with the Civil Aeronautics Board (CAB) saying the Aug. 23 hostage fiasco would not affect negotiations for additional entitlements.

Carmelo L. Arcilla, CAB executive director, said in a telephone interview yesterday the bloody hostage drama that killed eight tourists from Hong Kong was “just a temporary setback” for the country.

“To date, we have an entitlement of more than 10,000 seats weekly for the Manila-Hong Kong route. We are confident that we will close the deal with the Hong Kong air panel ... This is a regular activity we do with them and other countries,” he said.

Mr. Arcilla said the Philippine air panel would be also talking with China, Indonesia, and Italy. The Philippines has 10,000 seats per week for China and Indonesia.

“We still don’t have the figures on how many additional seats we will be negotiating for. The country’s air panel will convene this month to set how many additional seats we need,” he said.

The panel is made up of the CAB and representatives of the Department of Transportation and Communications, the Department of Tourism, and the private sector.

The latest air deal for Philippines came in May with Singapore. Deals with Qatar and South Korea were also signed before the entry of the new administration.

Mr. Arcilla said Cebu Pacific has requested 540 additional seats for its Manila to Indonesia flights.

Cebu Pacific vice-president for marketing and distribution Candice A. Iyog told BusinessWorld in a separate interview the carrier had requested for additional 540 seats to accommodate four new Airbus 320s that would arrive from October this year to January next year.

Meanwhile, Mr. Arcilla said the CAB awarded Singapore entitlements early last month to Philippine Airlines (PAL), Cebu Pacific, Zest Air, and Airphil Express. The flag carrier got 700 seat entitlements or four weekly flights. From 28 flights per week, PAL now has 32 flights a week to Singapore.

Cebu Pacific Air, which flies to Singapore 25 times a week, got 908 seats or six more flights a week. The budget carrier can now mount 32 flights per week to Singapore. Airphil Express and Zest Air (formerly Asian Spirit) can now mount daily flights to Singapore.

Moreover, the CAB will seek to amend existing agreements with European Union members such as Italy and Germany.

“While the local carriers have been banned to fly to the countries in Europe, we still have to amend our existing deals with them. They are actually requiring us to amend the agreement to a community designation deal,” he said.

Mr. Arcilla said that in a community designation agreement, a European country can designate an airline to operate in the Philippines. “The amended agreement will give the flexibility to designate an airline to invest and operate in the Philippines. It would translate to more carriers operating here,” he said.

The CAB has so far sealed amended deals with Spain, the Netherlands, the United Kingdom, Finland and Turkey.

Local airlines are banned in Europe due to the country’s failure to meet international safety assessments. - Businessworld

Airphil Express flies Jolo and Bongao

Makes Zamboanga hub anew

September 10, 2010

Low Cost carrier Airphi Express, a subsidiary of flag carrier Philippine Airlines flew to Bongao Friday cementing Zamboanga as its regional hub it once enjoyed before pulling out in 1998. It will start operations to Jolo tomorrow.

The airline replaced Seair as current operator for the route which is plagued by re-fleeting problem after five of its Let-410 aircraft was declared unfit by the Civil Aviation Authority to fly for safety concerns.

But Maria Java, AirPhil Express vice president for marketing and media, stressed that flights were made possible by the recent upgrading of the airports in the two areas and not because of the current vacuum for air services in the islands whose majority passengers are US servicemen, government and banking employees.

Airphil Express is expected to utilize the 77-seater Bombardier Q400 in the Zamboanga-Jolo route with three times weekly schedule beginning September 11, and in the Zamboanga-Bongao route four times weekly from September 10, with connecting flights to Manila Cebu and Davao.

The airport runway upgrades were funded by the US government under the growth with Equity in Mindanao (GEM) Program and implemented by the Department of Transportation and Communications (DOTC) with the support of the provincial governments of Tawi-Tawi and Sulu.

The Tawi-Tawi runway boast a length of 1,920 meters from 1,608 meters with strips widened from 18 to 30 meters.

The Jolo airport runway on the other hand was extended 600 meters to 1,845 meters from 1,200 meters, and was also widened from 18 to 30 meters.

The improvements allow both airports to accommodate larger-bodied aircraft, such as Boeing 737s and Airbus 320s according to the data provided by the US government.

Roa had flown the evaluation flights in July to test and calibrate approach procedures.

“It felt like landing on runways in the US, built to the highest standards,” Captain Patrick Roa, Airphil Express’ chief pilot for safety and security, was quoted as saying.

Air Philippines is the 5th airline company to serve the area since PAL left in 1998.

PAL flies A330 to Iloilo

Launched its first wide-body service to the airport

September 8, 2010

Philippine Airlines has announced that it will be upgrading its equipment for Manila-Iloilo route with an Airbus A330-300 aircraft in one of its three daily flights.

PAL on Tuesday conducted a commercial probing flight (PR 141) on the Iloilo route using the A330.

The airline said the twin-aisle aircraft can seat up to 302 passengers or almost twice the capacity of their Airbus A320 fleet, a company statement said on Tuesday.

The A330 can also carry up to 22 tons of cargo, enough to accommodate Iloilo’s fresh produce and other freight regularly bound for Manila and other international destinations.

Aviatour roams Vismin Skies

As chartered flights spur island hopping
By Cris Evert Lato
Cebu Daily News

September 7, 2010

TOURISTS with only a short time to visit neighboring islands of Cebu need not worry about missing the chance to experience the other islands with the availability of chartered flights around central Philippines.

Aviatour Air (Aviatour) president and chief operating officer Jemar Bahinting said this arrangement provides more flexibility for tourists, with more pesos to spare, to enjoy the different islands which can be reached through Cebu.

Aviatour is a Cebu-based aviation company which offers aerial tours, chartered flights, pilot training and aircraft sales.

“We are highlighting (this) pick-up and drop-off service, which is very convenient for tourists with less time to visit the neighboring islands of Cebu such as Bohol,” said Bahinting.

Kenneth Madrid, executive vice president for sales and marketing, said this is the company's way of further promoting the tourism potential of the Philippines.

“We want to promote day trips. Tourists don’t have to check out of their hotels in Cebu. They can take our plane in the morning, arrive in the island of their destination and roam around. In the afternoon, our plane can bring them back to Cebu,” said Madrid.

Many tourists staying in Cebu for three to four days, want to include Bohol in their stay.

Panglao Island in Bohol is a favorite destination with its white sand beaces and resorts such as Panglao Island Nature Resort and Spa and Bohol Beach Club.

Madrid said his planes can fly to most Philippine airports in the country.

At present, they are focused on central and southern routes such as Tagbilaran (Bohol), Bantayan Island (Cebu), Maasin (Southern Leyte), Camotes (Cebu), Siargao, Guiuan (Eastern Samar), Dipolog, Camiguin, Caticlan, Tacloban, Surigao and Masbate.

Rates range from P1,736 to P6,823 depending on the distance.

Madrid said the company has partnered with 15 tour operators, which are members of the Cebu Association of Tour Operators and Cebu Travel & Tour Association.

Aviatour has also established partnerships with hotels and resorts to promote flight tours and chartered flights.

“There is a big market for hartered flights. This makes the island destinations more accessible,” he said.

Panglao and Daraga airport readied for 2011

Funded under PPP

September 5, 2010

Panglao and Daraga airport is set for project implementation in 2011 with completion date at 2014 and 2015 respectively according to the notice advanced by the Department of Budget and Management (DBM)to Congress for the new administration's 2011 budget.

The two newest international standard airports is part of a list of 10 priority projects that will be implemented in 2011 through Public Private Partnership program (PPP) of the government which is initiated by President Benigno Aquino III.

President Aquino announced the PPP scheme during his State-of-the-Nation address, saying the government by itself could not finance capital-intensive infrastructure projects.

Budget Secretary Florencio B. Abad said the capital outlay for these projects would largely come from private sector funds with the national government funding P15 billion as a strategic support fund for PPP projects which include the construction of two domestic airports as part of key tourism-related infrastructure.

“The government is looking forward to generating P180 billion to P200 billion in PPP (public-private partnership) undertakings” next year, Abad said.

“We look forward to working with Congress to make sure that PPP will really work to our benefit,” Abad said.

The airport projects will be offered to investors next month for funding as they are expected to bridge the gap on the revenue shortfall experienced by the government for it to be implemented.

The P4.2 billion Panglao airport is set to replace the congested airport of Tagbilaran which can no longer be expanded due to residential an commercial restrictions as a result of its proximity to the City, while the P3.4 billion Daraga airport is set to replace the airport of Legaspi which has terrain issues affecting navigational safety restricting its future growth as a commercial hub in the Bicol region.

Meanwhile, construction of new Tacloban airport terminal as well as expansion of Dipolog airport terminal building will also commence in 2011 under regular appropriations.

PPP's are priority projects solicited by the government. Those offered would be subjected to the usual tender process. It would take six months for solicited projects and nine months for those that are unsolicited to be approved for implementation.

Inspectors key for FAA upgrade

CAAP urged to hire Inspectors First

September 4, 2010

THE International Civil Aviation Organization (ICAO) wants the Philippines to hire professional flight inspectors first before it dreams of America's (FAA) and Europes's EASA lifting its veil against the country's aviation sector from non compliant nation to compliance status, says the organization's President.

Roberto Kobeh González, ICAO president, told reporters in a briefing on Friday the Civil Aviation Authority of the Philippines (CAAP) has been doing its best to resolve 89 problems found in local aviation.

The ICAO issued a Significant Safety Concern (SSC) tag on the Philippines in 2009 after a Universal Safety Oversight Audit inspection.

Gonzáles said it was a difficult and painful decision to downgrade the Philippines but decision had to be made to protect the flying passengers, foreign and domestic.

Some of the deficiencies were "lack of plan for certifying air operators in accordance with the Civil Aviation Regulations of 2008, as well as the lack of surveillance inspections of air operators and the aviation industry as a whole." he said.

"As of Aug. 16, the CAAP has resolved 77 out of the 89 problems. But definitely the main concern that the CAAP should address is the lack of trained inspectors. We have talked about outsourcing some inspectors for the meantime while the CAAP is training the local inspectors," Mr. González added.

Should the Philippines solved the problem of the flight inspectors, Mr. Gonzáles promised the country to restore the Philippines to the world map of international aviation. In January 2008, the United States FAA downgraded the Philippines to Category 2 from Category 1 following an International Aviation Safety Audit in November 2007. The European Union followed suit in 2009

Cebu Pacific opens Macau-Laoag route

September 1, 2010

The Philippines’ largest carrier Cebu Pacific (CEB) is set to launch its 17th international destination when it opens the Macau-Laoag route on September 20, 2010.

The departure time is scheduled every Monday, Wednesdays and Fridays at 9:40pm, and the arrival time is every Tuesday, Thursdays and Saturdays at 2:05am.

There are a total of 13 flights weekly to and from Macao to the Philippines from points in Manila, Clark, Tuguegarao and Laoag.

On Sept. 5, 2010, the airline will have its maiden Manila-Beijing-Manila flights.

CEB flies to 16 international destinations across the Asia-pacific region.