A380 Hangar to rise in the Philippines

5th in the World

April 30, 2011

German aviation services firm Lufthansa Technik (LTP), conducted a ground breaking ceremony yesterday for its repair air dock facility in the Philippines dedicated to its Airbus A380s.

Airbus A380 is the world's largest commercial passenger jetliner which first entered commercial service in 2007 through Singapore Airlines.

LTP said the $30 million facility will rise at the Ninoy Aquino International Airport Complex.

“The new $30 million hangar indicates the continuing commitment of Lufthansa Technik Philippines to build up its investment in the Philippines and create hundreds of high-tech, high-skill jobs for Filipinos,” the firm said in a statement.

No other project details were disclosed however.

But customers Lufthansa and Qantas airways are already lining up its cue to use the facility. The company already provides services for Qantas, Qatar Airways, and Cathay Pacific as well as several regional airlines.

“There are only four locations worldwide where the A380 can be maintained and the Philippines hopes to join this rank,” the firm added. They are currently found in France, Germany, China, and Singapore.

Recently, AirAsia X, the world’s first successful long-haul, low-cost airline, has renewed its contract with the Manila-based maintenance, repair and overhaul (MRO) company to AirAsia X’s Airbus fleet of nine A330s and two A340s.

Lufthansa Technik Philippines is a joint venture between Lufthansa Airlines and local company MacroAsia Corp.

$50 Million Deal for PAA?

Clark for Free!

By Tonette Orejas


April 29, 2011

CLARK FREEPORT—An airline partly owned by President Benigno Aquino III’s cousin has decided to locate its hub at Diosdado Macapagal International Airport (DMIA) in a major step toward the facility’s transformation as the nation’s premier airport.

The move last March by Philippine AirAsia (PAA) of businessman Antonio “Tonyboy” Cojuangco was hailed by Victor Jose Luciano, president and chief executive officer of Clark International Airport Corp. (CIAC).

But not everyone is happy with the PAA’s move under what was described by critics as a $50-million “sweetheart” deal that includes, among others, waiving fees and the priority use of a new terminal building.

Luciano said the waived fees are an incentive given to other airlines. “It’s not a new thing,” he said.

He said the decision of PAA, which is 40 percent owned by Asia’s biggest low-cost carrier, the Malaysia-based AirAsia Berhad, finally gave the DMIA an “anchor airline,” or a carrier headquartered elsewhere but using the Clark facility as a major base.

Cojuangco, PAA chief executive officer Marianne Beloso Hontiveros and Harbour Centre chair Michael Romero each own 20 percent of the airline. Cojuangco was the biggest contributor to his cousin’s presidential campaign in last year’s election.

Luciano said getting AirAsia to become an anchor airline took five years, or almost the length of time it served the Clark-Kuala Lumpur and Clark-Kota Kinabalu routes, despite the DMIA’s attractions: an executive order designating it as the country’s premier international airport, its strategic location, upgrades in facilities at the former US air base and other incentives.

‘Sweetheart deal’

CIAC could not get the country’s flag carrier, Philippine Airlines, into DMIA because “it simply did not want to,” Luciano said.

CIAC wooed AirAsia in the third quarter of 2010. Tony Fernandes, AirAsia’s group chief executive officer, announced the joint venture in December 2010. A memorandum of agreement (MOA) was signed on March 24 and Malacañang announced the CIAC-PAA deal.

A “$50-million sweetheart deal” for Cojuangco is how a Philippine Daily Inquirer source described the arrangement.

Sources among CIAC employees who asked not to be named for fear of losing their jobs said they were afraid the deal put the DMIA at a disadvantage.

Under the MOA, a copy of which was secured by the Inquirer, the signatories—CIAC, through Luciano, and PAA, through Hontiveros—agreed on 15 terms.

They include PAA’s commitment to dedicate 13 aircraft within five years until 2015, CIAC’s waiving of aeronautical fees (landing, take off, parking fees), CIAC’s setting aside 10 to 30 percent of passenger terminal fee for AirAsia Group’s marketing fund, and PAA’s priority use of a new budget terminal and the need to consult it on the design and development of the facility.

Inquirer sources were asking if the deal was clinched by PAA because Cojuangco is Mr. Aquino’s relative.

“Is the open skies policy of [Mr. Aquino] connected to the entry of his cousin in the airline industry and airport?” asked one of the sources in an e-mail to the Inquirer last week.

Talks long before P-Noy
Cojuangco dismissed suggestions of irregularity. He said talks with the Malaysian budget airline “started way back in 2006.”

“We helped them set up in Clark where they have been operating at least two years now,” Cojuangco told the Inquirer. “That was way before P-Noy even considered running for the presidency.”

Luciano said there was no time that Mr. Aquino, his economic advisers, friends or relatives had called him to favor PAA. He said Cojuangco was “not involved” in negotiations with CIAC.

“A representative of AirAsia Berhad was more actively engaged. But I learned that Tonyboy wants the hub in Subic [Bay Freeport in Zambales] because he has invested in a resort there. He was cold to the idea of Clark and since he was a minority [owner], he had to follow the majority’s decision, which is Clark,” Luciano told the Inquirer on Wednesday.

Cojuangco, he said, relayed this message to CIAC officials, through Hontiveros: “This is good for the country.”

Best hope for DMIA

The $50 million, supposedly the contract’s worth, is not mentioned in the four-page MOA notarized in Makati City. “That’s an invention,” Luciano said.

An Inquirer source said the $50 million is a “conservative projection” based on total departing passengers of PAA within 11 years from 2015 to 2026.

The amount is reached, the source said, if the total of 27.5 million departing passengers is divided by 117 passengers per Airbus 320 at 65 percent load factor. This is equivalent to 235,000 flights multiplied by $216 per flight, the current fee paid by AirAsia at DMIA.

“To think that fee is already a discounted rate,” the source said.

But to Luciano, the issue is not Cojuangco or his blood ties with the President.

It all boils down to what is the “best hope” for the DMIA so it can evolve into a competitive international services and logistics center in the Asia-Pacific region and become the premier international gateway as envisioned by Executive Order No. 174 signed by former President Fidel Ramos.

“This is a case of giving up this much to be able to obtain more,” he said.
Revenue projection

For instance, an AirAsia medium revenue projection showed that from 2.2 million passengers, DMIA can raise fees and revenues worth P1.7 billion within five years. The waived fees and marketing funds collected consist only of 7.5 percent and 6.45 percent, respectively.

The financial study also showed that without an anchor airline, traffic at DMIA in 2007 up to 2010 grew at 7 percent yearly among international passengers and 41 percent yearly among domestic passengers.

AirAsia, he said, showed a remarkable growth, which can be done by its subsidiary in DMIA.

Carrying only 200,000 passengers in 2001, AirAsia shuttled 31 million passengers in 2010.

A CIAC report said PAA’s hub operations will start in December this year, targeting 5 million passengers in three years to short and long-haul flights to Japan, Iran, France and New Zealand.

Luciano said the marketing fund, to be used for local and global promotions of DMIA, is not an expense because it brings returns.
Budget terminal

The MOA’s provision on the development and operation of a new budget terminal said “priority shall be given to [PAA] for its use in a designated area within the new budget terminal.”

“For this purpose, [PAA] will be consulted [on] the design and development of the building of the budget terminal, incorporating therein the airline’s requirements throughout the development phase,” the MOA said.

Luciano said the preference is given to help PAA fit its operations in the new facility.

MOA being reviewed

CIAC Chair Nestor Mangio, in a separate interview, said the MOA has yet to be presented to the board.

DMIA’s financial and legal officers were involved in the crafting of the MOA, Luciano said. He said this would be presented to the new CIAC board after the May 2 stockholders’ meeting.

The MOA is being reviewed by the Office of the Government Corporate Counsel, he said.

Luciano urged detractors within and outside CIAC to “give the DMIA a chance so that Clark, as an engine for economic growth in the [base] conversion process, would really deliver.” With a report from Daxim L. Lucas

Another S-211 Down

The Last of its Breed

April 29, 2011

Another Philippine Air Force (PAF) S-211 trainer plane crashed in Bagac Town, Bataan, moments after it took off from Basa Airbase in Floridablanca Pampanga around 2:32 p.m. killing its pilots, a military official said.

The two seater Italian made Aermacchi S-211 trainer jet crashed at 3:15 p.m. in Banawang village near the Stela Mariz Beach resort killing its pilot identified as Capt. Raymond De Leon and Maj. Ephraim Gatus Suyom, a valedictorian of Philippine Military Academy (PMA) class of 1997.

Armed Forces' Northern Luzon Command chief Lt. Gen. Gaudencio Pangilinan said the S-211 plane was on a routine proficiency flight before its disintegrated on impact. Cause of the crash is unknown.

"[The] aircraft disintegrated upon impact," Pangilinan said. "One confirmed dead, identification still for confirmation."

He said elements of the Army's 24th Infantry Battalion are now on site, security the crash site.

The ill-fated aircraft was one of the six S-211 trainer jets that were left operational from the total of 25 aircraft in the PAF inventory purchased since 1991. Last year, an S-211 plane belonging to the Air Defense Wing’s 7th Tactical Fighter Squadron crashed in July while engaging in a training exercise in Conceptcion town in Tarlac. The two pilots were unharmed as they were able to eject from the totally-wrecked plane before hitting the ground.

In 2002, another S-211 jet crashed due to mechanical failure, killing five people, including the pilot and his co-pilot, in Barangay Garcia in Cabanatuan City where 15 houses were also destroyed. The aircraft was reported to be on proficiency flight. Caused of accidents were never published.

PAF spokesman said the remaining five other still functioning S-211 trainer jets of the Air Force would remain grounded until the cause of last Thursday’s accident is known.

Reciprocity should be key aspect of EO 29

By Lance Y. Gokongwei
CEO, Cebu Pacific

First Posted on the
Philippine Daily Inquirer

WE HAVE always been supportive of Aviation liberalization including “open skies” agreements with other countries. Why wouldn’t we be? We were a major beneficiary of domestic aviation de-regulation. And we have never been shy telling media about our support for a liberalized aviation industry.

But a few weeks ago, we broke corporate tradition at Cebu Pacific, and went public with our concern over the lack of reciprocity under EO 29. It was a first in CEB’s 15-year history.
We decided to come out and engage the issue constructively so there would be a better understanding of why reciprocity based on equal opportunity is extremely important not just to Cebu Pacific but also to the public in general.

We agree with the objective of EO 29 to bring in more tourists. It is posited that if foreign carriers are allowed to compete and freely fly to the Philippines the tourists would come.

There are two key aspects introduced in EO 29: increased competition and unlimited access to our skies by foreign carriers. We have no issues with these.

We would like to add a third aspect: reciprocity. We would like to be part of this competition. If foreign carriers are given unlimited access on routes to and from the Philippines, we believe it is only fair, that CEB and other local airlines be given unlimited access to and from the Philippines to these carriers’ home countries, on an equal opportunity of access; on a level playing field.

Reciprocity will keep all airlines on their toes and allow Filipino carriers like CEB to compete with foreign carriers. Ultimately, more competition leads to lower fares, benefiting not only CEB but the whole tourism industry, here and abroad.

We are very proud to say that Cebu Pacific’s low fares played a major role in spurring growth in tourism as shown by the 127 percent growth in domestic tourism in the last five years. From 7.3 million in 2006 to 16.6 million passengers in 2010.

International tourism from the markets we serve has grown much faster than from the markets we do not fly to. Last year alone we grew our International traffic by 39 percent. That’s 2.2 million passengers in 2010 alone.

Further examination of the data will prove the case. In 2005, a year before we started flying CEB planes to Singapore, tourist arrivals were estimated at 69,435. Since we introduced lower fares to Singapore in 2006, that rate has grown by 74 percent, resulting in 121,083 tourist arrivals from Singapore last year.

Perhaps, at the risk of sounding immodest, these facts show we have championed tourism and will continue to do so wherever we are allowed to fly and compete.
Examples of lack of reciprocity

Now, let me cite a few examples of the consequences of non-reciprocity:

Seat limitations skewed to favor foreign carriers over local carriers. The existing agreement between the Philippines and Hong Kong limits local carriers to only 2,500 seats per week on the Hong Kong-Cebu route; Hong Kong carriers get the same number. Under EO 29, Philippine carriers will still be limited to 2,500 per week but all Hong Kong carriers can now fly this route without any limit.
Exhaustion of air rights in major destinations and routes.

An early EO in 2008 declaring “open skies” sans reciprocity in Clark resulted in Hong Kong Express flying into Clark without limitations. CEB was unable to compete because air rights to Hong Kong were fully utilized at that time. CEB could not use Clark unless it reduced its HK services from Cebu. This was solved only after subsequent bilateral air talks resulted in additional air rights. This undue delay in CEB’s ability to compete with a foreign carrier should not have happened if reciprocity was in place. CEB has been flying to HK everyday since and offering the lowest fares out of Clark.

Inability to offer lower fares to potential high yield tourist markets. Japan has always been considered a major tourism market. Currently CEB flies to Osaka three times weekly. We have been asking for additional flights to Osaka which the Philippines is entitled to under the current Philippine-Japan Air Services Agreement. However our request, to this day, has not been approved. In the meantime, All Nippon Airways (ANA) was recently allowed to come in and operate flights from Tokyo to Manila under the very same Air Services Agreement. This is another example of the lack of reciprocity.
Example where reciprocity worked

A notable success story that we think we can build on and use as model is Korea:

In 2007, the Philippines negotiated a new air services agreement with South Korea, raising the capacity limit for each country to 19,000 seats a week almost a three-fold jump from the previous limit of 6,800.

As a result, today, we compete with Korean carriers on Incheon and Busan routes, and airlines such as Korean Air, Asiana, Air Busan, and Jeju Air are adding flights into the Philippines. Korea today is the country’s No. 1 source of tourists.
Moving forward

We propose that we move on these three fronts to realize quick wins:

Japan open skies—Japan had signed open skies agreements this year with Singapore, Malaysia, and South Korea; and with the US late last year. It took their respective governments an average of just more than a month to finalize these agreements. Japan is open to more such agreements with ASEAN and this presents an opportunity the Philippines must grab quickly.

Asean open skies—There are currently efforts to have an Asean Open Skies regime but the Philippines and Indonesia remain as holdouts. If we sign this, the region will be open to each country’s carriers on an equal footing. This is a regional effort which I think will work better than a unilateral approach.

Middle East and Europe open skies—We also support reciprocal open skies agreements with regions like the Middle East and Europe where Philippine carriers don’t fly to today provided of course we can, if and when we are ready.

CEB position

Let me just quickly repeat our position:

We welcome and support EO 29, the opening of all Philippine airports, except Manila, to all foreign carriers. However, we would like, to also be given the opportunity to compete with these foreign carriers on those same routes, and offer our trademark low fares not only to their nationals/tourists but to our own OFWs as well who live or work there. This is reciprocity and is most fair.

EO29 also offers to foreign carriers unlimited ‘fifth freedom rights’. We have no issue with this provided their governments allow us the same opportunity. We believe the requested reciprocity can be accommodated in EO 29’s implementing rules and regulations.

We are not asking for special favors. We became the Philippines’ largest National Flag Carrier without any. We have invested heavily in the country, employ more than 4,000 Filipinos and we have given every Juan the opportunity to fly with our low fares. All we ask for is the opportunity to compete on a level playing field.

Let us have Open Skies for all, not Open Skies for foreign airlines and Closed Skies for Filipino carriers.

(Gokongwei, president of Cebu Pacific, made this statement in a recent forum.)

Sleepless at NAIA Control

By Rudy Santos

April 18, 2011

MANILA, Philippines - US air traffic controllers falling asleep on the job are not the only airport workers feeling overworked.

The Ninoy Aquino International Airport (NAIA) Terminal 2 management is having difficulty getting ramp air controllers to report for work as they dont’t know when they can next sign off.

It was learned that some ramp controllers work continuously for days without any replacement – the same predicament of some of their counterparts in the US.

Overworked and harassed air controllers are accident baits, aviation experts have warned.

The root of the problem is low salary.

Ramp controllers are licensed air traffic controllers doing the no less risky but unglamorous job of assigning aircraft their proper parking berth, preparing schedules when planes have to be towed out of the terminal to find their proper slot in a maze of departing and arriving airplanes.

Modern passenger air terminals have become so complex that ramp control is now a necessity.

Sometimes there are four of them --as in the NAIA -- untangling ground traffic, giving coherence to the crisscrossing traffic, and avoiding disaster on the ground.

The problem came into view following reports of air traffic controllers in the US sleeping on the job while airplanes land unassisted.

It turned out that many US airports are employing only one technical expert in the graveyard shift, putting in peril the lives of the flying public.

The uproar exposed what had been a long-kept secret in US aviation, that usually one air controller rules the night shift, roughly from 11 p.m. to 7 a.m. the next day.

The idea is to have at least two air controllers during the graveyard shift.

The problem was highlighted by the incident where an Airbus 380 taxiing at the New York Kennedy Airport clipped the tail of a twin-engine commuter jet improperly parked.

At the NAIA 2 last Friday, one ramp controller had to stay on duty for 24 hours because his relief had either refused to report for work, was late, or many of them felt burned out.

The NAIA has four sets of ramp controllers, one each at NAIA 1, 2 3 and the Manila Domestic Airport. All of them operate 24 hours a day.

Regular air controllers, the top guns of the lot, are assigned at the control tower or radar duty, actually directing air traffic to avoid collision, or getting planes through the maze of airways and air routes, safely and with the least delay.

Tardiness or absenteeism at the ramp control has been going on for some time but authorities, instead of addressing the problem, threatened the truant workers that they would be replaced by Air Force personnel doing the same job in obscure military air fields.

The threat doesn’t discourage the ramp workers, knowing that Air Force personnel couldn’t cope with the job. It has been done before, when air controllers went on strike years ago and Air Force controllers had to give up, overwhelmed by the volume of traffic and the necessary skills of running a commercial airport, where at least 1,000 landing and takeoffs a day are part of the territory.

Currently, NAIA 2 ramp controllers receive P13,000 monthly. They are requesting the Manila International Airport Authority (MIAA) to ratchet up their salary to the level of their colleagues’ at the Civil Aviation Authority of the Philippines (CAAP), whose lowest entry salary is P28,000 a month.

Ramp controllers are asking at least P22,000 a month.

Most of the ramp controllers at NAIA 2 are former employees of the defunct Air Traffic Transportation Office (ATO).

After years of work abroad, they offered their services and expertise to the MIAA, even at lower wages.

The MIAA, on the other hand, could not get outsiders, because the law requires licensed air traffic controllers, which are not readily available.

“Air Traffic Controllers are the most difficult job to get locally,” one study shows. Most of them have gone abroad and are getting about $1,000 to $1,500 monthly income.

The problem needs a speedy solution, experts pointed out. Delays are now common, part of the perceived slowdown by ramp controllers apparently to force the authorities to act on their demands.

One of their demands is to increase the personnel on duty to five. Currently there are three air controllers per shift, two on duty, and one or two on standby, resting or sleeping. They take turns on the job after every two hours to ease the pressure.

When one of two of them is absent, only one is left with a daily reality to prevent aircraft collision on the ground, such as what happened recently in the US.

Open skies

The Real Deal

By Artemio V. Panganiban
First posted at the Philippine Daily Inquirer

April 15, 2011

TO BOOST tourism, investments and the economy in general, President Aquino recently issued Executive Order (EO) 29 “authorizing the Civil Aeronautics Board (CAB) and the Philippine Air Panels to pursue more aggressively the international civil aviation liberalization policy.” Popularly known as “open skies,” this policy allows foreign carriers to access our “country’s airports other than the Ninoy Aquino International Airport (NAIA).”

Tourism and civil aviation. Immediately, the country’s air carriers – notably Philippines Airlines and Cebu Pacific – declared that while they fully support the tourism industry, the opening of our skies should not impoverish Philippine aviation. It should be subject to the principle of reciprocity. Simply stated, reciprocity means that the advantages granted to foreign carriers should be matched or reciprocated by similar benefits given to local airlines by the home state of the alien carrier.

Tourism and aviation are natural partners. The colossal tourism success of our neighbors was achieved in close collaboration with their national carriers. The phenomenal growth of tourist arrivals in Singapore, Hong Kong, Malaysia and Thailand is matched only by the spectacular rise of Singapore Airlines, Cathay Pacific, Malaysian Air and Thai International as the very best airlines of the world. Statistics show invariably that national carriers always bring in the most arrivals to their home countries.

By itself, open skies has no track record of automatically bringing in tourists in any country. Several other factors must be concurrently undertaken. For example, do we have enough hotels, resorts and lodging houses of the quality and price appropriate for the type of tourists open skies will bring? Do we have the infrastructures, like airport terminals and roads, to support the arrivals? Is there peace and security in the tourist destinations we want to open up?

Reciprocity and fairness. This paper’s editorial on March 26 stressed that reciprocity, while not mentioned in EO 29, is “only fair and just” and “the country’s representatives [who will implement the EO] must be clear and unwavering on that one condition.”

In his letter to the Inquirer published on March 30, CAB Deputy Executive Director Porvenir P. Porciuncula clarified that EO 29 “clearly recognizes” the constitutional principle mandating “equality and reciprocity” in “all forms and arrangements of exchange.”

He added that Republic Act 776 bars “unjust discrimination, undue preferences or advantages or unfair or destructive competitive practices… Hence, the local air carriers are rest assured that in the implementation of EO 29, the CAB will be fair and just…”

Freedoms, frequencies, etc. Aviation agreements are normally negotiated between countries by “air panels.” After concluding their negotiations, air panels execute Air Services Agreements (ASAs). EO 29 authorizes the Philippine Air Panels to “offer and promote third, fourth, and fifth freedom rights… without restriction as to frequency, capacity and type of aircraft, and other arrangements that will serve the national interest.”

“Third freedom” refers to the right given foreign carriers to disembark passengers coming from their home state to the Philippines. Example: a US carrier brings traffic from the United States to the Philippines. “Fourth freedom” refers to the right given foreign carriers to board passengers from the Philippines to the carriers’ home state. Example: a US carrier carries passengers from the Philippines to the United States.

Most highly desired, “fifth freedom” refers to the right given foreign carriers to pick up passengers in the Philippines destined for a third state and vice-versa. Example: a US carrier bound for the Philippines picks up passengers from Japan and brings them to the Philippines; and then picks up passengers in the Philippines and disembarks them in Japan.

These third, fourth and fifth freedom rights are normally exchanged between countries on strict reciprocity. However, EO 29 allows the Philippine Air Panels “to offer and promote” these freedoms “without restriction [i.e., without reciprocity] as to frequency, capacity, and type of aircraft, and other arrangements that will serve the national interest as may be determined by the CAB.”

Example: Say an ASA with state XX grants designated carriers from both the Philippines and XX third and fourth freedom rights with one frequency a week, via narrow body aircrafts with 100 seats. Despite these limitations and without asking any reciprocal rights, the Philippines may – in the national interest – unilaterally grant XX carriers several more frequencies a week, via wide-body jumbo jets with 400 seats.

As part of the President’s program to enhance the economy, open skies aims to boost tourism and investments. Foreign airlines that bring new tourists untapped by Philippine carriers are truly welcome. However, if they merely pouch on the markets already fully served by local carriers, it would be foolhardy to welcome and reward them via EO 29.

Highfalutin’ rhetoric in praise of reciprocity there will always be. But the reality is in the implementation, given the complexities of aviation freedoms, frequencies, capacities, routes, etc. Like natural resources, civil aviation rights form part of the nation’s wealth that must be carefully and strategically used. Ultimately, the “national interest” standard will be invoked vis-à-vis the ability of a foreign carrier to increase traffic to the Philippines from untapped new markets and routes, and not from stealing the existing traffic painstakingly developed by local airlines.

Comments are welcome at chiefjusticepanganiban@hotmail.com

What Reciprocal Rights?

We can't even fly more to Japan - Lance

April 15, 2011

Cebu Pacific CEO Lance Y. Gokongwei questioned yesterday the draft implementing rules of Executive Order 29 adopting a pocket open skies policy which did not incorporate truly their concern over the lack of reciprocal rights under the said order which declared an Open Skies policy for all our airports, except Manila.

He said that while the Philippines should pursue open skies, specifically with Japan, the Asean, Middle East and Europe it has to be under the principle of reciprocity, Cebu Pacific CEO Lance Y. Gokongwei declared Thursday.

But “Let us have Open Skies for all, not Open Skies for foreign airlines and Closed Skies for Filipino carriers.” Gokongwei said.

He added that the provisions of Rule IV under the draft IRR EO 29 (transformation of operating rights into traffic rights) tend to contradict each other.

For example, Rule 4.1 of the draft IRR provides that the Philippine Air Panels (PAR) and the Civil Aeronautics Board (CAB) shall hold talks with the respective states of registry of the carriers operating under EO 29 for the conversion of operating rights into traffic rights. This, the rule said, shall include the inclusion of reciprocal grant to Philippine carriers of equivalent traffic rights by the said states.

Rule 4.2, meanwhile, provides that the CAB, in case of failure to reach mutual agreement to grant reciprocal rights to Philippine carriers within 12 months from the grant mentioned in the preceding rules, may revoke the conversion of operating rights into traffic rights.

"The contradiction however lies under Rules 4.3 and 4.4." Gokongwei said.

According to Rule 4.3, notwithstanding the non-inclusion of traffic rights mentioned in Rule 4.1 in the relevant air service agreement (ASA), the CAB may continue to allow operation of traffic rights under EO 29 if it deems it to promote national interest and/or mutual benefits.

Rule 4.4, on the other hand, says the CAB reserves the right to revoke, suspend, or restrict operations granted in the event the state of registry of the foreign carrier operating under this grant failed to extend reciprocal rights and/or equal opportunity to Philippine carriers.

Gokongwei said the government has to explain why it had to include in the draft IRR Rules 4.3 and 4.4 which contradict the reciprocity rule provided in Rules 4.1 and 4.2

The Air Service Agreements (ASA), or bilaterals, governs the civil aviation relationship between states that are parties to it. Traffic rights, meanwhile, is a market access right which specifies who or what may be transported over an authorized route or parts thereof in the aircraft.

A foreign air carrier’s permit (FACP) is a permit issued by the CAB and approved by the President which authorizes a foreign carrier to engage in foreign air transportation. A temporary operating permit (TOP), on the one hand, is the authorization issued by the CAB for a fixed term for the operation of scheduled or non-scheduled services by an air carrier pending the issuance of a FACP.

An FACP or TOP is a condition before any foreign carrier is granted operating rights under EO 29.

EO 29 seeks to further liberalize civil aviation in the Philippines, specifically to airports other that the Ninoy Aquino International Airport (NAIA) and “to promote a more liberalized policy for the expansion of direct air services, both passenger and cargo to secondary gateways outside of Metro Manila in order to advance domestic tourism…”

It provides that the Philippine Air Panel may offer third, fourth or fifth freedom traffic rights without restrictions on frequency, capacity and type of aircraft and other arrangements in the consideration of national interest as may be determined by the CAB.

The third freedom gives the right to fly from one’s own country to another while the fourth freedom covers the right to fly from another country to one’s own. The fifth freedom is the right to carry passengers from one’s own country to a second country, and from that country to a third country.

"If foreign carriers are given unlimited access on routes to and from the Philippines, we believe it is only fair, that CEB and other local airlines be given unlimited access to and from the Philippines to these carriers’ home countries, on an equal opportunity of access; on a level playing field" Gokongwei stressed.

"We should be allowed to compete with these foreign carriers on those same routes, and offer our trademark low fares not only to their nationals/tourists but to our own OFWs as well who live or work there. This is reciprocity and is most fair".

"But with Japan blocking our way to do that, where is reciprocity there?" Gokongwei said.

He complained that they cannot even get an authority to fly more flights to Osaka yet the Philippine government did not protest on the flight of ANA into the country.

Not the worst airport

April 15, 2011

Two recent stories about the Philippines caught my attention the other day. From the Inquirer: “Naia 1 rated among world’s 10 worst airports” and “Philippines tops Googles’ places-to-visit search list.”

As airports go, Ninoy Aquino International Airport (Naia) Terminal 1 is “one of the world’s 10 worst airports and the worst in Asia in 2010.” As a resort destination that people search on Google, “The Philippines ranked on top of a list of ‘resorts’ that people all over the world look for on Google.com” and “The Philippines was the highest-ranked country from Asia.”

What that means, I guess, is that tourists want to come here for the Philippines’ resorts, but hate the airport when they get here.

On the Google list, the Philippines topped; Fiji, South Africa, India, Singapore, the United States, Trinidad and Tobago, Iraq, Canada and Namibia.

On the list of worst airports, the Philippines came in at No. 5, below Charles de Gaulle and Beauvais in Paris, France; Moscow’s Sheremetyevo, and Los Angeles International Airport. The winners were Singapore’s Changi, Incheon in Korea, Hong Kong, Amsterdam’s Schiphol and Munich, Germany’s airport. Is there any reason why the best airports are those frequently used by Filipino tourists and overseas workers?

There is no reason to dispute the Google list, although searching for vacation destinations in Iraq may be a little premature.

As far as airports go, it is not surprising to see Manila’s Terminal 1 on the “worst” list. But then again, personally, I have been in about 50 airports around the world, and I think they are all about the same with good and bad qualities. In Moscow, back in the days of the Soviet Union, instead of a prayer room was an area where you could read free literature about how wonderful the communist state was doing. I flew there from Singapore on the national carrier Aeroflot. The flight was delayed for three hours waiting for the wife of some important Soviet official who was finishing her Singapore shopping spree. So much for the equality of the “worker’s paradise.”

I was intrigued, though, why Manila would rank higher (or lower on the “worst” list) than Los Angeles.

The negative reviews about our airport came from a web site called sleepinginairports.net, which bills itself as “The Guide to Sleeping in Airports,” “For travelers who are really on a budget and are looking for a way to skim a few bucks off their travel expenses, why not consider sleeping in an airport?”

I do not know about you, but looking for and evaluating an airport for its sleeping qualities is just about the last thing I want to do. Sleeping in an airport is what you do when your hotel checkout time is 2 p.m. and the flight leaves at midnight. Or when you have a three-hour layover to change flights at 3 a.m. to get to Manila before dinnertime.

Here are comments from sleepinginairports.net. Paris Charles de Gaulle Airport: “The washrooms were dirty and had a really rank smell.” Moscow Sheremetyevo Airport: “The atmosphere in the terminal building is awful; it’s dark like cave, dirty and small space.” Los Angeles Airport: “I couldn’t relieve myself in the terminal bathroom because the stench was so horrible.” Manila Ninoy Aquino Airport: “Think of a bombed-out ruin and you’ll get some idea. Do not try to sleep in this airport.”

So Naia is the fifth worst airport in the world (and the worst in Asia) if you are too cheap or too broke that you need to sleep in an airport.

This story should have been treated like the joke it is and treated a little less seriously. Naia Terminal 1 is certainly old and a poor gateway to the country. I think that is why Terminal 3 was built. And the comments about the new terminal were positive even from the “sleepers.” “After nearly three months traveling in SE Asia, Terminal 3 was excellent.” “Terminal 3 has so many seats and good Wi-Fi.” “Clean, neat, lots of seats, toilets are clean, security is bored but friendly, and the food places are reasonable.”

But even Terminal 1 is better for sleeping than Paris, Moscow and Los Angeles. That should count for something positive if any one cares.

Something else is interesting about the ‘best’ and ‘worst’

Each of the airports considered “best” are operated by private companies, with responsibility to shareholders and founded with the purpose of making old-fashioned capitalist profits.

Singapore’s Changi Airport is operated by Changi Airport Group, a private for-profit company. Incheon International Airport Corp. (IIAC) operates Incheon International Airport for profit and is going to be privatized and publicly listed. Hong Kong’s Lantau airport is operated by the Airport Authority Hong Kong and intends to be publicly listed soon and currently receives no financial assistance from the government. Flughafen Muenchen GmbH (Munich) is an international private company. Schiphol Group, a private for-profit company operates Amsterdam’s airport.

Los Angeles International is operated by Los Angeles World Airports, which is the airport oversight and operations department for the city of Los Angeles. Moscow airport’s operator, Sheremetyevo International Airport, is a corporation not designed to make a profit. France’s Beauvais is operated by the Chambre de Commerce et d’Industrie de l’Oise, a nonprofit organization. Manila’s Terminal 1 is operated by a government agency, the Manila International Airport Authority, a branch of the Department of Transportation and Communications.

Only Charles de Gaulle Airport is privately operated by publicly listed French company Aéroports de Paris Group.

My personal opinion is that the natural pride of the Filipino (not government operational control), given the right tools and facilities to work with, has allowed Terminal 3 to be highly rated.

“Progressive” liberal thinkers who believe that the government and only the government should determine consumer prices, provide subsidies, manage the food supply, and otherwise control the economy, might do well to provide examples where this economic model ever works. - Businessmirror -

E-mail comments to mangun@gmail.com.

PAF helicopter down

5 crewmen injured

April 14, 2011

MANILA, Philippines - Two military pilots and three crewmembers were injured after their training helicopter crashed in Taytay, Rizal yesterday.

Air Force spokesman Lt. Col. Miguel Okol said the pilot, Lt. Col. Roberto Bitas, and his co-pilot, 1Lt. Paul Ryan Yu, along with three crewmembers, Airman 2nd Class Elias Alinday Jr., Sgt. Edmund Cubillan and S/Sgt Ruel Realin, suffered minor injuries after their training helicopter crashed in Barangay San Isidro, Taytay at about 9:50 a.m.

Okol said the five were on a routine training when their UH-IH “Huey” helicopter suddenly lost power and went down on a hard landing.

The helicopter’s rotor was totally damaged as the aircraft landed on its side, Okol said.

The five men on board the Vietnam-era helicopter came from Villamor Air Base and Sangley Point in Cavite and were proceeding to Rizal as part of Yu’s pilot training qualification course.

Okol said a safety team has been dispatched to the crash site to investigate the cause of the accident.

Rizal provincial police director Senior Superintendent Cezar Prieto said the helicopter made an emergency landing at a vacant lot along Daan Putol in Barangay San Isidro.

Prieto said policemen are helping the Air Force team in investigating the cause of the crash.

The helicopter, with tail no. 662, is one of the two Hueys under the Air Force’s 505th rescue unit.

The aging UH-1H helicopters are the workhorses of the Armed Forces of the Philippines (AFP) in its anti-insurgency and anti-terrorism as well as search and rescue operations, especially in conflict and disaster-prone areas in Mindanao.

Around 20 Huey helicopters from the 38 in the Air Force inventory are still serviceable, but a number of them have figured in accidents in the past.

Following the mishap, Air Force chief Lt. Gen. Oscar Rabena ordered an inspection of all UH-1Hs in its inventory, Okol said.

NAIA 1 voted worst airport in Asia

5th Worst airport in the World

April 12, 2011

MANILA, Philippines – “A bombed out ruin,” “a cattle yard only worse,” and “filthy toilets” were just some words that travelers used to describe the Ninoy Aquino International Airport, voted one of the world's 10 worst airports and the worst in Asia for 2010 by an interactive website.

The website, “the Guide to Sleeping in Airports,” ranked NAIA, particularly Terminal 1, fifth worst in the world preceded by two French airports, including the Paris Charles De Gaulle, and the Los Angeles and Moscow airports.

In the website’s list of worst airports in Asia, NAIA Terminal ranked No. 1, followed by New Delhi, Beijing, Bombay, Islamabad, Hanoi, Chennai, Jakarta, Bangalore and Denpasar.

The ranking was based on reviews of air travelers who complained of, among others, “safety concerns, lack of comfortable seating, rude staff, hostile security, poor facilities, no [or few] services to pass the time, bribery, and general hassles of being in the airport.”

Two lists of the best and the worst airports are updated annually by the website (http://sleepinginairports.net), which travel agent Donna McSherry started in 1996.

NAIA actually moved two places up in the worst airports list. In 2009, it was ranked seventh. Two other Asian airports made it to the worst list in 2010, both from India, in New Delhi and Bombay at sixth and eighth, respectively.

On the other hand, the world's three best airports in 2010, according to the website, were also in Asia: Singapore Changi, Seoul Incheon, and Hong Kong, the same top three the previous year.

Most complaints about NAIA concerned the old Terminal 1, which hosts all international flights except those by Philippine Airlines, which uses Terminal 2, and Cebu Pacific, Air Philippines, and All Nippon Airways, which uses Terminal 3.

A reviewer named Brenty said of NAIA: “It has to be experienced to be believed. Think of a bombed out ruin and you'll get some idea. It's like a cattle yard only worse. Toilets filthy. No seating once you get thru customs [maybe 40 seats for a thousand passengers].”

“Bribery and corruption in this airport is rife and the scams start the minute you walk off the plane,” said another who called himself Mecanix.

The website, however, did acknowledge that “there is hope at this airport if you go to Terminal 3 where it is clean, spacious and has Internet connection.”

Manila International Airport Authority General Manager Jose Angel Honrado said he respected the feedback from travelers, but added that he hoped the general public would see the improvements at NAIA.

“We are aware of the deficiencies. We really appreciate the comments and we're trying to correct these things. But please understand that this will take time,” he said.

He also encouraged critics of NAIA to visit Terminal 1 again and take note of some of the upgrades. He said they should understand that renovating the 30-year-old terminal was not an easy thing.

Honrado noted efforts to renovate the rest rooms at Terminal 1 and plans to put in “a new carpet.” He also said coordination with immigration and customs offices would hopefully eradicate the bribery menace.

In the next few years, he said “definitely” all international flights would be moving to Terminal 3 in spite of legal troubles involving the claim of its builder, the Philippine International Air Terminals Co., which is seeking a compensation claim against the government.

Honrado said the government clearly had the mandate to operate Terminal 3, and he saw no reason to put off plans to develop it until it became fully operational within “one and a half years.” He, however, added that Terminal 1 would still likely be retained for “spillover” flights.

Kalibo still the fastest growing airport in 2010

Ozamiz following closely at number two

April 11, 2011

Kalibo International Airport retained the title as the country's fastest growing airport in two consecutive years, data from the Civil Aviation Authority (CAAP) showed.

The International airport in Panay island grew 57% at 1,005,845 in 2010 as compared t0 2009's figure of 615,024, followed closely by Davao and Mactan at 35 and 31.7%.

Meanwhile Ozamiz Labo Airport was adjudged as the country's fastest growing domestic airport (26%) followed by Cagayan de Oro (21%) besting other traditional growth airports of Butuan, Cotabato and Dipolog, all of which are considered as secondary class 1 airports for domestic destinations.

The once community airport in the south that was re-opened on July 8, 2007 registered 206,428 passengers from 1,057 aircraft movements and 2,839,732 kgs. of cargo traffic in 2010, an impressive leap from its 2008 data of of only 80, 289, and 125, 810 for 2009, which is equivalent to 150% increase in passenger traffic since the airports opening and 60% growth rate year on year basis.

The same data disclosed that Butuan and its neighboring Dipolog Airport suffered a decline of almost one percentile (.06) and (4%) respectively. Dipolog traffic dropped from its 2009 level of 188,664 to 181,386 in 2010. The opening of Pagadian airport last year recorded 26,082 passengers and surprisingly did not dampen the growth spurs for Ozamiz.

Kalibo International airport is expected to overtake its neighboring Iloilo airport, which now ranks as the fourth biggest airport in the Philippines based on passenger traffic by 2011

Ozamiz airport, which remained idle for more than 12 years was upgraded to the tune of only P84 million for its rehabilitation making it the country's most efficient government airport project to date, as compared to San Fernando's P565 million allocation for the upgrade of San Fernando Airport in La Union.

Ozamiz Airport Development Project meanwhile has a total price tag of P215-million, 100 million of which was already bidded out as of December 2010. Upon completion of the Development Project which DOTC said is slated for completion in 2014, it will have a 2,000 x 45 meter ICAO standard runway.

The Airport currently boast a 1,745-meter x 30-meter runway serviced by two airlines Cebu Pacific and Philippine Airlines, including its subsidiary Palexpress, with destinations to Manila and Cebu.

The busiest airport in the country is still Ninoy Aquino International Airport with 27 million, followed by Mactan International Airport at 5.7 million, and Bangoy International airport at 1.4 million.

PAL unions must recognize market reality

By Boo Chanco

April 11, 2011

I don’t know if the PAL rank and file union will strike this Holy Week to cause maximum headache to management even if it will guarantee maximum inconvenience to passengers out for a Holy Week break. Those of us whose holiday excursions involve a flight with PAL should probably have a Plan “B” just in case. I asked the Cebu Pacific people if they will honor a PAL ticket in such an emergency and they said they will be happy to do that but PAL must ask first. They have apparently offered in the past and got no reply from PAL. They are also almost fully booked by now for Holy Week.

Our poor flag carrier, Asia’s first, had been getting it pretty bad from their unions in recent weeks. They should all be working together instead. Everyone in PAL should realize that they are no longer the country’s number one airline, at least not in terms of number of passengers flown last year. They are now just number two and that’s why they must try even harder to please. Cebu Pacific is now the country’s largest carrier. Based on government statistics, Cebu Pacific last year flew 10,036,503 local and international passengers to PAL’s 9,259,982. In the domestic market, Cebu Pacific leads with 7,972,659 passengers to PAL’s 5,311,168. PAL still leads Cebu Pacific in the international market.

And guess what? Cebu Pacific flew more passengers with less staff. Cebu Pacific has 4,000 people working for it, about half of that are outsourced. The 2,000 staff members outsourced by Cebu Pacific are holding the same positions that PAL wants to outsource. There is just no way for PAL to continue to have 7,000 employees on its payroll. Aviation market conditions have changed so much and the older airlines, not just PAL, must do something about their so-called legacy costs or just simply lose out to more nimble competitors like Cebu Pacific.

The conditions just got tougher with our unilateral Open Skies declaration. There will be more regional budget airlines taking to our skies and it is important that PAL’s cost structure becomes more comparable to theirs. My Singapore-based son was able to fly to Manila on a whim one weekend on a roundtrip ticket costing him $150 on Tiger Air. I know PAL is trying to match such cut-throat competitors with $250 tickets but its ability to do so on a sustained basis is questionable unless it revamps its cost structure.

In the end, PAL must be financially viable for all its employees to continue to have jobs. If they are able to restructure PAL’s cost, a good part of the present employee force will continue to have jobs in the airline. But if they strike and PAL folds up, everything and everyone goes down the drain. Cebu Pacific, on the other hand, has already invested a billion dollars and planning to invest more.

Business organizations evolve and change in response to market conditions. That’s all there is to it. PAL’s present structure may have worked in the past when it was a monopoly. That is no longer the case. And there is no national interest that can justify a government takeover to save PAL. It is survival of the fittest in the marketplace and PAL is too financially unfit to survive the challenge of Cebu Pacific, Tiger Air, Air Asia and all those new budget carriers whose price structures we love as consumers. The PAL unions must help win this competitive challenge not by striking but by agreeing to restructure the airline.

DBM Clears 530 Million for airports in 2010

Dipolog Airport gets new 75 million Terminal Building

April 11, 2011

The Department of Budget and Management said over the weekend that President Aquino’s signal to release P1.065 billion for infrastructure development that covers airports, seaports and other facilities under the Department of Transportation and Communications.

The special allotment was released so the department can implement the projects during the tropical summer when weather conditions are right.

“The Aquino government is committed to invest properly in infrastructure projects. If done in the right way, these transportation infrastructure projects are expected to increase economic activities, such as tourism and trade of agricultural goods in various localities," Budget Secretary Florencio Abad said over the weekend.

Of the P1.065 billion, the department said P530.5 million is allotted to airports and navigational facilities, P284.5 million to seaports and lighthouses, and P250 million to rehabilitate the Philippine National Railways (PNR) commuter Line (Alabang-Calamba).

"Among the airport projects are the Alaminos Airport in Pangasinan (P75 million for government land acquisition), Dipolog New Airport Terminal Building in Zamboanga del Norte (P75 million for construction), San Vicente Airport in Palawan (P65 million), and Kalibo Airport in Aklan (P35 million for the rehabilitation of the Old Domestic Terminal)," the DBM said.

The seaport projects include the development of the Codon Roll-on, Roll-off Port in Catanduanes (P45.5 million), expansion of Placer Port in Surigao del Norte (P30 million) and development of the Lupon Port in Davao Oriental (P25 million).

These projects will help spur tourism and business activities in key destinations around the country, according to the Budget chief.

"Meanwhile, the PNR Commuter Line will provide a faster alternative for those commuting to work in Metro Manila from nearby provinces in the south," Abad said. GMA

Piper crashed in Baguio

Two Killed, four others injured

April 11, 2011

Two people were killed while four others were hurt Sunday after the six-seater Piper Aztec (RPC 5140) plane they were on crash landed on pine trees inside Camp John Hay complex in Baguio City at around 2:53 p.m.

Police Senior Inspector Ruben Porte, Baguio City Police Station 4 commander, identified the fatality initial fatality as Jose George and Grace Alvarez who expired at the Baguio General Hospital at around 6:30 p.m.

The other victims were identified as pilot Col. Reynaldo Garcia, Jose Miranda, Ness Guerrero and Basil Matthew.

According to Porte, the plane, which took off from Loakan Airport en route to Plaridel town in Bulacan, crashed near the horse-back riding station of the popular mountain resort.

Renee Gabuyog, a horseback-riding guide, said he saw the plane flying unusually low over the pine trees and then heard a loud thud followed by an explosion.

The aircraft was "totally burned," and firefighters from the area have already put out the fire caused by the plane crash, Porte added.

Porte said officials from the Civil Aviation Authority of the Philippines (CAAP) are already on the site to investigate the cause of the crash.

In 2005, a Cessna training plane also crashed minutes after taking off from Loakan Airport, killing four of its passengers.

Sky is no limit for lady pilot, elite athlete, classical pianist

PI's First Female Captain

April 07,2011

MANILA, Philippines—On the ground, Marie “Brooke” A. Castillo is a classical pianist, a rock band manager, an elite sportswoman and a teacher, but it is high in the sky where she truly excels.

Castillo is the country’s first female commercial jet captain, and from the cockpit of Cebu Pacific’s Airbus A319s and A320s, she said she had the best job in the world.

“I think I was destined to be here,” the tall and eloquent 41-year-old told Agence France-Presse in an interview, explaining that she realized her many other talents would take a back seat immediately after she got into aviation school.

“I just took up the challenge and I realized it was something that I would love to do, and that was it.”

Love for sports

Castillo grew up in a wealthy Manila household—her father was a banker and her mother managed a casino—alongside three brothers who helped instill in her a love for sports and competition.

Many hours of her childhood were spent with her family in ten-pin bowling alleys, and she ended up representing the country’s junior team in the sport.

She became a member of the Philippine youth basketball team and won a silver medal for her country as an adult at the Southeast Asian taekwondo championships.

Among her other hobbies and talents, Castillo plays classical piano, manages a local alternative rock band and has a business administration degree from the University of the Philippines.

Pilot tests

Castillo said she never aspired to be a pilot, but fell into the aviation industry soon after her college days when she accompanied a friend to a testing session for a pilot’s scholarship with national carrier Philippine Airlines.

Castillo took the tests as well and, while her friend failed, she aced them.

“When I went to aviation school, I realized everything that I learned from music, from my other endeavors in school and from sports—all of it—I was able to apply more than in my college subjects,” she said.

Her love of flying and her skills saw her become the first woman in the country to fly a commercial jet in 1996, with Philippine Airlines.

After crossing to rival Cebu Pacific, Castillo in 2003 became the first woman in the Philippines to captain a jet.

14 female pilots

Throughout her career, Castillo has blazed a trail for other women in the industry, with Cebu Pacific now boasting 14 other female pilots.

“Hopefully there will be more,” she said.

Castillo, who is now also an instructor for Cebu Pacific’s younger pilots, said she had earned her success on her merits, pointing out airline chiefs could not compromise when choosing captains for their jets.

“In our profession there are no double standards because you cannot afford to put anyone’s life in danger,” she said.

Castillo suggested women had an advantage because they tended to pay closer attention to the smallest details. A pilot needs to check more than 200 items before an actual flight.


“They say that women are more meticulous and more into multitasking. Probably that’s true. In some instances I see it,” Castillo said.

Be they Piper Tomahawk trainers or Airbus jets, the hardest aspect of flying was deciding when to take off and land or abort, because the tiniest hesitation could swiftly lead to life or death situations, Castillo said.

Her most dangerous moment was as a DC-9 co-pilot nine years ago, when the cabin lost compression in mid-flight. She said her professional training took over and the plane landed safely.

“The thing that I learned from that was that you don’t feel the fear until it’s over,” she said. “After you land and everything, that’s when you catch the fear.”

Castillo’s remaining professional ambition is to captain larger, wide-bodied Airbus aircraft, a dream she will likely fulfil as her employers, now the country’s biggest airline, push aggressively into international markets.

Still unmarried

She also said she wanted to marry and have a child someday. But she has had trouble finding the time for such personal matters and sees herself flying and instructing until she turns 65, Cebu Pacific’s retirement age for pilots.

“I hope, I wish, but I really can’t see how,” she said when asked about marriage and a family.

“Honestly I’m enjoying my flying career and I am enjoying teaching. Being an instructor, in a way, is fulfilling to me, and in a way it’s making me think, ‘Should I give it up for anything else?”