PAL Prepares Direct JFK flight in 2016

29 September 2015

Flag carrier Philippine Airlines (PAL) will fly direct to New York City next year, says its President Thursday.

PAL president Jaime Bautista said the carrier is seeking the necessary regulatory approvals for polar route operation between Manila and New York effective October of 2016.

“We can fly nonstop using the Boeing 777s to New York,” Bautista said.

The airline has already filed with the Civil Aviation Authority of the Philippines (CAAP), Russian and Canadian regulators, as well as from the Federal Aviation Administration (FAA) for the necessary permits which will fly them towards the north pole.

“We need approvals to fly over the North Pole,” Bautista said.

He said the permit will also benefit direct Toronto flights in the future when there is already sufficient demand.

PAL currently flies Manila to New York and Toronto services, via stopovers in Vancouver, Canada.

Bautista added there are no new routes planned in the US, other than the proposed JFK direct flight at the moment. He further said that they would increase flight frequencies to New York, Los Angeles and San Francisco, and Honolulu soon.

RP-C3288 Lands In Beach

28 September 2015


A cessna plane (RP-C3288) made an emergency landing at the shoreline near the Amontilado Resort in Barangay Bulak, Dauin town, Negros Oriental at around 3:40 p.m. yesterday, after it lost power, a police report said.

The plane's pilot was identified as Jimmy Chacko Dommen, 29, single, an Indian national residing in Bantayan, Dumaguete City, while the passenger was named as Rolando Almido Soliva, 63, married, of Sta. Isabel, Dipolog City, a Filipino who owns the plane.

They were both unharmed, reports said.

The plane was travelling from Dumaguete City to Dipolog when it lost its engine power but was able to make an emergency landing at the shoreline in Dauin. The plane incurred major damage and due to be written-off. JFP

MNL Still Closed for ASEAN Integration

18 September 2015

PHL delaying Asean open skies

By Ma. Stella F. Arnaldo

THE Philippines remains as the last holdout to signing the open-skies aviation policy for the Association of Southeast Asian Nations (Asean), one of the key measures to ensure air connectivity and increased visitor arrivals in the region.

Aileen Clemente, president of the Asean Travel Association (Aseanta), made this revelation during the recent Third Philippines Tourism Forum, and urged the Aquino administration to ratify the policy immediately. “Our signing is, first of all, symbolic—that we are already willing to be taken as Asean and that [we are prioritizing] economic benefits over protectionism,” she later told the BusinessMirror.

She added that being an archipelago, the country “will need connectivity with our neighbors as we grow tourism in the Philippines, as well as trade and business.”

Clemente, who is also president of Rajah Travel Corp., noted that the goal of Asean’s current tourism strategic plan is to “provide an increasing number of visitors to the region with authentic and diverse products, enhanced connectivity, a safe and secure environment, increased quality of services, while, at the same time, ensuring an increased quality of life and opportunities for residents through responsible and sustainable tourism development by working effectively with a wide range of stakeholders,” by 2015.

The Aseanta, is a nonprofit tourism association formed in 1971, which is composed of public and private tourism sector organizations from the Asean, such as national tourism organizations (e.g., the Philippines’s Department of Tourism), airlines, travel associations, and hotel and restaurant associations. One of its goals is to support and help implement the Asean strategic tourism plan—a road map to ensure that the region remains a successful tourism destination.

The Department of Transportation and Communications, however, could not say when the Philippines would ratify the said policy, which should have been implemented this year, in preparation of the integration of Asean into one economic community.

In a brief text exchange with Transportation Secretary Joseph Emilio Aguinaldo Abaya, he said “a check with the Office of the President is that the Department of Foreign Affairs [DFA] has some modification on the ratification document.”

Asked what these modifications were, he said: “To make clear that the protocols are subject to slots in Manila, which I understood from the start is written into the agreement.” The protocols refer to opening up third, fourth, and fifth freedom rights for foreign carriers flying into capitals, for instance, the Ninoy Aquino International Airport (Naia) in Manila.

But he stressed that “clearly the decision and policy of government is ratification,” but failed to say when this would happen. Abaya said he would follow up the issue with the DFA.

Clemente, countered however, that “the excuse that there are no slots in the Naia is isolated from the principle of open skies.” She pointed out that Indonesia already signed [the protocols] even if the Jakarta airport currently doesn’t have slots to provide [foreign carriers].”

About half of the Asean population of 600 million lives in Indonesia, making it an important signatory to the region’s open-skies protocols.

The DOTC chairs the Philippine Air Consultation Panel, which negotiates air-service agreements with other countries. While the Aquino administration continues to protect Manila, it frees up flying rights of foreign carriers in secondary cities or other provincial capitals

The Asean open-skies policy, or Asean Single Aviation Market (Asean-SAM), guarantees third and fourth freedom rights, which allow carriers to fly from their home country to another foreign country, sans government approval.

It also ensures fifth freedom rights, allowing any carrier to fly between two foreign countries during flights originating or ending in said airline’s home country. This means, a Philippine carrier can offer return flights between Manila and Kuala Lumpur, then onward to Bangkok.

The document is silent on seventh freedom rights that will allow a carrier to fly between two foreign countries, even if said carrier isn’t offering flights in its home country.

Even Tourism Secretary Ramon Jimenez Jr. expressed support for the Asean open- skies policy, saying it would afford greater connectivity in the region and benefit the Philippines. In a text message, he said: “Absolutely. I believe that, with the right preparation, the Philippines could benefit in terms of tourist arrivals. Anything that makes it easy/efficient for people to get to, pass through and leave from the Philippines will add to arrivals. Whether our airlines are prepared to compete on this basis may be another story.”

Clemente stressed further that it was time for government to think of the economic benefits of signing on to the Asean-SAM. “Connectivity is inclusive of intra- and inter-country and islands. If the current hub for air traffic is mostly connected via Manila—that’s where most foreign carriers can go. But if it can also be allowed that all carriers can pick up from multiple points within the Philippines, this then becomes economically beneficial and assists in the decongestion of one airport.”

She added that if the government’s goal is to make the Philippines a major tourism destination in Asean and the world, then all its regulatory agencies must support that one common vision. “Our goals should be beyond our businesses and be beyond the scope of each department in government, but rather, everyone must take one vision, one goal and work around it even if it means it gives up turfs or current areas of responsibilities—all these, bearing in mind, that we need safe, secure and seamless travel [to and around the islands].”

The 10 members of the Asean are Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Asean open skies will go on sans Manila OK
IT’S embarrassing.

This was the reaction of aviation expert Avelino Zapanta to the Philippines’s continued protection of Manila from foreign carriers, despite the rest of the member-nations of the Association of Southeast Asian Nations (Asean) agreeing to open up their capital cities.

“Nakakahiya nga, but it won’t stop the Asam [Asean-Single Aviation Market],” he opined. ASAM takes full effect in December 2015, as Asean becomes one economic community.

Zapanta, author of 100 Years of Philippine Aviation 1909-2009, the definite reference on airline management in the Philippines, also said the Asean open-skies policy will spur local airlines to offer more intra-Asean routes.

“I think some Philippine carriers will take advantage of Asam, like Cebu Pacific. It has the resources and it is aggressive. It has ordered more ATR72s, ideal for the noncapital cities of the other Asean countries, e.g., Zamboanga to Sandakan and Puerto Princesa to Kota Kinabalu, among many others. I think, PAL Express will do so, too. But the most aggressive will be Air Asia Zest, since Asam is right down the group’s alley.”

The Philippines continues to stall on the ratification of Protocols 5 and 6 of the 2009 Multilateral Agreement on Air Services (MAAS) that would give Asean airlines unlimited third, fourth and fifth freedom rights to operate between capital cities.

Zapanta, who is also president of the Southeast Asian Airlines International, a charter service, said the Civil Aeronautics Board “has proposed the ratification of Protocols 5 and 6, but it has not been acted upon by the President [Mr. Aquino].”

For its part, pioneering flag carrier Philippine Airlines (PAL) supports the Aquino administration’s protection of Naia in Manila, the main gateway of tourists to the Philippines, due to its congested runways and terminals.

But it added that it supports ASAM, as it opens up secondary airports as other tourism gateways to the Philippines.

In an e-mail, airline President and COO Jaime J. Bautista said: “PAL has supported Asean open skies as a way of stimulating the opening of direct airline routes to the Philippines’s tourist gateways. With PAL’s support, the Philippines ratified Asean open skies several years ago for services to all Philippine airports, except Naia; and, thus, any Asean airline can operate nonstop from any airport in the Asean region to Cebu, Clark, Davao, Laoag, Laguindingan, Bohol, Iloilo, Puerto Princesa and any other secondary airports in the country.”

He added: “The remaining obstacle is Manila, because the runways, terminals and facilities at Naia are currently overstressed in handling existing flights, much less any significant expansion of flights under any kind of open-skies arrangement. The government has rightfully held back from including Naia in the ratified Asean open- skies agreements, and, indeed, there is much work to be done to expand Naia or develop a new Manila airport before the Philippines could consider meaningful open skies. In the meantime, Asean airlines can serve the capital by flying to Clark.” Aileen Clemente, president of the Asean Tourism Association (Aseanta), earlier said the issue of having no more slots in Manila for foreign carriers and the principle of open skies should be separate from each other. She pointed out that “Indonesia already signed [the protocols], even if the Jakarta airport currently doesn’t have slots to provide [foreign carriers],” making the Philippines the last holdout to the region-wide agreement.

Aseanta is composed of public and private tourism-sector organizations from the Asean, which help implement the Asean strategic tourism plan—a road map to ensure that the region remains a successful tourism destination.

Zapanta, for his part, believes the rest of Asean will not press the Philippines to fully open its main gateway to foreign carriers, even if it will be the remaining country, which will continue to do so. “The other members of Asean will respect the limitation we imposed in the non-ratification of Protocols 5 and 6. They have the option to reciprocate the restriction, i.e., not giving the Philippines unlimited third, fourth and fifth [flying rights] in their capital cities, and keep within bilaterally agreed level of such traffic rights.”

Third and fourth freedom rights allow carriers to fly from their home country to another foreign country, sans government approval.

Fifth freedom rights allows any carrier to fly between two foreign countries during flights originating or ending in said airline’s home country.

Meanwhile, PAL said it was willing to compete under the ASAM but urged other Asean member- nations to privatize their flag carriers to make competition more equitable in the region.

“PAL is always able and willing to compete with airlines in Asean and all over the world,” said Bautista. “In Asean we’ve advocated a policy for each member-state to take the bold leap to privatize their flag carriers, so that their airlines can progress from state ownership and dependence to become normal business enterprises. That would make it more fair or equitable, as the Philippines is the only Asean member-state to have made those bold moves more than two decades ago.”

The 10 members of the Asean are Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

PHL-UAE air agreement to benefit Filipino consumers, But poses threat to local airlines

18 September 2015

by Lorenz S. Marasigan

Cheaper Fares

Rolando R. Zamora, 51, thinks about his family often. His work in Dubai as a site engineer is quite taxing, but it’s the only thing he can do to provide for his family.

He still remembers how hard it was to pack his bags that fateful Tuesday of July in 1992, when his youngest, then 9-month-old Nicole, was crying nonstop.

Zamora kept telling himself that leaving his family behind to seek greener pastures will allow his children to avoid the hardships he had to endure.

“It will be better,” he recalled saying to himself. “It will be better for all of us.”

“I didn’t want my kids to work behind counters at night just so they could finance their studies. I want them to have a good life,” the father of four said.

Despite his hesitation, Zamora left Manila for Dubai and has worked there ever since. He goes home to his family every year, bringing with him several boxes of gifts for his loved ones.

In 2003 he brought his family to Dubai and lived there for several years. But raising his kids in a foreign land—where his seemingly handsome salary according to Philippine standards was meager in the Middle East—proved to be harder than he thought.

So, after five years, Zamora and his family decided to go back to their home in Marikina City.

“It was a hard decision, but buying a plane ticket back to the Philippines and to Dubai is much cheaper than raising my family in the Middle East,” he said.

Zamora is just one of the thousands of overseas Filipino workers (OFWs) currently based in the Middle East who rely on cheap airline tickets to be with their loved ones in the Philippines as frequently as they want to.

Data from the Philippine Overseas Employment Administration showed that the Middle East remains as the top destination for OFWs in 2014. A total of 885,541 land-based workers were deployed to the Gulf last year. The figure is more than half of the 1.43 million overseas workers registered with the government.

“I get to save a lot of money from cheaper airline tickets. The few hundred riyals or so that I save from the fare, I use to buy more gifts for my family,” Zamora said.

Airline-ticket prices to the Middle East are expected to go down this year, thanks to the growing competition in the aviation market in the Philippines. Today, there are about seven local and international carriers flying directly to the Arab gulf.

Last month Manila and the United Arab Emirates (UAE) signed a new memorandum of agreement expanding the air-traffic rights between the two nations.

The parties agreed to increase the maximum number of flights per week for each country from the current 28 flights to 35, subject to the condition that the UAE carrier operating additional flights to Manila is bound to also operate separately to Clark or Cebu within one year from signing of the memorandum.

The conditional agreement, described by Civil Aeronautics Board Executive Director Carmelo L. Arcilla as “more or less fair” to both parties, aims to stimulate the traffic in developmental gateways outside Manila.

With the signing of the agreement, Filipino and Arab carriers may now expand their operations in the Gulf, intensifying the already-stiff competition in the said market. This will effectively lower the cost of fares to Gulf destinations.

Currently, a roundtrip ticket from Manila to Dubai costs about P53,130 in Philippine Airlines, P54,630 in Emirates and P31,029 in Cebu Pacific.

These rates could go down before the year ends, when Emirates and Etihad Airways are expected to mount more flights during the holidays.

“When you open the competition, it means that you will have more flights. The more flights you have, the more options you get, and the more choices you have, fares tend to go lower,” Arcilla said.

Lower fares are expected to be welcomed by both tourists and OFWs.

Tourism Secretary Ramon R. Jimenez Jr. said the increased capacity between the Philippines and the Arab gulf ultimately is “good news” for the country’s tourism sector.

“When you hear news that there are new seats, this is always good news. It just simply means that new people will come,” he said.

Jimenez characterized the Middle Eastern market as a huge market that is highly untapped by the Philippines.

“It is a gigantic market, yet few tourists visit the country. We’re marketing very heavily in these markets. We’re doing promotions and we are trying to encourage more seats,” Jimenez said.

During the first six months of the year, only 38,144 tourists from the Middle East visited the Philippines, contributing less than 2 percent to total visitor arrivals.

Also, the additional seat entitlements would mean better access to the Philippines for tourists from European markets, which go through Abu Dhabi and Dubai.

Emirates and Etihad are airlines that generally make use of the hub-and-spoke system, which is essentially a system of connections in which traffic moves along spokes connected to the hub at the center.

In the case of Emirates, the hub is the main airport in Dubai, and the spokes are scattered around the world like a chariot wheel.

Such a system has an exponential effect. It can connect Manila to more than 200 destinations around the world without having to have a direct connection to, say, a secluded city.

Tourism Promotions Board (TPB) Chief Operating Officer Domingo Ramon C. Enerio said his group expects to see development from the Scandinavian bloc and the Benelux countries, as well as traditional top visitor sources—the United Kingdom, Germany and France—thanks to the expanded seat capacity.

The European bloc contributed only 105,330 visitors to the 2.6 million tourist arrivals in the Philippines as of end-June. This means that the market contributed only 4.02 percent of total arrivals for the first six months of the year, way below the tourism department’s 10-percent to 15-percent target.

“It would be good to have this percentage grow exponentially in the next couple of years because they are a long-stay market, and they spend more. They’re a high-yield market,” Enerio said.

The tourism body expects to net P350 billion in tourism receipts this year.

Experts said, however, that while the tourism sector would benefit from the expansion of air-traffic rights between the Philippines and the UAE, this could pose a threat to Filipino carriers.

“The increase in frequency for UAE carriers generally favors tourism. It means more seats for foreign tourists no matter which airlines operate the capacity. That is why the travel and tour agencies, in contrast with the Philippine carriers, are rejoicing. The dilemma for the country is it might help improve tourism but at the expense of weakening its airlines,” Avelino L. Zapanta, an aviation expert, said.

Top OFW Destination
FILIPINO carriers have no problem competing with Middle Eastern airlines, especially since they have regained their footing financially. However, wrestling with giants that are backed by government funding will lead them back to the pit and the mire.

Generally, competition in the Philippine aviation sector is both intense and dynamic, as regulators had done a good job in providing consumers a wide range of choices in terms of air services. For example, a passenger going to London has at least 10 airlines to choose from —it all depends on his preference of route.

“There’s a real competition happening in the airline industry. There’s no indication that the players are doing anti-competitive activities unlike what’s generally perceived in the oil industry, whose players are suspected to be more a cartel than competing firms,” Avelino L. Zapanta, an aviation expert, said in an e-mail.

Philippine Airlines (PAL) President Jaime J. Bautista agreed, saying that his company has always been pushed by the competitive market to improve its services.

“Competition in the airline industry in the Philippines is both intense and dynamic. We have a hotly contested domestic market, more competitive than in neighboring countries. Internationally, PAL and other carriers have carefully built up a long-haul network that is a major step forward for the Philippines’s connectivity needs, though still a work in progress,” he said.

Cebu Pacific Long-Haul Division General Manager Alex B. Reyes said the aviation market is generally well-served by different airline structures, benefiting the passenger in the process.

“Regulators have successfully encouraged an environment where consumers are given multiple options to choose from. The Philippines is also very well-served by both legacy and low-cost carriers,” he said.

Both are competing with one another—domestically and internationally—and are competing with foreign carriers in many markets. Asia remains to be the top market that these two carriers serve, but the Middle East is one of growing sectors that the airlines want to tap.

After all, the Arab gulf is the top destination for overseas Filipino workers.

No guns, no glory

But competing with carriers from the United Arab Emirates (UAE) might prove to be too hard for both Philippine carriers. For one, their pockets don’t have enough money to aggressively expand their network, and their arsenals are a little far off compared to the bigger guns of Middle Eastern players.

Filipino carriers are not well-equipped to keep pace with the growth of Arab airlines. The Philippine carriers fly with only a few long-range aircraft, while their Middle Eastern counterparts enjoy the leisure of having a long-range fleet that is one of the largest in the world.

Middle Eastern carriers, likewise, enjoy government backing, as alleged by many of their competitors—not only in the Philippines, but also in the US.

“The issue of government subsidy to UAE carriers is very real and has always been there. Even the American carriers have raised that issue of subsidy against the UAE carriers, which have been spreading their wings in the Americas trouncing the US carriers in the competitive arena,” Zapanta said.

American carriers have been very vocal on their stance against Emirates, Etihad Airways and Qatar Airways, as they have allegedly received as much as $42 billion in subsidies from their governments.

United Airlines, Delta Airways and American Airlines, through the Partnership for Open and Fair Skies Coalition, has called on Washington to temporarily block new US-bound services of Arab carriers to protect them from the negative effect of an unfair market.

This is the same sentiment of Manila-based carriers, which said they are ready to compete against Middle Eastern carriers, but on one condition: the government should foster a healthy and competitive market.

“We can compete with any airline in the world so long as the playing field is level,” Bautista said, noting that his airline has been competing with airlines from the US, Japan, South Korea, China, Australian and Europe for quite some time now.

Reyes echoed Bautista’s statements, saying that his company is willing to work hand-in-hand with the government to ensure that there is a level playing filed in the market.

“Cebu Pacific welcomes competition, as it ultimately benefits our passengers. We continue to provide our services in the most efficient way we can, and work closely with the Philippine Civil Aeronautics Board, to ensure that we are competing on the same level playing field. We look to the Philippine government to promote the interests and further development of the Philippine aviation industry,” he said.

Emirates, however, belied these claims, with Emirates Divisional Senior Vice President for Commercial Operations, Far East and Australasia Region Barry Brown challenging the company’s detractors to review its financial health over the past few years.

“We have been, and continue to be, consistently transparent and open about our financials. Claims of subsidy and unfair competition are completely false and we have released a point-by-point, fact-based response that systematically disproves these allegations,” he said.

‘Worsened PHL carriers’ weak position’

Today, with the added capacity that Arab carriers are soon to enjoy, Filipino carriers will have to be quicker to innovate in order to at least try to catch up with their Middle Eastern peers.

“Ideally the Philippine government should have done its duty to prevent a further skewing of the market and the competitive arena; that’s a regulatory and public policy mandate. Now that unjustified excess rights were given to certain Middle East carriers, it falls on us, the airlines, to work harder,” Bautista said.

The recently signed agreement between the Philippines and the UAE increased the maximum number of flights per week for each country from the current 28 flights to 35.

Zapanta explained that the result of the recent air talks is clearly a gain on the part of the UAE airlines.

“It aggravated the already weak competitive position of the local carriers. Simply, the UAE carriers can absorb any amount of increase in traffic rights because their airlines are selling virtually all their destinations beyond their bases, i.e., Dubai for Emirates and Abu Dhabi for Etihad, and that is over 150 destinations for both within the Middle East and beyond to Europe and the Americas,” he said.

The expert added: “Our local carriers are selling virtually only Dubai in the case of Cebu Pacific and Abu Dhabi in the case of PAL. They cannot capture enough volume to fill up their current offered flights, for which reason no one wanted to operate the remaining unused seven flights a week.”

This will also affect their immediate plans in a negative way, as consumer preferences tend to favor that of the Middle Eastern brands.

“It will affect their plans badly. The UAE carriers will be able to offer more of the same, i.e., likely free overnight stopover in Dubai or Abu Dhabi and more connecting flights to destinations in Europe and beyond to destinations in the Americas, and in new widebody aircraft against the sardine-configured seats of Cebu Pacific and narrower seat pitch of PAL’s.

Tourists love to stopover in these intermediate airports because they have much to offer in terms of experiencing modern airports in great cities like paradise that sprout out of the desert,” he said.

Bautista agreed, saying that it will put pressure on almost all of its long-haul routes, as gulf carriers cater to markets outside their hubs.

“The recent air talks will put pressure on our new long-haul routes, especially Europe, Middle East and US or Canada east coast. We are set to launch new routes to Kuwait, Jeddah and Doha while building up our existing flights to Dubai, Abu Dhabi, Riyadh, Dammam, London and New York. All these routes will be affected by grants of unjustified capacity to UAE airlines that serve these markets via their home hub airports,” Bautista explained.

‘Weaker bottom lines’

Furthermore, the financial health of local carriers are now at higher risks, as Middle Eastern airlines will soon eat up their market share.

“While, the Middle East is not the only routes local airlines are operating, the intensified competition will not help enhance their bottom lines. On the contrary it would negatively affect it, unless they are able to find other routes and markets to compensate the Middle East debacle,” Zapanta said.

Given this, Bautista and Reyes could only hope for the best, and try to save what could still be saved from a phenomenon that they have been fearing for a while.

“We have to be extra nimble and innovative. They are greatly subsidized and protected from risk by regulatory shelters, domestic monopolies and government largesse,” Bautista said.


Truth be told: 
Competing with Middle Eastern carriers, ultimately, is a losing battle for local airlines; but no matter how stark the situation might look, there remains a tinge of hope for the underdogs.

But this speck of light will require airlines to double their efforts and expand their tents. This might even require them to fly to so-called uncharted territories.

Since Gulf carriers generally operate under the hub-and-spoke system, the only way Filipino airlines could compete is to use the entitlements given to them by the recently signed air-services agreement with the United Arab Emirates (UAE).

“Aside from requiring UAE carriers operating such additional flights to Manila are bound to also operate separately to Clark or Cebu within one year from signing of the memorandum, we got on a unilateral basis additional fifth freedom traffic rights to the United Kingdom, the United States and Saudi Arabia,” Civil Aeronautics Board Executive Director Carmelo L. Arcilla said.

The fifth freedom allows local carriers, like Philippine Airlines (PAL) and Cebu Pacific, to fly from Manila to UAE and onward to any country, including the UK, the US and Saudia Arabia. This will improve Philippine connectivity and also the commercial viability of routes to the UAE.

But these so-called consolations are mere consolations, if local carriers are not able to effectively use them.

“There is the consolation of allowing the Philippine carriers fifth freedom traffic rights beyond Dubai and Abu Dhabi, but the meager resources of the local airlines will prevent them from operating to so many more points beyond Dubai and Abu Dhabi,” said Avelino L. Zapanta, an aviation expert.

Zapanta explained this will prove to be another challenge in the histories of the two carriers, as they will have to shell out large sums of money to expand their operations through larger planes and extended routes.

“They must be willing to face the challenge of using the fifth freedom traffic rights afforded them in the new air-services agreement. That will take much resources and guts to do. If they would not be willing to compete, then they just have to content themselves with their share of overseas Filipino workers [OFWs] destined to the UAE and none of those going beyond,” he said.

Cebu Pacific Long Haul Division General Manager Alex B. Reyes said his camp is mulling over the prospect but noted that its main market remains the 800,000-strong OFWs in the Middle East.

“The effect of the recent UAE air talks is that the new agreement now allows Cebu Pacific to fly from the UAE to any point in the Middle East or Europe. This effectively means we can provide the same value-for-money services for passengers who are originating from the UAE and flying onward to Europe,” he said.

“Should we deem it commercially viable, we could stop over in Dubai, and then fly onward to London. The previous agreement had blocked us from doing so,” Reyes added.

Flawed agreement

The flag carrier, which has been operating direct flights to the US and London, stood its ground, with its president criticizing the compromise agreement the local air panel entered into.

“Economically, the excess capacity will hurt Philippine tourism. If a year from now we and other airlines are forced to slow down our route expansion or curtail some of the direct flights linking the nation to Europe, North America or the Middle East, that will dampen tourist flows to the Philippines,” PAL President and COO Jaime J. Bautista said.

The agreement, he added, somehow betrayed the local carriers’ position in maintaining good business environment in the long run.

“The UAE agreement is flawed, because it sacrifices long-term strategic growth for short-term political gains. It’s now up to us, the Philippine carriers, to make up by summoning the best of the Filipino fighting spirit to the competitive battle ahead,” he said.

Moved away from protectionism

The problem now here is that the government has moved away from a policy of protectionism and embraced the pocket open-skies strategy. It has also subscribed to the single-aviation market in the Association of Southeast Asian Nations (Asean).

“Government has moved away from protectionism, thus, its promulgation of pocket open-skies policy and subscribing to the Asean single-aviation market. It is against the law to provide the airlines subsidies and guarantees for which the US and its airlines have been assailing the UAE and its airlines of doing. The public would be critical of protectionism. They want more capacity, even if it’s the foreign airlines offering these,” Zapanta said.

Arcilla noted that the government is more keen on developing a more liberal policy on air services to keep pace with demands of globalization.

“The policy pronouncement of President Aquino is to develop an adequate aviation network that has sufficient connectivity necessary for economic development anchored by foreign and local airlines,” he said.

Arcilla added that the government is trying to balance the scales among many parties involved—local and foreign carriers, and the consumers.

“The goal is to develop a vibrant aviation network. We need to balance the interests, and I think we struck a balance between the two forces because we got minimal increase, and more compromises,” Arcilla said, referring to the promotion of developmental routes—such as Cebu and Davao—in the agreement with the UAE.

Passengers are the big winners

Despite putting local airlines in financial peril, the government was successful in stirring up the competition in the Middle Eastern market. This means that passengers will get more choices when it comes to air travel, lowering airfare prices in the process.

“This battle all works out well for the consumer, because the increased capacity for the UAE airlines is good for them; not to mention the ability to book to any of the airlines’ 150 or so destinations beyond their UAE home bases,” Zapanta said.

Arcilla agreed, saying that this will stimulate air travel from outside the Philippines. Hence, tourism revenues may increase, especially since the Middle Eastern market is a high-yield sector that the government has been keeping an eye on for a long time.

“The new services mean new destinations. For example, Cebu can be connected to Europe via Dubai. This will help us achieve our targets,” he said. “Competition will bring down airline- ticket prices, and the consumers stand to benefit from it.”

So, for Rolando R. Zamora, an engineer who is based in Dubai, going home to the Philippines will now be easier than ever. He plans to come home in March next year in time for his daughter’s wedding.

“I’m excited to see my daughter walk down the isle,” he said. “I can now give her a better gift, now that I get to save more from airline-ticket prices.”

Oshkosh In Action at DVO

14 September 2015

A Philippine Airlines (PAL) Airbus A321-200 aircraft (RP-C9919) made an emergency landing at the Davao International Airport Friday afternoon, September 11, after smoke alarm was triggered in the cockpit for a possible fire in its baggage compartment.

PAL flight PR-1814 left the Davao airport at 1:07 p.m. and was climbing through FL200 out of Davao's runway 23 when the crew received an aft cargo smoke indication. The pilot immediately called the Mactan control around 1:15 pm requesting for an emergency landing in Cebu, but the pilot was instead advised to turn back to Davao which is still the nearest airport with Cat 12 CRFs.

The plane was directed for priority landing at runway 23 at 1:33 pm about 30 minutes after departure. Attending emergency services found no trace of fire, smoke or heat in the aft cargo hold.

No one was reported injured in the evacuation of 131 passengers but one passenger passed out due to stress and was immediately brought to Davao Medical Center.

PAL spokesperson Cielo Villaluna said the affected passengers were re-accommodated on the next available flights to Manila.

The aircraft which had been parked at the old terminal for technical evaluation, assessment and investigation by PAL, and CAAP safety personnel has since flown back to Manila
. - Image courtesy Francis Magbanua

EY Announces New Baggage Policy for MNL

Cuts Excess Luggage Fares

Images courtesy of Flightglobal

14 September 2015

Abu Dhabi-based carrier Etihad Airways has announced changes to its baggage policy to Manila, as an exemption to one free baggage piece concept basis not exceeding 30kgs.

The new policy, effective from September 14, 2015, allows Manila-bound economy passengers to enjoy more than one free baggage not exceeding 23kgs. per bag.

“In line with industry best practice, we are moving to a fair and transparent baggage concept.” Etihad Airways chief commercial officer Peter Baumgartner said.

For Manila, customers flying economy value and economy freedom will now have increased allowance for two pieces of baggage at 23kg per bag, up from one bag weighing 30kg. according to Etihad.

The new policy will help the airline align more closely Etihad’s partner airlines, it added.

The airline flies to Manila twice daily, and it has code share agreements with Philippine Airlines to Abu Dhabi.

CEB Adds New Routes, Re-opens Davao Hub

14 September 2015

Low Cost Carrier Cebu Pacific Air (CEB) will launch three new international routes from Luzon, Visayas and Mindanao on December 17, 2015 as it inaugurates direct flights from Manila to Fukuoka and add Cebu to Taipei to the lists of its international destinations.

The airline will also re-open on the same day Davao to Singapore route it previously abandoned due to poor passenger sales.

CEB will fly Manila-Fukuoka thrice weekly with flight departures from Manila at 2:15 p.m. arriving Fukuoka at 6:55 p.m. Its return flight departs at 8 p.m. and arrives at 10:40 p.m. in Manila.

Fukuoka will be the airline's 4th destination in Japan after Osaka, Tokyo Narita and Nagoya.

Meanwhile, CEB is growing its Cebu hub by introducing Cebu-Taipei to its network with thrice a week service. Inaugural flight departs Cebu at 9:45 p.m. arriving Taipei at 12:25 a.m. Its return flight departs 1:05 a.m. and arriving Cebu at 3:45 a.m.

Taipei will be the airline's 6th international destination from Cebu. It already offers flights to Hong Kong, Singapore, Incheon, Busan and Tokyo Narita.

The Singapore flight from Davao will be twice weekly with departures at 5:35 p.m. arriving Singapore at 9:10 p.m. The return flight departs at 9:55 p.m. arriving Davao at 1:40 a.m. This will be the airline’s second attempt of making international hub from Davao work.

Uzbeks B757 Visits Manila

6 September 2015

Uzbekistan football team is in town to play the Philippines at the Philippine Sports Stadium in Bocaue, Bulacan Tuesday. They were transported by a Boeing 757-200 plane (UK-75700) from Tashkent for a 7 hour journey to Manila arriving 8:20 PM.

NEDA Approves 3.5B Pesos Naga Airport Project

6 September 2015

National Economic and Development Authority (NEDA) Board has approved Friday the P3.5-billion runway re-orientation project of Naga City Airport in Camarines Sur to address capacity expansion, approach, air safety and navigation issues.

Naga airport is currently using a single directional approach with only one way for take-off and landing due to terrain issues (Mt. Isarog obstruction) at the other end of the approach. The runway reorientation is to enable dual-approach landing and takeoff with new international standard airside and landside facilities to meet the airport category rating and for it to address growing tourism demand.

The existing runway configuration (04-22) North-Northeast will be re-oriented 90 degrees clockwise to South-Southeast orientation to be constructed in San Jose Pili, Camarines Sur.

The Department of Transportation and Communications (DOTC) is expected to build the two-kilometer (2km) runway to accommodate Airbus narrow bodied planes. Construction is slated to start in 2017 after detailed engineering design is done. It will be funded under the General Appropriations Act (GAA) to be introduce in 2016.

The airport project is slated for completion in 2019.

Meanwhile, P20 billion has also been earmarked by DOTC for airport expansion and modernization projects for Laoag International Airport, completion of Bicol International Airport and Tacloban International Airport, Siargao Airport expansion, Caticlan International Airport, Kalibo International Airport, Busuanga Airport and the San Vicente Airport.

NATS UK Bags NAIA Optimization Project

1 September 2015

After two failed bidding's due to unreasonably low contract offer, NATS UK finally was offered consultancy contract by the Department of Transportation and Communications (DOTC) after series of negotiations and watered down work provisions, to help ease air traffic congestion at the Ninoy Aquino International Airport (NAIA).

DOTC said three (3) international firms vied for the contract which included Mitre Corporation of the United States, NATS Ltd of the United Kingdom, and Copenhagen Airport A/S of Denmark.

The 91.4 million pesos NAIA Runway Optimization project was broken into two parts after bidders tendered in excess of 100 million.

The new NAIA Runway Optimization project phase one (short term) costing only P66 million was awarded to NATS Services Limited and Schema Konsult Inc., with the aims of increasing hourly air traffic movements (ATM) from 40 to 60 by determining the optimal configuration for the airport’s intersecting runways.

Under the 12-month contract, the group will be tasked to increase hourly air traffic movements (ATMs) to 60 from 40 by determining the optimal configuration for the airport’s intersecting runways.

According to UK-based NATS Ltd. representatives, it is possible to increase the capacity of the existing NAIA runway to between 50 and 60 movements per hour from the current 40 movements per hour, similar to what they did at Singapore, Hongkong, and London's Heathrow airport.

In the first six months of the 12-month contract, NATS will evaluate the airport’s current airspace, runway, and terminal capacities; air traffic and surface operations; runway access points; and ATC training and recommends ground movements and approach and departure patterns at the airport.

Over the next six months, the Manila International Airport Authority (MIAA) and Civil Aviation Authority of the Philippines (CAAP) will then implement the recommended improvement measures over the ensuing six months.

The road map for short- and long-term improvements (phase 2) will focus on the optimization of runway capacity by cutting aircrafts’ occupancy times; developing air traffic controllers’ (ATC) surveillance capabilities through technology and determining needed alterations to access points; and maximization of available airspace by reducing restrictions and making procedural improvements to tighten intervals between aircraft movements.

“We are excited to work with one of the world’s best firms in the industry towards optimizing NAIA’s runway capacity. With NATS, which has worked on the Dubai, Singapore, and Heathrow Airports, we can expect safer, more efficient operations, and much less flight delays and cancellations,” Transportation Sec. Jun Abaya said in a statement Monday.

NATS UK provides air traffic navigation services to London Gatwick and London Heathrow airports.

Secrets of UAE Negotiation Revealed

1 September 2015 

By Federico D. Pascual Jr.

Veiled threats
Last Thursday, the UAE chief negotiator, Omar bin Ghaleb, opened the air talks by castigating the Philippine panel. He poured out his disappointment over seeing “joint statements” in the newspapers issued by the major Filipino airlines.

This has never happened before, he told the Philippine panel, threatening to report the affront to his superiors in Abu Dhabi.

The Philippine chief negotiator, DoTC Undersecretary Jose Lotilla, replied that the Philippines is a free country with a free press, and that the government cannot restrict citizens, including airlines, from making statements. Needless to say, the opinion of Filipino airlines is not necessarily shared by the government.

Throwing in more veiled threats, the UAE negotiators mentioned the thousands of Filipinos employed by UAE airlines, as well as overseas Filipino workers in the UAE (one official said there were 900,000, while another one claimed “millions”).

That did not go well with the Philippine side, as some felt the UAE was threatening to stop or slow down hiring of OFWs if their demands were not granted.

(Hint from history: Some years back, the UAE booted out Canadian soldiers from one of their military bases after Canada refused to accede to the demand of Emirates Airlines for more entitlements to Canada.)

What exactly does UAE want?

THE UAE was demanding more flights to Manila than just the 14 flights per week usually cited in the media, even as high as 28 to 56 additional flights per week.

The discussions dragged on to almost midnight, with UAE holding out for more flights than the seven that the Philippines was prepared to give (and finally gave).

But the foreign airlines resisted the condition proposed by the Philippines that UAE airlines must also fly directly to Clark or Cebu as a price to pay for receiving and using new entitlements to serve Manila.

The UAE’s reluctance led to the watering down of the Cebu/Clark condition. Now the UAE airlines, such as Emirates or Etihad, have one year to meet this condition. They also demanded a chance to postpone this further if they present valid reasons.

Why did the Philippine side accept this weakening of a core pro-Filipino position?

Was it too willing to close a deal with UAE at any cost? The panel owes the people an explanation.

Etihad Airlines (the UAE flag carrier based in the capital, Abu Dhabi) walked out at one point. It was sore that the Philippines seemed to be favoring Emirates, its chief rival and fellow UAE carrier. Etihad returned to the table that same day.

It seems the UAE government promised to split any new entitlements more or less equally between Etihad and Emirates. The final split appears to be four for Emirates and three for Etihad.

Why does Emirates get the upper hand? Did not the CAB rebuke them in late 2013 and early 2014 for operating illegal flights to Manila without the express approval of the board, slapping it a fine of more than P1 million for the deception?

Curious sidelights

Philippine carriers (Philippine Airlines, Cebu Pacific and Zest Air/Air Asia) are rivals, but they were so distressed over developments that they issued together an ultimatum to protest the Philippine panel’s willingness to give in to some UAE demands.

After this show of force by the local airlines, the Philippine panel somehow displayed a little more backbone and started pushing back UAE. Were it not for this, the final agreement would have been more detrimental to the national interest.

Note that Zest/Air Asia did not join Cebu Pacific and PAL when they issued joint statements before the negotiations. But the goings-on in the talks must have been so bad that Zest/Air Asia felt compelled to stand with its two biggest rivals.

The seating arrangement itself was suggestive. Filipino airlines were assigned seats on the periphery of the meeting room, while government officials (DoTC, CAB, DoT, DFA and DTI) occupied the main table on the Philippine side.

In contrast, at the main UAE table Emirates and Etihad sat on the right and left flanks of the chief negotiator and members of the UAE, Dubai, Abu Dhabi and Sharjah government authorities for civil aviation.

The agency with the most number of representatives, after the Civil Aeronautics Board (whose staff handled secretariat functions), was the Department of Tourism that had at least five reps. Reward for bringing in less than 20,000 Emirati tourists last year?

It was revealed that Cebu Pacific was kicked out of Dubai airport for two months in 2014, when one of the runways needed repairs. While CebuPac was forced to use neighboring Sharjah airport, Emirates was not required to transfer its Dubai-Manila flights to Sharjah.