Saturday, November 13, 2010

Singapore Firm to Expand Facility in Clark

According to the Clark International Airport Corp., aircraft maintenance, repair and overhaul (MRO) firm SIA Engineering Co. (SIAEC) will invest close to P1 billion to put up a second hangar at the facility.

The expansion program will allow SIAEC to service the carriers newest Boeing 747 and 777 aircraft. It will also generate an estimated 300 new jobs, while more allied industries may emerge as a result of the investment in the 2,367-hectare Clark air hub.

In a statement yesterday, CIAC president and CEO Victor Jose Luciano revealed that the construction of the second hangar will start sometime this month.

SIAEC will be building a bigger hangar to accommodate wide-bodied aircraft such as the Boeing 747 and 777, he said.

In November 2008, SIAEC, together with joint venture partner Cebu Pacific Air, began construction of the first hangar for the Airbus A320 and A319 aircraft in Clark. This, in turn, paved the way for the further development of the Diosdado Macapagal International Airport (DMIA).

The first hangar cost an estimated P800 million. It started operations in July 2009, providing maintenance service for the Airbus A320 aircraft of various foreign and local airlines.

Starting this month, we will see the development of the second, much larger hangar in Clark, Luciano said. This will generate no less than 300 direct jobs and about 200 indirect jobs for our people in Central and Northern Luzon.

The SIAEC facility is expected to start operations by the end of 2012.

Singapore-based SIAEC is an internationally renowned aircraft MRO company providing total maintenance solutions to wide-bodied aircraft in the service of more than 85 international airlines worldwide. It has 24 joint ventures and subsidiaries across nine countries that form the SIAEC Group.

Its services include airframe, component, engine, and aircraft conversions and modifications.

SIAEC also provides support services at the Changi International Airport in Singapore, as well as line maintenance support services in Australia, the United States, Hong Kong, Indonesia, Vietnam and the Philippines.

<<INQ7 Interactive Inc, Source: The Financial Times Limited -- 11/11/2010>>

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Friday, November 12, 2010

New aviation officials well qualified –DoTC

MANILA, Philippines – The newly appointed officials of the Civil Aviation Authority of the Philippines (CAAP) are qualified, and they bring to their jobs a “wealth of expertise and experience that are precisely needed to bring our aviation sector to the next level,” according to Undersecretary Dante M. Velasco, of Department of Transportation and Communications.

Velasco pointed out that the new appointees are expected to make up for the lack of real aviation experience among the current crop of top CAAP executives. “This is seen by industry experts as the major stumbling block to the country’s ability to move from Category 2 to Category 1,” he added.

The DoTC Secretary is pushing the CAAP to get back the Category 1 status, thus CAAP executives are now focused on accomplishing “every actionable item” in the identified hurdles toward getting once again the Category 1 status,” he said.

Reacting to a statement that the International Civil Aviation Organization (ICAO) wants a CAAP that is “professionalized,” Velasco countered that “these newly designated executives are precisely aviation professionals in the highest order and therefore meet the requirements of ICAO.

Current CAAP Director General Alfonso Cusi, who reportedly objected to the appointments of the new CAAP officials, had extensive experience in shipping, but not in aviation. Earlier, a Congressman during the hearing on DoTC’s budget, asked about Cusi’s aviation experience, adding that what the country’s aviation authority needs are “real aviation experts”.

Those who were recently appointed to key CAAP positions by the CAAP Board are: Ramon Gutierrez, deputy director general for administration; Napoleon Garcia, deputy director general for operations; Wilfredo Borja, assistant director general III (Air Traffic Services); Andrew Basallote, assistant director II (Air Navigation Services); Edgardo Costes, assistant director general II (Aerodrome Development and Management Services); Wilson Mirabona, assistant director general I (Aerodrome Development and Management Services); and Andres Lauriall, assistant director general I (Civil Aviation Training Center).

“Gone were the days when non-aviation people were appointed to critical posts in aviation: they have just been replaced by air sector experts,” the DoTC official said.

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CAAP - Gunning after Cusi

‘In gunning after Cusi, the Palace might be cutting off the nose to spite the face.’

SO-CALLED presidential "desire letters" used to apply only to nominations to the boards of government owned and controlled corporations. Hence it is rather odd for MalacaƱang to tell the Department of Transport and Communication that it is President Aquino’s "desire" that seven line positions in the Civil Aviation Authority of the Philippines, which are not vacant in the first place, be filled with his nominees.

We could dismiss the Palace action as just another example of its high-handed management style. What Noynoy wants, or probably more accurately what his buddies want, they get. And niceties, not to speak of legalities, be damned.

The Palace meddling is unwarranted. The CAAP charter provides that "the Director General shall be responsible for the exercise of all powers and the discharge of all duties of the authority and shall have control over all personnel and activities of the authority."

The background to this flap is that the Palace wants Cusi out. He, however, isn’t budging. Probably some bright guy in the Palace though that surrounding him with deputies not of his own confidence might just be the aggravation that would prompt him to throw in the towel.

There are two strikes going against Cusi. First is his alleged lack of qualifications for the job and the second is his being an appointee of former President Gloria Arroyo.

Critics of Cusi says he has no business handling aviation because his background is maritime (his previous posting was as administrator of the Maritime Industry Authority). They could be right, although some people involved in the aviation sector have been giving Cusi good marks since he came on board last March.

The more grievous sin of Cuisi, however, is his being identified with the last administration. But the apparent return of politics in the running CAAP (formerly the Air Transport Office) could mean the continued downgrade of Philippine aviation and what this means to the travel and tourism sector.

Under ATO, highly technical positions were given to people with political connections while the welfare of check pilots and air traffic controllers ended up in the bottom of official priorities. This was one of the reasons the US Federal Aviation Authority downgraded the Philippines from Category 1 to Category 2 status.

In gunning after Cusi, the Palace might be cutting off the nose to spite the face.

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Thursday, November 11, 2010

CAAP - Cusi outflanked as all his top aviation officials replaced

THE Philippine Transport Department has dislodged seven aviation officials to give way to appointees with “more experience and expertise,” an official told the Manila Standard Wednesday.

The seven had been placed on floating status and would have to wait for their new designations, Transport Undersecretary Dante Velasco said.

“As career officials, they can choose to stay or leave the agency,” Velasco said in a phone interview.

He said the Transport Department was also planning to appoint a new director of the Civil Aviation Authority of the Philippines to replace Alfonso Cusi, “But we are still studying that from a legal standpoint.”

Cusi refused to comment on the new appointments, but said he had already written the Transport Department requesting it to follow the procedure for career positions that should have security of tenure.

The new officials of the Civil Aviation Authority who replaced the seven took their oath Wednesday last week, he said.

He confirmed the appointment of the following officials:

• Ramon Gutierrez as deputy director general for Administration

• Napoleon Garcia as deputy director general for Operations

• Wilfredo Borja as assistant director general II for Air Traffic Services

• Andrew Basallote as assistant director general II for Air Navigation Service

• Edgardo Costes as assistant director general II for Aerodrome Development and Management Service

• Wilson Mirabona as assistant director general I for Aerodrome Development and Management Service

• Andres Laurilla as assistant director general I for the Civil Aviation Training Center.

“We just got the right people. The new government needs the right people to get things done,” Velasco said, adding that with their oath-taking on Wednesday, the appointments were considered “final” and were approved by the majority of the Civil Aviation board.

Velasco said the seven aviation officials who were replaced were appointed by the Arroyo administration, but they lacked the skills to upgrade the aviation sector.

“We need to make up for lack of aviation experience and expertise of the people now leaving the CAAP and [for the Philippines] to get back the Category 1 status,” Velasco said.

He said officials of the European Union and the International Civil Aviation Organization had ordered the Philippines to professionalize the CAAP and appoint officials based on their technical expertise.

“We need to do that to get back the Category 1 status and lift the EU ban on our carriers,” Velasco said.

In 2007 the US Federal Aviation Administration placed the Philippines on a list of 21 countries on Category 2 from Category 1 “for failure to provide safety oversight of its air-carrier operators in accordance with the safety-oversight standards set by the International Civil Aviation Authority.”

The Philippines’ aviation facilities still failed in the second audit conducted bythe FAA last year, so those stayed under Category 2 in aviation safety standards.

“The [new officials] came from the private entities involved in aviation,” Velasco said.

“We are confident that with the new composition of the CAAP, we can pass the FAA audit.”

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Wednesday, November 3, 2010

PAF Gets Brand-new Trainer Airplanes

The Philippine Air Force (PAF) is set to fly again when it receives four brand new trainer airplanes bought this year from Italy through the military’s modernization program.

The four trainer planes, part of 18 on order, will be formally accepted by PAF chief Lt. Gen. Oscar Rabena in formal ceremonies to be held at the PAF training school in Pampanga this morning.  Witnessing the event will be Defense Secretary Voltaire T. Gazmin.

PAF spokesperson Lt. Col. Miguel Ernesto Okol said this initial delivery is part of the 18 basic trainer aircraft which the Air Force is acquiring from Augusta of Italy with a total cost of P621,671,409.06.

The package includes the airplanes, spare parts, training and integrated logistical support.

Okol disclosed that the Pilot Training System of the Philippine Air Force currently uses both the T-41 and the SF-260 aircraft for primary and basic training respectively.

“The hand-over of T-41 aircraft from the Republic of South Korea in 2009 provided more primary trainer aircraft for the Philippine Air Force Flying School,” Okol said.

“These (SF-260) trainers will significantly increase the number of available basic trainer aircraft of the PAF for flight training,” Okol said.

According to the PAF spokesperson, the PAF is lacking in training aircraft, with at least 150 to 170 Air Force officers forced to wait in line for actual training to fly an aircraft.  The arrival of the four SF-260 Marchetti planes will boost the training capability of the Air Force and ease the backlog of students required to undergo flying exercises.

Okol however clarified that even if the officers wait in line to get flying time, their time was not wasted as they are required to undergo training in other career fields related to intelligence, computers, logistics and maintenance.

The propeller-driven AF-260 is the world’s most successful screener and primary trainer.

Fully acrobatic by design, the SF-260 offers flight characteristics and performance levels that allow effective pilot candidates screening early in the program and minimizes the costs incurred when students wash out on jets or complex turboprops.

The SF-260, with Allison 250-B17D Turboprop engine, has a span of 8.35 meters, length of 7.40 meters, rate climb of 2,200 feet per minute and maximum level speed of 228 KTAS (knots true air speed).  All SF-260 variants are available with either piston or turbine engines.

Some 900 SF-260 have been sold to 27 different military customers, civil professional flying schools and private operators worldwide.  The Italian Air Force bought 30 brand new units.

The expected completion of delivery for the remaining 14 aircraft will be in the first quarter of next year.

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PAL willing to spend P2.5-B to end labor woes

Local carrier Philippine Airlines said it is willing to put to rest the messy labor row between the management and labor union with a P2.5 billion settlement.

In a statement on Wednesday, PAL president and CEO Jaime Bautista said they will abide by the recent decision of the labor department to enhance the separation benefits of the 2,600 employees who will be laid off.

Last week, labor secretary Rosalinda Baldoz recognized PAL management's prerogative to outsource 3 non-core operations to be more cost-competitive in an industry where the players have increased and fares have raced to the bottom.

Bautista said the planned spin-off of the in-flight catering, airport services, and call center reservations was initially estimated to cost about P2 billion, based on the earlier decision by the Department of Labor and Employment (DOLE) that was contested by the union.

The modifications in the financial and non-cash benefits will cost an additional over P400 million, according to the PAL statement.

"This is a bitter pill we have to swallow," Bautista said. The airline has suffered financial losses due to the residual impact of the high oil prices and the limits in additional flights as a result of the regulatory decisions of the US and the European Union aviation bodies.

To finance the higher separation packages, Bautista said they are considering availing of additional loans from government banks, particularly the Development Bank of the Philippines or Land Bank of the Philippines. "If this is not possible, we will seek financing from other PAL creditors," he added.

"By not contesting the DOLE Secretary's decision, especially the grant of additional benefits, PAL hopes to finally implement a long delayed corporate restructuring," he stressed. "They will all receive their respective separation pay and benefits that are much more than what the Labor Code provides."

He then urged PALEA leaders to also respect the DOLE decision.

But PALEA president Gerry Rivera said they would exhaust all legal means to prevent the layoff.

PAL's position comes a day after the Philippine Airlines Employees' Association (PALEA), the ground crew union at PAL, staged a protest action at the historic Mendiola Plaza historic Don Chino Roces Bridge (formerly Mendiola) near MalacaƱang despite PAL's threat of charging them with abandonment of work.

The labor department has averted a strike that could have paralyzed the operations of the local carrier. The Aquino government, which has initially intervened when the labor issues has worsened mid-year, had said they will abide by the decision of the labor department.

No jobs lost

Bautista added that the 2,600 PAL employees who will be laid off can seek employment again at the companies that will absorb the outsourced services.

"Sec. Baldoz, no less, assured PALEA there will be no jobs lost in the spin off. Aside from receiving their benefits, all affected workers have the option of applying for positions in the third party service providers if they so choose," he said.

e-Ventus, the call center arm of telecommunications giant Philippine Long Distance Telephone Company (PLDT), will absorb the reservations and phone customer service operations, while Sky Kitchen and Sky Logistics, both owned by Cebu-based businessman Manny Osmena, will soon provide the outsourced catering and airport services, respectively.

"At the end of the day, PAL wants to be remembered not for the 2,600 jobs it lost, but the more than 4,000 it saved," Bautista ended.

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Phone jammers to be used vs human traffickers

The Bureau of Immigration (BI) will put in place cell phone jammers at immigration zones in airports in order to immobilize human traffickers.

Syndicates make use of mobile phones in communicating with their cohorts and victims.

In a press release, Immigration Officer-In-Charge Ronaldo Ledesma said the necessary equipments are now in place at the Ninoy Aquino International Airport (NAIA).

There are currently 4 jammers and a server at the immigration zone there, costing around P400,000.

The equipments were bought during the previous administration. The BI had to stop using them due to protests from airline companies and other airport stakeholders.

A permit is needed from the National Telecommunications Commission (NTC) for their re-activation. BI property section chief John Tugade said he has already applied for a permit with the NTC.

Ledesma said similar jammers will be installed in other international airports in the country once the bureau gets the necessary budget.

“These cellphone jammers will definitely go a long way in bolstering our fight against human traffickers,” Ledesma said.

Reactivating the jammers is one of several measures that the BI and the Inter-Agency Council Against Trafficking (IACAT) have adopted in its fight against human trafficking.

Ledesma also announced 3 weeks ago the adoption of the so-called “S-line” queuing system for all arriving and departing passengers at the NAIA and other airports to prevent collusion among human traffickers and rogue immigration personnel.

The “S-line” aims to prevent international passengers from choosing which immigration counter to line up to process their travel documents.

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Airline pax to pay OverTime of Bureau of Customs Officers

Airline passengers and overseas Filipino workers (OFWs) will have to shell out an extra $1 to $2 when they leave the country with the impending implementation of a new policy to pay for the overtime pay of Customs agents at the airports.

The move was prompted by a Court of Appeals ruling favoring international carriers, through the Board of Airline Representatives, that they are not bound to shoulder the overtime pay of Customs agents.

The ruling in effect passes on to passengers the responsibility of assuming this financial obligation.

Customs Commissioner Angelito Alvarez said an additional cost of $1 to $2 may be imposed to finance the allowances and overtime pay of Customs agents.

“The additional $1 to $2 would either be incorporated in the terminal fee or would be paid as a separate account in the airport,” he said.

He said that Customs personnel have not received such monetary benefits since July last year.

This non-payment of overtime pay had Customs agents refusing to render work beyond the prescribed eight-hour period.

The CA ruling also obliged the Bureau of Customs (BoC) to draft a Memorandum of Understanding (MoU) that the passengers at the airport such as the OFWs, for instance, would have to shoulder the cost.

However, representatives of the Ninoy Aquino International Airport (NAIA), and the Bureau of Customs, Immigration and Quarantine, among others, have yet to approved the agreement.

For the meantime, Alvarez said the agency has secured airlines' commitment to pay at least five months’ worth of overtime pay and allowances in exchange for the services of Customs employees until the yearend.

The proposed MoU came after the Customs agents threatened to refuse working beyond the working hours last week.

The BoC is looking at implementing the measure amid the government's limited room to take on additional cost. The Aquino administration is aiming to contain its budget deficit within the P325-billion ceiling.

Passengers departing for other countries are each charged a terminal fee of P750 as well as travel tax of P1,650.

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Air Force: 4 new trainer planes from Italy to boost pilot training

The Philippine Air Force (PAF) on Tuesday expressed confidence that the scheduled arrival of four new trainer planes from Italy will boost the training of its pilots.

Air Force spokesman Lt. Col. Miguel Ernesto Okol said the four SF-260 trainer planes, which are expected to arrive by Thursday, are part of the 18 basic trainer aircraft purchased by the Philippine government for P621.67 million from Agusta, an Italian aircraft manufacturer.

"The arrival of the four SF-260 Marchetti planes will boost the training capability of the Air Force and ease the backlog of students required to undergo flying exercises," Okol said.

Currently, the Air Force lacks training aircraft, with at least 150 to 170 Air Force officers forced to wait in line for an actual training to fly an aircraft.

The SF-260 was originally manufactured by SAIA Marchetti, which was later purchased by Agusta and Alenia Aermacchi, both Italian firms.

The remaining 14 SF-260 planes will be delivered to the Philippine in the first quarter of 2011.

The 18-plane package deal, bought through the AFP modernization program, already includes spare parts, training and integrated logistical support, Okol said.

In 2009, the Philippines acquired from South Korea 15 T-41 aircraft, which along with SF-260 are used by trainees of the Philippine Air Force Flying School in their primary and basic flight training.

The propeller-driven SF-260 offers "flight characteristics and performance levels that allow effective pilot candidates screening early in the program and minimizes the costs incurred when students wash out on jets or complex turboprops," Okol explained.

The SF-260 is currently used various military institutions, civil professional flying schools, and private operators worldwide

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Tuesday, November 2, 2010

Airphil Express eyes more regional routes

Budget carrier Airphil Express eyes to aggressively expand its regional routes in the next few months, despite experiencing a shortage in pilots recently.

Airphil Express executive vice president and chief operating officer Cesar Chiong said they may add 5 more destinations in Asia within the first half of next year as they take delivery of new aircraft.

The airline plans to start flying to Hong Kong, Korea, Kuala Lumpur, Bali and China, but this would "depend on air entitlements."

"If [we] get the traffic rights, of course, we will tap those markets," Chiong said.

Airphil Express launched last week its maiden international flight to Singapore, one of the most profitable and high-growth routes for airlines operating in Southeast Asia.

Domestically, it just started flights to Legazpi, Tagbilaran, Catarman, and Ozamis.

However, after launching the new destinations, Airphil Express experienced a shortage in pilots which forced it to cancel or delay several local flights over the weekend.

In a text message to, Airphil Express vice president for marketing and media Maria Java said the problem did not have an impact on their expansion plans.

"We do not expect this circumstance to happen again," she said.

In August, Airphil Express' affiliate, flag carrier Philippine Airlines (PAL), was also forced to cancel flights after 25 of its pilots suddenly quit for higher paying jobs abroad.

Java clarified that last weekend's pilot shortage was "in no way related to PAL concerns. Our incident is isolated."

"All our operations are now back to normal and on schedule," she added.

Airphil Express, which is owned by tycoon Lucio Tan, was formerly Air Philippines until it was folded into the operations of PAL and its budget airline arm, PAL Express. In October 2009, Airphil Express began operating PAL Express flights on behalf of PAL.

In the next 2 and a half years, Airphil Express will spend $250 million for the acquisition of up to 20 more aircraft to service both domestic and expanding international operations.


Meanwhile, Airphil Express is targeting to undertake an initial public offering (IPO) within 2 to 3 years, Chiong said.

The proceeds will be used to fund expansion.

"Timing is very important. The local economy is expected to grow faster with the recovery of the US economy. That will do us good," Chiong noted.

Airphil Express' rival, Cebu Pacific, raised P26.8 billion or $611 million in its October 27 IPO, making it a record amount in dollar terms for a Philippine listing.

Cebu Pacific, a unit of Gokongwei-led JG Summit Holdings Corp., expects to increase its international capacity by 25% in 4 to 5 years via new foreign routes.

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Baldoz: PAL layoff lawful, reasonable

Labor Secretary Rosalinda Baldoz yesterday said the planned lay off by Philippine Airlines is both lawful and reasonable.

"The termination is in accordance with the finding that management’s prerogative to close and outsource services in the three departments was done in good faith and was in accordance both with the CBA and the Labor Code," said Baldoz.

"The CBA (Collective Bargaining Agreement) affirmed the management prerogative of PAL to organize, plan, direct and control operations, as well as the prerogative to reorganize its corporate structure for the viability of its operations," she said. She said that based on the CBA and Article 283 of the Labor Code of the Philippines, PAL’s closure of three departments, namely in-flight catering, airport services (cargo handling), and call center reservations operations, was reasonable and lawful as it was a measure to address PAL’s accumulated net losses and deficits.

Among the causes of the losses cited by PAL were the surge in fuel prices in 2008, the ban on PAL from the air space of 27 European Union member states and IATA’s suspension of PAL remittance facilities.

PAL said the lay-off is needed for it to survive in a highly competitive airline industry.

Baldoz said these conditions ultimately addresses the need to meet one of the two criteria in making a "valid termination" under the CBA, which is whether the exercise of the management prerogative was done in a just, reasonable, humane, and lawful manner.

The DOLE head said PAL was also able to meet the other criteria, which was the observance of the 45-day consultation period, required in the CBA, before implementing the reorganization.

"PAL more than complied with the 45-day consultation requirement under the CBA, considering the consultations and preventive mediation conferences between the PAL and the PALEA (PAL Employees Association) before the National Conciliation and Mediation Board as far back as September 2009," said Baldoz.

Aside from noting that the layoff was done above board, Baldoz also emphasized the "upgraded" benefits allocated for the affected employees.

The benefits include a separation pay equivalent to 1.25 percent per year of service; additional gratuity of P50,000 per affected employee; vacation leave balance that is 100 percent commutable to cash regardless of years of service; sick leave balance that is 100 percent commutable to cash regardless of years of service; extension of one year of the medical and hospitalization package; and trip pass benefits depending on the number of years of service.

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Metro Pacific, San Miguel take first crack at PPP

TWO of the Philippines’ top conglomerates have first dibs at two infrastructure projects originally lined up for the government’s public-private partnership (PPP) initiative. Kenneth Tanate, director of the National Economic and Development Authority (NEDA) Infrastructure Staff, said the Department of Public Works and Highways (DPWH) removed the P21-billion North Luzon Expressway (NLEX)-South Luzon Expressway (SLEX) Link would no longer be included in the PPP lineup for 2011.

The NLEX-SLEX Link is an unsolicited proposal submitted by Metro Pacific Tollways Corp., which is a unit of Pangilinan-led Metro Pacific Investments Corp. (MPIC).

The project would involve constructing a 13.2-kilometer elevated road through the Philippine National Railway tracks from the end of NLEX at C3 to the beginning of Skyway 1 at Buendia.

Besides the NLEX-SLEX Link, the planned City Terminal for Diosdado Macapagal International Airport (DMIA) likewise was removed from the PPP list.

A consortium led by Philco Aero is in negotiations with state-run Clark International Airport Corp. (CIAC) for the construction of the new DMIA terminal.

San Miguel Corp. (SMC) earlier said it was in talks with Philco Aero for the development of the airport terminal.

Besides MPIC and SMC, other parties have announced they were interested in the PPP projects.

South Korea’s military pension fund was one of them, according to the Board of Investments (BOI).

Separately, Trade Undersecretary and BOI Managing Head Cristino Panlilio told reporters that he urged the Military Mutual Aid Association during a visit to South Korea last week to infuse a part of its $5-billion fund into the PPP projects that the Aquino administration would roll out.

Tanate said the government has “13 bankable projects” ready for bidding next year.

The NEDA official said the P70-billion Metro Rail Transit (MRT)-Light Rail Transit (LRT) Expansion Project was broken into three projects.

The first project involves the operation and maintenance of LRT Line 1 (LRT 1) North Extension Project, while the second is the construction of the LRT 1 South Extension Project.

The third project is the Common Ticketing System Project for LRT 1, LRT 2 and MRT Line 3.

Tanate said the government decided to break the P70 billion MRT/LRT Expansion Project to prevent an investor from getting too big a project, and instead distributing it to more bidders.

Other projects to be rolled out next year are the P11.3-billion MRT Line 2 Extension Project, the P7.54 billion New Bohol Airport, the P4.36 billion Puerto Princesa Airport, the P10.5 billion CALA Expressway- Manila-side Section, and the P3.08 billion Daraga International Airport.

Also included in the PPP list are the Privatization of the Operation and Maintenance of the Laguindingan Airport, and the Supply of Treated Bulk Water for Metro Manila, the costs for both of which have yet to be determined.

For 2012 and beyond, the government identified 73 projects under its PPP portfolio.

These include airports, roads, rails, water supply, irrigation, school buildings, health facilities, solid waste management services, and other social support projects.

Of these projects, 28 require P263.5 billion in investments.

In the power sector alone, 43 projects will be lined up for PPP with an indicative amount of P348.5 billion

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PAL workers protest DoLE decision

Philippine Airlines (PAL) employees on Monday started a series of protest actions against the recent decision of Labor Secretary Rosalinda Baldoz to allow the mass layoff of some 2,600 workers.

At 10:00 a.m., dozens of members of the Philippine Airlines Employees’ Association (Palea), the ground crew union at PAL, held a symbolic protest at the main office of the Department of Labor and Employement (DoLE) in Intramuros, Manila.

The PAL employees brought a mock coffin with the label “RIP PAL workers” and also an effigy of Labor Secretary Baldoz in the image of the fictional “Kamatayan.”

The protesters carried posters with messages such as “Job Security ng PAL Workers, Inilibing ni Baldoz,” “Baldoz Halloween Order and Lagman Midnight Decision, Parehong Anti-Labor,” “Baldoz, Mumultuhin ka ng Halloween Order Laban sa PAL Workers,” and “Kung Di Mo Kaya si Lucio Tan, Baldoz Resign.”

Gerry Rivera, Palea president and also vice chairman of the militant Partido ng Manggagawa (PM), said that “The DoLE’s version of Oplan Kaluluwa is releasing an order on the eve of the Halloween holidays that revives the half dead proposal to permit contractualization at PAL. Contractualization means not just the death of job security at PAL but also killing the oldest union in the country.”

“Nobody will allow themselves to be murdered without putting up a fight. This is a fight for decent jobs and protection for our families,” Rivera added.

Palea said the protests will continue tomorrow with a march from the DoLE main office to Mendiola by several hundred PAL employees together with supporters from PM and other labor groups.

Rivera lambasted PAL’s argument that it will close down if the layoff and outsourcing move is not allowed.

“This is simply blackmail and black propaganda meant to intimidate workers into accepting the unacceptable. Revenue-generating departments such as airport services and catering will be outsourced to service providers which are partly-owned by Lucio Tan. PAL may be losing but the second wealthiest Filipino keeps on getting richer,” he argued.

He called on PAL workers to reject the termination notices that will come in the wake of the DoLE decision affirming the mass layoff plan.

“Palea calls on its members not to accept any termination paper and not to sign any employment contract with service providers. All for one and one for all in the fight for job security and union security,” he said.

Rivera recalled that when the mass retrenchment was initially implemented last April, employees were asked to sign termination papers in one room and then to transfer to another room to sign employment contracts with service providers.

“Let us not be tricked into swallowing the bitter pill of retrenchment now that it has been artificially sweetened with a slightly higher separation pay,” he insisted.

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Unraveling the mysteries of fuel

Fuel is an item that is very important for the proper operation of our aircraft. Even though the world is full of “fuel experts,” it is still a bit of a mystery.

I recently received three questions that are actually interrelated. The first has to do with water in a plane’s fuel tank. The person changed out the fuel cap and gasket, stored the aircraft in an unheated hangar, and still found water in the fuel sump. Why? Any hydrocarbon fuel, such as 100LL, will absorb a small amount of water from the air. The amount of water suspended will depend on the temperature of the fuel. During the day, the fuel will absorb water from the air, then when it cools down at night some of the water can drop out and become free water. Because of surface area, the next day the fuel will absorb more water from the air and not the free water that had previously dropped out. The bottom line is that free water will always be present and all FBO tanks and aircraft tanks must be sumped daily or before every flight.

The second question deals with how long 100LL can be stored before being sold at an FBO. Although not specified in the ASTM D-910 spec for 100LL, the limits for the oxidation tests are designed to ensure that the fuel will be suitable for service after a year in proper storage.

There are two major concerns here. One is that not all storage is under ideal conditions. The other is turnover. At an FBO, the tanks are not usually emptied completely prior to the addition of fresh fuel, which means a part of the old fuel is left in the tank. When you consider that the fuel can sit awhile at the refinery, then at the distributor, then at the FBO, and finally in the fuel tank on an airplane, you can understand that, over time, especially if the storage is not up to par, there can be some problems with the fuel. This older fuel can allow gum formation and other problems, so it is very important that all parties who handle the fuel follow proper handling procedures and practice good inventory control.

The third question came from Bent Esbensen, who stated that the Danish government is demanding that all mogas contain at least 5% ethanol. He was wondering if this fuel would be OK to use in his plane. I understand that avgas cost $11.50 a gallon and mogas cost only $6.50 there, but the answer is still NO.

This answer is based on many factors, but the biggest is that ethanol is a polar solvent, which means that it will absorb water — and the answer to the first question tells us where the water comes from. Add the effect of aging from the second question and you have a real problem. In addition, even 5% ethanol blends will attack rubber and metal fuel system components and can cause premature failures.

So remember: Water is present in the fuel system no matter what; FBOs and other fuel systems should practice inventory and proper quality controls to ensure that avgas is sold within a year; and that ethanol is a no-no, even at the 5% level.

You can contact Ben at

Posted by Ben Visser · October 31, 2010

Ben Visser is an aviation fuels and lubricants expert who spent 33 years with Shell Oil. He has been a private pilot since 1985.

Monday, November 1, 2010

CEB’s new Airbus A320 arrives

The Philippines largest national flag carrier Cebu Pacific (CEB) took delivery of its 22nd brand-new Airbus aircraft from Toulouse, France.

This is the first of 22 more brand-new Airbus aircraft deliveries until 2014. It joins the Philippines’ youngest aircraft fleet, now composed of 10 Airbus A319, 12 Airbus A320 and 8 ATR 72-500 aircraft. It has an average fleet age of 3.21 years.

CEB’s brand-new Airbus A320 is equipped with the latest avionics from Thales and Rockwell Collins, both global leaders in aviation electronics. The aircraft will be based in Ninoy Aquino International Airport Terminal 3 to support flight increases and network expansion.

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Owners of Cebu Air consider airports bid

The family business that controls Cebu Air, one of Asia’s biggest budget airlines, is considering bidding for some of nine government-owned airports in the Philippines that are to be privatised by president Benigno Aquino III beginning next year.

Lance Gokongwei, chief executive of Cebu Air, said JG Summit Holdings, the Gokongwei family company, was thinking seriously about acquiring some of the airports, which are to be privatised as part of a $9bn infrastructure upgrading programme.

By Roel Landingin and Kevin Brown in Manila

Published: November 1 2010 00:09 | Last updated: November 1 2010 00:09

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Sunday, October 31, 2010

Pilot shortage grounds Airphil Express flights

Low-cost airline Airphil Express was forced to either cancel or delay several domestic flights over the weekend because of a shortage in pilots, company officials said.

Airline officials said 8 flights were cancelled while 4 others had to be delayed Sunday. Nine flights were cancelled while 4 others were cancelled on Saturday.

The company said it did not expect a surge in the number of passengers in October.

Airphil Express has 20 pilots but they have all exceeded their quota in flying hours, company spokesperson Maria Jaha said. 

Airphil Express addressed the crisis by borrowing the pilots of sister company Philippine Airlines.

Some passengers eventually got on board an Airphil Express aircraft and left for the provinces on Sunday after hours of waiting. 

Others, meanwhile, were forced to rebook their flights.

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Manila airport staff get warning

Personnel at the Philippines’ Ninoy Aquino International Airport (NAIA) Saturday received a warning from the airport manager not to “pester” arriving Filipino overseas workers and other passengers for holiday gifts as the Yuletide season approaches.
In a radio interview, Manila International Airport Authority general manager Jose Angel Honrado warned NAIA personnel that they face stiff sanctions if caught asking for gifts or cash from arriving passengers, saying this is unethical.
“They should not sing or say anything to the passengers hinting about receiving holiday gifts,” Honrado said in a radio interview.
However, he said airport officials would not censure Immigration and Customs personnel if they voluntarily receive gifts from “generous” passengers.
“Sometimes you cannot avoid it if a generous passenger gives you a gift. But definitely there will be no leeway for those who ask for gifts,” he said.
As the airport gets busier with the expected increase in the number of arriving and departing passengers at this time of the year, Honrado renewed his order to concerned personnel to tighten security measures with special focus on human trafficking syndicates that continue to victimize Filipino jobseekers.
He said he has specifically ordered tighter measures at NAIA Terminal 1, where many foreign airlines operate.
He said he also ordered closer coordination with the other concerned government agencies to prevent trafficking syndicates and other lawbreakers from setting foot on Philippine soil.

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Women in blue overalls

MYLENE EBREO, a crew chief for avionics with Lufthansa Technik Philippines, joined the male-dominated and indeed macho world of airline mechanics more than 10 years ago. The company was then still exclusively providing ground maintenance, repair and overhaul services to Philippine Airlines, and Mylene was one of the few women to be admitted to the mechanics’ ranks.

“The men would look askance at us as we walked by,” Mylene recalls, “and some of the older male supervisors refused to deal with us directly.” But through sheer hard work and reliability “My” was able to gain the trust of her supervisors and today finds herself supervising crews of as many as 80 mechanics, most of them men, per shift.

The skepticism and resistance of their male co-employees are part and parcel of the job, says My and two other women contemporaries at LTP: Shirleen “Pinky” Estrada and Ditas “Ditz” Velasco-Salayon. “We should be strong,” declares My.

Pinky is a foreman (foreperson?) dealing with the structural integrity of the aircraft they service, while Ditz is a foreman with primary responsibility for coordinating interiors.

What special qualities do women bring to their jobs with LTP? Mylene believes it is women’s natural eye for detail. “Matiyaga ang mga babae (Women are more persevering),” she notes, adding that working on aircraft demands painstaking attention to the smallest details, from using the right airplane parts to finding the tiniest cracks in airplane bodies.

* * *

ASIDE FROM being “mabusisi (painstaking),” the women mechanics are also important for what LTP vice president for marketing Dominik Wiener-Silva calls “customer interface.”

“Beauty is an asset, especially with Europeans,” says My with a smile. Since they work with client representatives from different parts of the world, it’s important for the mechanics to be able to communicate well and convey all the issues involved in the MRO—maintenance, repair and overhaul—of aircraft. Certainly a winning personality and ability to win over clients is an asset.

“We also do our job faster,” adds Pinky, who says that keeping “turnaround time” to a minimum is a prime demand of clients who of course want to keep their aircraft in the air as long and as often as possible.

Ditz tells the story of one assignment that brought her to Hong Kong to consult with an airline

that wanted their fleet interiors refurbished. At first, she says, she sensed that the client representatives couldn’t seem to bring themselves to trust her until she realized that “the common image of the Filipino woman in Hong Kong is that of a domestic helper.” One client even told her: “I couldn’t believe that you are intelligent!” But she proved her mettle, says Ditz, during a discussion on the configuration of the lavatory and she cited from memory the part number of a particular type of lavatory door lock. The clients were properly impressed.

Their work, the women concede, has brought them to foreign assignments a number of times, including training stints at Lufthansa Technik’s global headquarters in Hamburg, Germany. But Ditz, for one, says she’s no longer as eager for foreign assignments, especially long-term ones. “Our children are growing up, and six months is too long to be away from home.” Both My and Ditz are married with children while Pinky is single. “By choice,” Ditz interjects.

* * *

LUFTHANSA Technik Philippines employs 366 women out of a total of 2,700 employees, about 13 percent. Not an impressive number really (the United Nations recommendation for achieving a gender “critical mass” is 30 percent), but as Wiener-Silva points out, “it’s the largest percentage in the world,” and in the industry.

The women of LTP assume the same responsibilities as the men, and go through the same four-step training until they reach the status of Mechanic A. While Tess Fajardo, LTP vice president for human resources, doesn’t cite salary figures, she says that when ranged against the wages of the only comparable occupation of an auto mechanic, the airline mechanics at LTP are certainly compensated well.

A definite plus are the pretty short and regular work hours. “If we start work at seven in the morning,” says Mylene, “and we work fairly fast, the entire team can go home around three in the afternoon.” Mylene, as team leader, is crucial in this aspect, as it is her responsibility to plan the day’s work scope and assign the people to their tasks.

Ditz, for her part, is an active member of the Employee Council, with gender relations in the workplace as a special concern. While the still-lopsided gender balance provides fertile ground for sexual harassment, the problem seems to have been tamed at LTP. “We’ve had about one or two cases of sexual harassment in the last 10 years,” says Ditz. My, who is the most senior of the three women, concedes that the problem was much worse at the start, but now “the men have gotten used to us.”

* * *

A VISIT to LTP’s five-bay hangar is necessary to fully grasp just how impressive is the work done by this German-Filipino partnership. At the time we visited, crews were working on two aircraft of Virgin Atlantic Airways. The planes were stripped to bare metal in parts and surrounded by a metal exoskeleton of scaffolding. Around them swarmed mechanics in dark blue overalls, looking like Lilliputian villagers swarming over the two beached giants.

Air passengers rarely give a thought to the work done while the airplane is grounded. But the quality of the MRO work, as much as the skills of the pilots and cabin crew, will determine the quality of the flying experience, especially whether passengers and crew survive. They may be unseen, but the men and women of LTP are key to ensuring we arrive alive.

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DoLE allows mass layoff of 3,000 PAL employees

Labor Secretary Rosalinda Baldoz has allowed Philippine Airlines’ planned mass layoff of some 3,000 employees when she affirmed the previous order of then acting labor secretary Romeo Lagman denying the motion for reconsideration of the ground crew union at the national flag carrier.

“We find the outsourcing of services and closure of the Inflight Catering, Airport Services, and Call Center Reservation Operations in Philippine Airlines to be a just, reasonable, humane, and lawful exercise of its management prerogative to reorganize the corporate structure for purposes of viability of its operations, subject to entitlement,” according to the order dated 29 October 2010, a copy of its dispositive portion was obtained by

In contrast to Lagman’s 15 June 2010 order, Baldoz’s ruling provides for an additional gratuity of P50,000 per employee and 125 percent separation pay instead of 100 percent. Other entitlements include allowing vacation leave and sick leave balances to be convertible to cash, their absorption to the respective service providers for one year, among others.

Sought for a reaction, PAL said it could not issue one as it has not yet received a copy of the decision.

In a news release, PAL Employees’ Association (Palea) the slammed Baldoz’s decision.

Palea president and concurrent vice chairman of the Partido ng Manggagawa (Workers’ Party) Gerry Rivera said: “The Department of Labor and Employment’s go signal for the retrenchment of half of the workforce means the death of job security at Philippine Airlines.”

Rivera said the union intends to appeal the decision at the Court of Appeals.

At the same time, he said, members of Palea and PM will hold a mass action at the DoLE main office in Intramuros to denounce Baldoz’s order. The protesters plan to bring a mock coffin with the message “RIP PAL Workers” and an effigy of Baldoz as the mythical “Kamatayan.”

Rivera explained that Baldoz’s decision entirely disregarded the union’s arguments and merely reiterated PAL’s position that it must outsource work to service providers in order to be financially viable.

“The order is not a win-win solution that balances the interest of workers for job security and management’s for financial viability. Instead it is simply management’s slightly improved offer disguised as DoLE’s decision,” he said.

Rivera said that Baldoz’s order means allowing the contractualization at PAL via a retrench-rehire scheme. He said PAL will retrench 3,000 regular unionized workers who will be rehired as contractuals by service providers that are partly owned by Lucio Tan.

“The loss of 3,000 regular jobs cannot be compensated by the creation of 3,000 new contractual positions. Baldoz’s decision released on the eve of All Souls’ Day is symbolic for it will conjure up 3,000 zombie positions which will have cheaper wages, fewer benefits, no security of tenure, and no protection by a union,” he said.

Palea also declared that the mass action tomorrow is just the start of a series of protests by PAL employees and their supporters from the labor movement.

An assumption of jurisdiction order from DoLE had prevented Palea from holding mass actions, including a strike since April this year. A similar assumption order was imposed on the Flight Attendants and Stewards Association of the Philippines while a decision remains pending at the office of Secretary Baldoz regarding the separate dispute about retirement age and other issues.

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Friday, October 29, 2010

Airphil Express to acquire 20 aircraft in next 3 years

Using its P10-billion expansion program, budget carrier Airphil Express will acquire 20 aircraft in the next three years to service both its domestic and regional operations, an airline official said Friday.

This move is intended to meet the growing demands of people to travel by air, said Airphil Express executive vice president and COO Cesar Chiong.

“Our forward booking is very strong and we expect to close the year with compelling numbers," Chiong said, noting that the low-cost carrier already “exceeded its revenue expectations" for September and October.

“After our maiden flight to Singapore, we will fly to other regional routes like Hong Kong and Thailand in the coming months," he said.

Airphil Express, formerly Air Philippines, had its debut flight from Manila to Singapore on Wednesday. The carrier will fly 14 times to and from Singapore.

“This new air transport link is a strong indicator of the growing connectivity between our two countries…. This will spur business and trade, strengthen the bonds among Southeast Asians, and facilitate cultural interaction," said Consul General Neil Imperial of the Philippine Embassy in Singapore.

Apart from Airphil Express, Philippine Airlines, Singapore’s Jetstar, and Cebu Pacific fly on a daily basis to and from Singapore.

Airphil Express’ Manila-Singapore flights

leave at 4 p.m. while the airline’s Singapore-Manila flights leave at 8 p.m.

The low-cost carrier will add Cebu-Singapore (vice versa) routes on Dec. 1.

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Jin Air Kicks Off Regular Flights to DMIA

South Korea’s budget carrier Jin Air on Wednesday officially started regular international flights at the Diosdado Macapagal International Airport (DMIA), plying the Incheon-Clark-Incheon route five times weekly.

Clark International Airport Corp. (CIAC) President and CEO Victor Jose Luciano welcomed the 170 passengers of the Boeing 737-800 who departed at about 1 a.m. at the DMIA Terminal signaling the full operations of Jin Air at the 2,367-hectare Clark Civil Aviation Complex in the Clark Freeport Zone in Pampanga.

Luciano and CIAC Vice President for Administration and Finance Lauro Ortile also welcomed Jin Air’s President and CEO Kim Jae Gun who was among the passengers of the Boeing 737-800 aircraft. A simple welcome ceremony was held at the DMIA Terminal initiated by the personnel of the Clark International Airport Corporation (CIAC).

Jin Air is the latest budget carrier operating at DMIA after Air Asia of Malaysia and Tiger Airways of Singapore.

Jin Air has five Boeing 737-800 aircraft in its fleet for their operations in the South East Asian region, including Japan.

Jin Air adds to the host of foreign and local carriers operating international and domestic flights at the DMIA that include Asiana Airlines that flies daily to Incheon; Tiger Airways that flies daily to Singapore; and, Air Asia that flies daily to Kuala Lumpur and Kota Kinabalu.

Also operating flights at the DMIA is local carrier Cebu Pacific Air flies to Hong Kong, Singapore, Macau, and Bangkok as well as domestically to Cebu, the Spirit of Manila Airlines that flies to Taipei, and South East Asian Airlines (Seair) that flies via to Caticlan. (AMR)

“We welcome Jin Air’s regular flights at DMIA that would not only bring in more Korean tourists to Clark but also give the people of Northern Luzon the opportunity to visit the beautiful country Korea,” he added.

Jin Air is a full subsidiary of Korean Air.

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Thursday, October 28, 2010

Aquino Vows to Improve Facilities in Spratlys

Is this called "Tweaking the nose of a sleeping giant???"

HANOI – The Philippine government will proceed with plans to improve military facilities in the Kalayaan group of islands in the disputed Spratlys, according to President Benigno S. Aquino III.

In an after-dinner talk with reporters at the Grand Plaza Hotel here last Wednesday night, Aquino said his government wants to improve the dilapidated airstrip on the Kalayaan Islands soon.

Aquino said the administration would formally inform other claimants to the Spratly Islands of the plan when all details have been finalized.

Navy Spokesman Lt. Col. Edgard Arevalo had earlier said that the repair and maintenance of the outpost and airport runway are necessary for the delivery of supplies to troops stationed on the group of islands being contested by the Philippines, Malaysia, Brunei, Vietnam, and China.

The Spratlys is a group of more than 750 reefs, islets, atolls, cays, and islands in the South China Sea believed to contain significant oil and gas reserves.

The Philippines is proceeding with the repair, despite opposition from emerging superpower China.

Earlier, Chinese Ambassador to Manila Liu Jianchao had informed the Department of Foreign Affairs (DFA) that the Philippine government’s plans to repair facilities in the Spratlys are not a welcome pronouncement, especially in light of the Aug. 23 Manila hostage incident in which eight Hong Kong tourists were killed.

Attending his first Association of Southeast Asian Nations (ASEAN) Summit here, Aquino hhad earlier said that he would call for a “more formalized plan” in dealing with the disputed Spratlys Islands during the Oct. 28-30 meetings.

The Philippine leader said he will reiterate the call for adherence to the Code of Conduct over the South China Sea during one of his speeches for the ASEAN Summit.

“(We will) reiterate the call for adherence to the code of conduct and an even more formalized plan towards exploiting it (Spratly Islands) perhaps on a cooperative basis. It (the call) will be part of one of my speeches,” he said.

This position was shared by Vietnamese President Nguyen Minh Triet during a bilateral meeting with Aquino last Tuesday afternoon at the Presidential Palace.

The two leaders also have a similar stand with regard to their neighbor, the junta-ruled Myanmar(the former Burma).

Before the start of the 17th Association of Southeast Asian Nations (ASEAN) Summit at the National Convention Center here, Aquino and Thailand Prime Minister Abhisit Vejjajiva met and agreed for more cooperation between their governments in dealing with common problems such as the effects of their strengthening currencies against the United States’ dollar.

Meanwhile, former Association of Southeast Asian Nations (ASEAN) Deputy Secretary- General Dr. Wilfrido Villacorta has been appointed as the new ambassador to the ASEAN, replacing former Sen. Orlando Mercado.

The President said Villacorta's name has been submitted to the Commission on Appointments.

Villacorta, a professor emeritus of De La Salle University, was a member of the 1986 Constitutional Commission.

He was also chairperson of the National Institute for Policy Studies (NIPS).

Asked on his expectation for the Oct. 28-30 17th ASEAN Summit and its related summits, Aquino said: “As we can gather from the theme 'From Vision to Action,’ one really wants to see that there are many problems that affect the entire region from global warming to the issue of piracy, to so many other issues that really affect not only one state. . . even the growth of our economy is so dependent on acting in unison or in concert with those who are closest neighbors.”

“So we expect that after this ASEAN summit, there will be more concrete steps towards harmonizing and really unifying the entire ASEAN region to act as one for the continuum of the problems that we all face,” he said.

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Google Stirs Up Travel Distribution Market

Google’s deal to acquire ITA Software for $700 million creates the potential for the search engine giant to shake up airline travel distribution, although Google has not detailed its plans. That leaves airlines, online travel agencies and other players to wonder whether this should be viewed as an opportunity, a source of angst or both.

“Speculation and even paranoia abound as travel companies grapple with the implications of the convergence,” says PhoCusWright, which studies how consumers buy travel. Part of the reason for that concern, PhoCusWright Research Director Carroll Rheem says, is just that Google is so big and influential.

ITA is key in the air travel distribution world, having created some groundbreaking flight, fare and seat-availability search capabilities and with a client list that includes many of the major U.S. carriers, Virgin Atlantic, online travel agencies Hotwire and Orbitz, “meta-search” aggregator Kayak, Trip Advisor and Microsoft’s Bing search engine. Some industry observers question whether an ITA client such as Kayak will want to continue using a product owned by a competitor. But Google Chairman/CEO Eric Schmidt emphasizes that Google plans to “honor all existing agreements [with ITA] and add many new partners.”

Schmidt also says Google plans to use ITA only to create flight search capabilities, providing results that would direct users to airline websites or online travel agencies (OTAs) to make the booking. Google does not plan to have its own booking engine.

“We think we can drive even more business to airlines and online travel agencies, and, as a result, we think this will also benefit Google’s overall search capability,” boosting its users and usage, he says.

Schmidt also adds some uncertainty on the matter, however, by vowing that the flight search capability Google offers will be different than anything currently seen, including Kayak’s aggregate results from multiple airline and OTA sites. “Part of the goal of the merger is in fact to do something quite different than what is available today,” Schmidt says.

What that would be is not clear. Google is not yet providing much insight into where it believes it is heading, other than one example it provided in which a user could query, “Where can I get within seven hours and with this price?”

Google’s Marissa Mayer, vice president of search products and user experience, describes that as one of the “innovative” possibilities, but it actually is not new. Late last year Lufthansa debuted a new Amadeus flight shopping tool, Affinity Shopper, that lets potential customers search for flights with criteria such as price, type of trip and region or country. Kayak offers a similar feature that also includes criteria such as average temperature and languages spoken.

Google, however, could catch consumers very early in the travel-buying process—or even before they are thinking of buying, if, for example, a search query or g-mail message indicates interest in a particular country or destination. Its travel search tool is likely to be integrated into its search engine, not confined to a separate tab or page, Rheem says.

While Google is not providing much detail on its direction, the acquisition—which will be reviewed by antitrust regulators before it can be completed—has the travel distribution community buzzing about the potential impact.

One risk for airlines is that their websites will be hit with more searches that do not result in bookings, as Googlebot crawls their sites in response to queries. With Google’s global reach, that could be a lot, notes Henry Harteveldt, vice president and principal analyst for Forrester Research. That global reach, however, also presents another opportunity for airlines to grab more customers, adds Harteveldt.

Airlines are also concerned that Google might aim to make money off the searches, beyond the standard industry model of the seller paying “per click” or “per acquisition” for consumers who come to their site via a Google search.

For now, Schmidt says only that the “economic structure” is something “we’ll sort out later.” That vagueness worries sellers, Rheem says, because the more relevant Google search becomes and the more reliant consumers become on it, the more power Google will have over advertisers, since it also sells ads based on search keywords.

Rheem says Google’s entry into the travel market is not likely to alter the competition between airlines and OTAs for bookings because Google is known for search result neutrality. But Harteveldt says that within minutes of the Google-ITA announcement, he heard from travel industry marketing and distribution professionals concerned about how Google would present airlines and OTAs when a user makes a flight query.

On its general search page, Google sells keyword-triggered ads that separately list sponsored links in the search results. The big OTAs have more money to spend on marketing than individual airlines, so they could have an advantage, Harteveldt says.

But there are also are potential opportunities for airlines, he adds. That is because Google’s new flight search tools—which presumably will include flight dates and other criteria—could give them better insight into the intent of consumers and help them more effectively target their keyword-related marketing dollars.

For example, he says, an airfare search for travel within the next three days may indicate either a business trip or last-minute vacation, and a travel seller can choose to bid more for related keywords if those types of trips suit its strategy.

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Budget Carriers to Challenge Larger Rivals on Int'l Routes

Five years after they burst onto the scene, domestic budget carriers are turning up the heat on larger airlines by launching international flights.

Jeju Air, Korea's biggest budget airline, said on Wednesday it plans to start flying between Incheon and Hong Kong, taking on Korean Air currently operating 23 flights and Asiana Airlines 14 on the route. While Jeju Air will offer only three flights per week, it aims to lure passengers with fares at least 30 percent lower than those of its larger rivals.

Jin Air on Tuesday launched service from Incheon to Clark in the Philippines, pushing into a route previously served solely by Asiana. A Jin Air spokesperson said that the flights would run at night and early morning to differentiate from Asiana, which flies during the day. The new service is targeted at tourists, especially those on golf trips.

Jeju Air also plansto launch flights to Manila on Nov. 24 and Macau on Nov. 29. In addition, it will find itself going head-to-head with another budget carrier, Air Busan, when they both debut flights between Busan and the Philippine resort city of Cebu on Nov. 25 and Dec. 23, respectively.

Foreign budget carriers are fueling the competition. Business Air Thailand has already launched Incheon-Bangkok service, while Malaysia's AirAsia, the region's largest low-cost carrier, will start operations connecting Incheon with Kuala Lumpur next month. By the end of the year, larger airlines and budget carriers are expected to be competing on 10 international routes.

In the first nine months of the year, domestic budget carriers transported a combined 632,000 passengers on international routes, accounting for 3.18 percent of the total 19.895 million international passengers. The figure has quadrupled from 0.75 percent last year.

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Airphil Express launches daily flights to Singapore

Airphil Express (APX), the low-cost carrier of tycoon Lucio Tan, is now serving daily flights to Singapore as it operates at Changi Airport's premier Terminal 2.

In a statement, APX said it started to fly the Manila-Singapore route on Tuesday, October 27.

APX operates at the Terminal 2 at the Changi airport in Singapore to give its passengers a better shopping experience.

Other budget airlines, including local carrier Cebu Pacific, operate at Changi's Terminal 3, which was designed for the fast turnovers and other operational needs of a typhical no-frills flights.

"Duty free shopping is expansive at Terminal 2 and it is ingrained in Filipino culture to bring home gifts from travels abroad," said Maria Java, APX vice president for marketing and media.

She continued, "Travelers out of Singapore to the Philippines have been very receptive of our start of operations. Even before our maiden flight on October 27, our forward sales for December are now close to full for both Singapore-Cebu and Singapore-Manila."

APX's Manila-Singapore flights leave at 4 p.m. from Monday to Sunday. The airline said it will promptly add daily Cebu-Singapore flights on December 1.

Flag carrier Philippine Airlines, led by Tan, is the sister company of APX.

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‘This is age of LCC revolution’: Airphil Express boss

The rapid rise of low cost carriers (LCC) is changing the way people travel and distribution needs to change accordingly, said Airphil Express chief executive Brian Thomas Hogan.

At Aviation Outlook Asia Mr Hogan told e-Travel Blackboard that distribution systems need to adapt in line with airline evolutions.

“Airlines are trying to cooperate and reservation systems need to do the same,” Mr Hogan said, on a panel discussing travel distribution.

Also on the panel with Mr Hogan was Bahrain Air commercial director Richard Nuttall, who said the advent of the internet has been “disruptive”, soon to force expensive GDS models to compete with “new solutions in distribution”.

Due to the different nature of the Philippines market, Mr Hogan said his carrier had to use alternative distribution channels to cater to the needs of the nation’s travellers.

“In some Philippines provinces you may be able to book tickets but making the payments can be difficult, so we allow third party credit card transactions,” he said.

Mr Hogan detailed Airphil Express’ use of sales agents and even pawn shops to expand payment and distribution channels, given a lack of internet penetration in the market.

“There’s no such thing as a traditional low cost carrier in the Philippines,” he said, but added that the market was ripe for low cost travel.

According to Mr Hogan, we are in the age of a “low cost carrier revolution”.

“What low cost carriers have done is amazing,” he said and told e-Travel Blackboard the story of Airphil Express’ arrival into Tawi Tawi.

“We were greeted by bankers in tears because we not only opened up the market but provided a safe means to send cash.”

“We’re bringing air travel to the masses.”

From zero per cent of the market share of Philippines air travel in 2004, Airphil Express, with LCC rival Cebu Pacific, now have almost 65 per cent market share, he said.

Their success, Mr Hogan told e-Travel Blackboard, is because Airphil Express concentrates on value and service and makes considerable efforts to “really be in the market and localise accordingly”.

On Google’s potential entry into distribution, Mr Hogan said simply, “Bring it on”.

“At the end of the day the goal of the company is to sell flights and if someone can help me get distribution then I don’t care.”

Travel agents are not ignored in Mr Hogan’s airline strategy, representing a necessary distribution and information channel.

“Travel agents are our partners,” he said.

“In the end, we all have the same goal: to get people travelling.”

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Philippines - Jurassic presidential aircraft

Jurassic presidential aircraft

The Philippine President flew to Vietnam on a $3-million refurbished Marcos era F28 short range jet which the Philippine Air Force bought more than 35 years ago. The aircraft was eventually used extensively by P-Noy’s mother, Mrs. Aquino. FVR contemplated on the idea of purchasing a presidential aircraft when Boeing came out with a reasonable offer for an executive jet with very convenient terms. But the idea was quickly shelved when it later became clear that he was not going to stay longer than six years as president. The Philippines may not exactly be a rich country but there are many practical people who believe that it would be wise for the chief executive of this country to have a new aircraft considering we have 7,100 islands. Besides, the Fokker F28 has already reached its shelf life and is “way past its bedtime.” The aircraft has too many safety issues plus the fact that it is expensive to maintain with limited landing and takeoff capability for short runways. It’s the classic “penny wise, pound foolish.”

SPY BITS By Babe Romualdez (The Philippine Star) Updated October 28, 2010 12:00

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Tuesday, October 26, 2010

Cebu Air Gains After Completing World's' Biggest IPO for Low Cost Carriers

Cebu Air Inc., the Philippines’ second-biggest carrier, climbed in its trading debut in Manila after the airline completed the nation’s biggest initial public offering in five years.

The stock rose 6.4 percent to 133 pesos at the 12 p.m. close on the Philippine Stock Exchange from its IPO price of 125 pesos. The carrier and parent JG Summit Holdings Inc. raised 23.33 billion pesos ($540 million) in the share sale. The airline’s market value is about 81.6 billion pesos.

The carrier will use the proceeds to acquire planes as it takes delivery of 24 aircraft by 2014 to increase flights, President Lance Gokongwei said today in Manila. Cebu Air estimates revenue from international routes will make up half of sales after five years, outpacing growth in domestic demand.

“Cebu Air offers a good play on Philippine tourism and a proxy on consumer spending,” said Olan Caperina, who helps manage about 500 billion pesos at Manila-based Bank of the Philippine Islands. “At its IPO price, the stock is valued at 13 times estimated earnings, which is cheaper than the overall market.”

JG Summit fell 3 percent to 24.25 pesos. The company gets about half its revenue from food, agriculture and commodities, and 24 percent from air transportation.

Overseas Investors

Cebu Air, which plans to fly 10 million passengers this year, sold 30.66 million shares in the IPO. Manila-based JG Summit sold 155.98 million existing shares. As much as 70 percent of the offering was allotted to overseas investors.

The airline had net income of $68.4 million in the first half of this year, according to its IPO prospectus. The document also said Cebu Air carried more passengers on domestic flights in the period than its bigger rival Philippine Airlines Inc., which is involved in a labor dispute with flight attendants and has a shortage of pilots.

The share sale surpassed AirAsia Bhd.’s $227 million IPO in 2004 and Ryanair Holdings Plc.’s $160 million initial share sale in 1997, Cebu Air said in a statement today. Ryanair’s market value has climbed to 6.2 billion euros ($8.7 billion) at yesterday’s closing price, while AirAsia was worth 7.1 billion ringgit ($2.3 billion) at the 12:30 p.m. break in Kuala Lumpur.

The Manila-based carrier aims to fly 20 million passengers by 2014, Gokongwei said in a speech today. International fliers will increase by as much as 35 percent, while local passengers will rise by 15 percent over five years, he said.

Market Share

Cebu Air has a fleet of 29 jets that fly to 33 Philippine and 16 international destinations. The company said its share of the domestic market is almost 50 percent while it controls 15 percent of international passenger traffic into the Philippines.

The IPO, which was priced at the middle of the 110 pesos to 135 pesos range targeted by the airline, is the Philippines’ largest since 2005, when SM Investments Corp. raised 28.8 billion pesos.

JG Summit will use its estimated $400 million share of proceeds from the sale for debt payment. The company has $300 million of debt due between 2011 to 2013, Bach Johann Sebastian, senior vice president at Cebu Air and vice president at JG Summit, said today.

Cebu Air also said it may sell an additional 28 million shares should demand exceed the stock on sale. Citigroup Inc., Deutsche Bank AG, JPMorgan Securities Ltd. managed the overseas sale of the shares while ATR KimEng Capital Partners Inc. arranged the domestic component of the offering.

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Philippines' biggest IPO Cebu Pacific Air soars 7% on debut

Budget airline Cebu Air Inc. jumped as much as 6.8% on its debut on Tuesday, as the country's largest public offering rode on the back of a broader market that hit a fresh record high.

The airline, a unit of conglomerate JG Summit Holdings Corp. and the second biggest Asian budget carrier by market value, raised $611 million in its IPO including a greenshoe option, making it a record amount in dollar terms for a Philippine listing.

Cebu Air's debut takes place amid a boom in IPOs in Asia as well as strong foreign demand for high-yielding emerging markets such as the Philippines.

The Philippine stock market hit a record high on Tuesday. Upbeat sentiment following presidential elections in May have helped lift the index about 40% this year and it is the second best performer in Southeast Asia after Indonesia.

This backdrop bodes well for upcoming listings in the Philippines, analysts said. Philippine miner Nickel Asia plans to raise $162 million in an IPO next month.

"Having launched successfully, the ones apprehensive on the sidelines are now emboldened to come in," said Alejandro Yu, president of R.S. Lim and Company, a local stock brokerage.

Cebu Air's shares opened at P132 after a ceremony that included flight attendants dancing the flight safety routine to a Lady Gaga pop song on the stock exchange trading floor, peppered with tube balloons carrying the airline's yellow orange colours.

The safety routine dance was a big hit on You Tube earlier this month.

The stock rose as high as P133.5, before closing at P133. The airline had sold about 215 million shares at its IPO at P125 each, Cebu Air's parent said late on Monday.

At Tuesday's close, Cebu Pacific was valued at nearly P97 billion or $2.2 billion, larger than rival Tiger Airways at about $723 million but smaller than Malaysia's AirAsia, valued at about $2.3 billion.

Growth eyed

Cebu Air CEO and President Lance Gokongwei said he expects the company's international business to overtake its domestic operations in four to five years as it seeks to increase its international capacity by 25% yearly via new foreign routes and flight frequencies.

"A natural progression in market share dictates that we will grow faster internationally than domestically," Gokongwei said, adding local operations now account for 62% of revenue.

"Revenue growth would be above 20% in the next 4 to 5 years, and hopefully our objective is to retain our margins," he said.

Cebu Air plans to use its share of the proceeds to buy more aircraft from Airbus to better compete with rivals regionally and Philippine flag carrier Philippine Airlines. It expects delivery of three more aircraft this year and 5 next year.

The airline flew the most number of passengers domestically in the first half, topping Philippine Airlines, and also flies 16 Asian routes.

Yu said the Cebu Air IPO was a big boost in confidence for the Philippine market and the company's plans to increase its flight frequency would attract business travelers, adding to its present client base comprising mostly of tourists.

Based on its IPO price, Cebu Air will trade at just over 10 times estimated December 2011 earnings, in line with Air Asia, which trades on a PE of 9.1 times 2011 earnings. Tiger Airways trades at 16.1 times forecast March 2011 earnings.

The IPO takes place against a backdrop of a flurry of new listings in Asian markets. Singapore wealth fund's GIC logistics unit GLP started trading last week and AIA, the Asian life insurance arm of AIG makes its debut later this week in what looks set to be the world's third biggest IPO.

Citigroup, Deutsche Bank and JP Morgan are joint global lead managers for the share sale, and ATR KimEng Capital Partners is the local lead underwriter.

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Old jet Jocky

A ragged, old, derelict shuffled into a down and dirty bar in Colorado Springs at dawn. Stinking of whiskey and cigarettes, his hands shook as he took the "Piano Player " Wanted" sign from the window and handed it to the bartender.

"I'd like to apply for the job," he said. "I was an F-4 jet jockey and a Lieutenant Colonel in the Air Force, but when they retired the Phantom, all the thrill was gone, and soon they cashiered me as well.  I learned to play the piano at O-Club happy hours, so here I am."

The seedy Lieutenant Colonel  staggered his way over to the piano while several patrons snickered. By the time he was into his third bar of music, every voice was silenced. What followed was a rhapsody of soaring music, unlike anything heard in the bar before. When he finished there wasn't a dry eye in the place.

The bartender took the old jet jockey a beer and asked him the name of the song he had just played.

It's called "Drop your Skivvies, Baby, I'm Going Balls To The Wall For You !" said the Lieutenant Colonel.  After a long pull from the beer, leaving it empty,  "...and I wrote it myself."

The bartender and the crowd winced at the title, but the piano player just went right on into a knee-slapping, hand-clapping bit of ragtime that had the place jumping. After he finished, the jet jockey acknowledged the applause, downed a second proffered mug, and told the crowd the song was called, "Big Boobs Make My Afterburner Sizzle."

He then excused himself and lurched to the john.

When he came out the bartender went over to him and said, "Look fly boy, the job is yours ... but do you know your fly is open and your Johnson is hanging out?"

"Know it?" the old flyboy replied, "Hell, I wrote it!".

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747 taking off from Amsterdam. JUST

EVA Air Boeing 747-45EM taking off from runway 36L at Amsterdam Schiphol , Netherlands .
The great timing and angle just makes this shot, and the size of the 747 look surreal.
The distance to the fence was 145 meters (475ft)...
I wonder if anyone computed the takeoff distance prior to the trip.

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Sunday, October 24, 2010

Mail Package Yields P2-Million Shabu Ingredient

The package says it's from India but Customs officials found something else – a dangerous chemical substance used in the manufacture of shabu or the poor man's cocaine.

A Customs broker is now in hot water after operatives of the Customs Enforcement and Security Service (ESS) intercepted the shipment of three kilos of ephedrine at the Central Mail Exchange Center (CMEC) near the Manila Domestic Airport.

The chemical compound was hidden in a package that came from India.

In an interview, ESS acting Director Joey Yuchongco said the package was consigned to a certain “Juan Carlos” of Salcedo Village Makati City.

“Upon field testing, it resulted positive for ephedrine with an estimated value of P2 million,” Yuchongco, also the Customs Police chief, said. He submitted a report to Customs Commissioner Angelito Alvarez.

Ephedrine is a chemical compound used in the manufacture of methamphetamine hydrochloride or shabu.

Yuchongco said Customs broker Jason Perez went to CMEC to claim the box. However, upon closer examination, it was found it contained the illegal substance hidden inside.

ESS operatives arrested Perez following the discovery.

He said the illegal substance was brought to Philippine Drug Enforcement Agency (PDEA) office at Ninoy Aquino International Airport (NAIA) for proper disposition while the broker is subject for investigation.

As to the package's sender, Yuchongo was clueless on his real identity, saying that the name stated on the airway bill may be “fictitious.”

Authorities are still investigating who is the source of the illegal drug.

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