Thursday, January 28, 2010

Clark airport expansion to force Subic airport closure

PAMPANGA, Philippines--The ongoing expansion of the Diosdado Macapagal International Airport in Clark may prompt the conversion of the Subic Bay International Airport into a logistics and commercial area, according to the Subic Bay Metropolitan Authority.

SBMA Administrator Armand Arreza said the agency was currently studying the possibility of permanently closing the airport and using it for other purposes.

However, no final decision had been made on this.

“We’re looking at the conversion of the airport (into a logistics and commercial area). With the developments at Clark, maintaining an airport at the Subic Freeport will not be feasible,” Arreza told reporters.

He explained that for an airport the size of SBIA to at least break even, it needed to have 12-15 flights a day.

“With the expansion of the Clark airport, it’s hard to imagine the Subic airport breaking even. It takes around P250 million a year to maintain the airport—P150 million for debt service and P80 million to P100 million for operational expenses,” he said.

“When FedEx was still there, we were breaking even. Without FedEx, we are now losing money.”

US delivery giant Federal Express used Subic as its Asian hub for 14 years. However, it closed the Subic operations and transferred to Guangzhou, China in February last year.

About 800 direct and indirect workers lost their jobs due to the closure of FedEx in Subic.

The SBMA also lost some P150 million in annual revenue from leased airport facilities and daily aircraft landing fees.

Arreza said that even if there was no final decision yet on what to do with the airport, a number of investors had already expressed interest in how the area could be developed.

“The goal really is to eventually make Clark the country’s main airport. Subic could still be a subsidiary airport, but we’re still thinking about what to do with the airport,” he said.

The total area of Clark’s DMIA, at some 2,300 hectares, is around three times the size of the Ninoy Aquino International Airport in Metro Manila.

Only a third of the total area is being utilized. Its two working runways, left by the United States Air Force, are long and big enough to accommodate wide-body aircraft.

The first phase of its expansion involved the construction of a P150-million passenger terminal that boosted annual capacity from 500,000 to two million passengers.

Kuwaiti firm Almal Investment Co. had proposed to develop the DMIA for $1.2 billion

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