Philippines Aviation NEWS

Sunday, November 21, 2010

Senators berate CAAP for failing to improve aviation status

MANILA, Philippines—Senators were dismayed over the failure of aviation authorities to bring the Philippines from Category 2 to Category 1 despite getting P50 billlion in seed money two years ago.

Senator Ramon Revilla Jr., co-chair of the Congressional Oversight Committee on the Civil Aviation Authority of the Philippines (CAAP), reprimanded officials for failing to do their job of convincing the Federal Aviation Authority (FAA) to upgrade the Philippines from Category 2, which barred flights from the country to the United States, and prevented other carriers from increasing flights to the same country.

Revilla said this prompted Senate President Juan Ponce Enrile to berate the AAP officials and called them "stupid."

"We are suffering tremendous opportunity losses in tourism. Where did all the money go?
They have to shape up or ship out," said Revilla.

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Philippines seeks removal from aviation blacklists

MANILA — The Philippines hopes soon to be removed from blacklists of countries deemed to have unsafe aviation, paving the way for its flag carrier to add US flights and return to Europe, a regulator said Friday.
Philippine airlines were stopped from expanding services to the United States in 2008 and banned from Europe in March this year over concerns airline safety was not being overseen according to international standards.
An International Civil Aviation Organisation (ICAO) inspection team will visit Manila next month and be told the government has complied substantially with 87 of 89 listed deficiencies, chief industry regulator Alfonso Cusi said.
The United States' Federal Aviation Authority and the European Union both take guidance from the ICAO.
"It's a matter of time before we are out of the blacklist," Cusi told reporters, adding that the government had addressed the most critical issues raised in the ICAO's last safety audit.
These included problems with the Philippines' aviation regulatory framework and the quality of staff.
Lax surveillance of schools that train pilots, some of them foreigners from the Middle East, India, Afghanistan and Sudan, was another problem.
The two outstanding items are completion of the training of the new civil aviation authority's inspectors, and computerisation of the agency, which has been held up as contracts are still under review.
Cusi did not say when the final two problems would be rectified.
But the next audit of the US agency, the FAA, will be in the first three months of 2011, and the Philippines is hoping it will be lifted from the US blacklist after that, according to Cusi.
After the US FAA downgraded the Philippines to "Category 2" from "Category 1", parliament passed a law creating the Civil Aviation Authority of the Philippines to regulate the industry.
Cusi, the new body's first director-general, said the ICAO, the FAA and the European Union air safety committee had acknowledged the progress made over the past two years.
He said removal from US and EU blacklists would allow Philippine Airlines to resume flights to Europe for the first time since the Asian financial crisis in the late 1990s.
Cusi said PAL also wanted to add to its US service, now limited to the US west coast and Hawaii.

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Flight warning as residents flee Philippine volcano

MANILA — Scores of people fled their homes near a restive Philippine volcano Wednesday, while authorities advised pilots to avoid flying near clouds of fine ash shooting out from its crater.
Around 170 people fled several villages at the base of the 1,565-metre (5,135-foot) Mount Bulusan volcano, the National Disaster Risk Reduction and Management Council said in Manila.
They are being temporarily housed and fed at the mayor's office in Irosin town and at a school in nearby Casiguran, it added.
Soldiers and police will also be posted to enforce a six kilometre (3.7 miles) exclusion zone around the crater and trucks are on standby to take evacuees to government-run shelters, the local Philippine Army command said.
Bulusan showered nearby communities with ash on Tuesday following explosions and loud booms, the Philippine Institute of Volcanology and Seismology said in an advisory, adding that it expects more activity to come.
"Civic aviation authorities must advise pilots to avoid flying close to the volcano's summit as ejected ash and volcanic fragments from sudden explosions may pose hazard to aircraft," it said.
Bulusan, 250 kilometres (160 miles) southeast of the capital Manila on the main island of Luzon, is one of the country's 23 active volcanoes.
People living near streams and valleys in the area were warned that mudflows of volcanic ash could be triggered by heavy rainfall.
The local government said a quarter million people live in six towns around the volcano, and many of them could be at risk if the mild eruption increases in intensity.
Bulusan has erupted 16 times in recorded history, the last time in 2006. It began emitting ash again from November 6.
The Philippines is part of the Pacific Ring of Fire where frequent volcanic eruptions and earthquakes take place.

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Gokongwei group eyes right to operate NAIA-3

MANILA, Philippines – The Gokongwei-led JG Summit Holdings Inc. is interested in expanding into airport infrastructure projects, specifically the NAIA Terminal 3 airport facility, the base of its airline unit Cebu Pacific's Manila operations.

“JG Summit Holdings Inc. would be interested in infrastructure business like airport operations,” Lance Gokongwei, a director of JG Summit, wrote in a reply to abs-cbnnews.com’s questions.

Gokongwei is also the CEO of JG Summit’s budget airline unit Cebu Pacific Air, which is one of the two local airlines operating at the sprawling Terminal 3 at Ninoy Aquino International Airport (NAIA), the country's main gateway.

Cebu Pacific, which has clinched the top spot from Philippine Airlines (PAL) in the domestic airline market, consolidated its local and regional flight operations at NAIA 3 when the terminal facility partially opened in July 2008.

“NAIA Terminal 3 is the perfect home of Cebu Pacific Air in Manila. As the Philippines largest national flag carrier in terms of total passengers carried, NAIA-3 is the only airport terminal that will fit CEB’s large and rapidly expanding operations,” Gokongwei wrote.

Cebu Pacific has grown its passenger base exponentially since it transferred its Manila-based operations from two separate locations—the congested NAIA 1 and Domestic Terminal—to NAIA 3.

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Wednesday, November 10, 2010

Palace vows to deal with PAL labor woes; airline needs P2.5B

PHILIPPINES AVIATION NEWS

MALACAÑANG IS looking for short- and long-term solutions on Philippine Airlines’ (PAL) string of labor woes, a Palace official said, with President Benigno S. C. Aquino III reviewing the Labor department’s recent affirmation of the carrier’s plan to outsource three units which would result in the layoff of some 2,600 workers.

Ricky A. Carandang, Presidential Communications Development and Strategic Planning secretary, said in an interview the Palace has a keen interest on PAL’s labor issues as these would have an impact on the public.

“This could lead to some kind of policy with regard to liberalization,” Mr. Carandang said.

Economic managers last month submitted to the President a memorandum recommending the full implementation of the civil aviation liberalization policy which could ease up the process for qualified foreign airlines wanting to expand operations in the Philippines.

“Therefore we’re not keeping our hands off. We’re reviewing the case very carefully and as the President said, once the case is reviewed then he will decide what the best intervention will be,” said Mr. Carandang.

Conciliation meetings between the management and the Philippine Airlines Employees’ Association (PALEA) will start today after the union filed a notice of strike with the National Conciliation and Mediation Board (NCMB) under the Labor department last Friday.

In a statement on Saturday, PALEA said it filed the notice of strike due to the “widespread and persistent attempts by management to convince union members, which by law is individual bargaining and constitute interference in the right to self-organization.”

“We cited unfair labor practice as ground. The specifics of the unfair labor practice are individual bargaining with union members which is tantamount to interference with, restraint, and coercion of employees in the exercise of their right to self-organization, and mass termination of union officers amounting to union busting,” PALEA President Gerardo F. Rivera said.

After filing the notice of strike, the next step in the process is for PALEA to conduct a strike vote among its members.

PAL management said on Saturday the filing of notice of strike was “just a union strategy to delay implementation of PAL’s spin-off program.”

“There is no reason for our passengers to be alarmed. A strike is not likely to happen anytime soon as the DoLE (Department of Labor and Employment) views PAL’s continued operations as imbued with national interest,” PAL spokeswoman Cielo C. Villaluna said.

“We categorically deny ‘directly negotiating’ with union members, as claimed by PALEA, inasmuch as management regularly conducts consultative talks only with PALEA officials and not with the members,” she added.

PAL, meanwhile, will borrow an additional P2.5 billion to fund working capital next year, on top of the P2.5 billion needed to compensate workers to be affected by layoffs.

Jose Gabriel D. Olives, PAL chief financial officer, told reporters the airline was in talks with government-run Land Bank of the Philippines and Development Bank of the Philippines and some foreign creditors to borrow the said amount. “We will have a combination of restructuring and cutting down of fuel expenses for next year,” he added.

Mr. Olives said potential investors have asked the airline to resolve labor issues before discussions about infusing fresh funds into the airline resume. -- Ana Mae G. Roa and Aura Marie P. Dagcutan

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Birds disable CebuPac plane, delay flights

MANILA, Philippines—Budget carrier Cebu Pacific Air Sunday announced delays in its trips on Sunday and their corresponding return flights after birds caused mechanical failure in one of its aircraft.

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Philippine Air Says Profit Hinges on ‘Survival Plan,’ Job Cuts

Philippine Airlines Inc. said attempts to make a first profit in three years hinge on a “survival plan” including 2,600 job cuts that have drawn opposition from unions.

“We will have a small profit this year only if we can outsource our ground-handling, catering and call-center services, and get rid of 2,600 employees,” President Jaime Bautista said in a phone interview late yesterday. “I am hopeful that I may be able to do this before the end of December.”

Bautista needs to overcome protests from ground-handling workers to complete outsourcing plans, while also tackling a separate labor row with cabin crew. The carrier, Asia’s oldest, has posted losses of $312 million over the past two fiscal years because of wrong-way bets on fuel prices, the global recession and rising competition from Cebu Air Inc.

Bautista declined to say how much savings the survival plan will generate. The carrier’s net losses shrank to $14.3 million in the year ended March, from $297.8 million a year earlier. Bautista said in August that the carrier may miss its profit target this year after 25 pilots quit for jobs elsewhere.

Philippine Air’s ground-crew union said this week it will appeal a decision by the labor department allowing the carrier to terminate employees and outsource their jobs to service providers that would hire them. The government has intervened in the cabin-crew dispute, which centers on pay and benefits, to prevent a strike.

Air Philippines

Operations at Philippine Air’s low-fare affiliate, Air Philippines, are “starting to gain ground,” with around 80 percent of total available seats filled, Bautista said. The budget carrier, which operates four Airbus SAS A320s, will take delivery of two more by year-end. Next year, six more planes will join the fleet followed by another six in 2012, he said.

Philippine Air’s parent PAL Holdings Inc. gained 1 percent to 4.95 pesos at 10:23 a.m. in Manila trading. The company has jumped 75 percent this year.

Philippine Air’s long-haul plans have been disrupted by U.S. Federal Aviation Administration restrictions that prevented it from adding flights and a European Union blacklisting of all Philippine carriers. The government has said it will take steps to improve standards.

The airline has postponed delivery of four twin-aisle Boeing Co. 777-300ERs to 2012 and 2013 because it would “lose money” operating those planes on regional routes, Bautista said. The carrier has a fleet of 39 planes currently, he said.

Philippine Air, along with its discount unit, controls about 47 percent of the domestic market, Bautista said. Cebu Air, which has a fleet of 29 jets, has said its share of the domestic market is almost 50 percent.

The EU this year banned all airlines based in the Philippines from flying in the bloc, citing “serious safety deficiencies” in the regulation of carriers. The U.S. Federal Aviation Administration in 2008 lowered the Southeast Asian nation’s aviation safety rating to Category 2 from Category 1 “due to serious concerns” about local regulation of airlines.

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Civil aviation shakeup may endanger PH safety upgrade

The Department of Transportation and Communication (DoTC) bypassed approved civil service procedures and appointed seven people to career positions at the Civil Aviation Authority of the Philippines (Caap), it was learned Tuesday.

According to the minutes of the November 2 board meeting, a copy of which was obtained by INQUIRER.net, DoTC appointed Ramon S. Gutierrez as Deputy Director General for Administration, Napoleon L. Garcia as Deputy Director General for Operations, Wilfredo S. Borja as Assistant Director General II (Air Traffic Services),

Andrew B. Basallote as Assistant Director General II (Air Navigation Service), Edgardo L. Costes as Assistant Director General II (Aerodrome Development and Management Service), Wilson V. Mirabona as Assistant Director General I (Aerodrome Development and Management Service), and Andres B. Laurilla as Assistant Director General I (Civil Aviation Training Center).

The Caap Charter, or Republic Act 9497, requires appointees to regular “career positions” to undergo the selection process board, the appointment by the Caap director general and the final approval/confirmation of the board.

In the same board meeting, Caap Director General Alfonso Cusi, who is the appointing authority according to the law, objected to the appointment of the seven officials.

The appointments, according to INQUIRER.net sources, may jeopardize the ongoing review of the Philippine aviation system which has been classified as unsafe by international bodies such as the United States Federal Aviation Authority and the European Union, which banned Philippine carriers from operating in the bloc due to “serious safety deficiencies” in their regulation.

Earlier this year, EU officials and the president of the International Civil Aviation Organization (Icao) Roberto Gonzalez personally visited the country to check on the progress that Caap has made to address “significant safety concerns.”

EU officials and Gonzalez stressed that Caap must be professionalized, and headed and staffed by technical professionals and not political appointees. The two organizations highlighted the need for a consistent application of laws and the strengthening of the Caap’s legal framework.

FAA’s upgrade of Philippine aviation system from category 2 to category 1 is anchored on the ongoing safety audits by EU and Icao.

Posted by Captain Sushil Kumar

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