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Old August 22nd, 2010, 10:22 AM   #701
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What was really won in global Naia 3 suit
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Government clarifies press reports on scope and significance of ICC award on Piatco controversy

On July 22, 2010, an international arbitral tribunal under the auspices of the International Chamber of Commerce (ICC) issued an award dismissing all claims in the long-running arbitration that Philippine International Air Terminals Co. Inc. (Piatco) had brought against the government. The award is not, at this time, public and must be maintained as confidential.

Since the Republic reported on its success in this arbitration, some press reports and editorials have inaccurately characterized this award on the basis of the release of selective and grossly incomplete portions of the decision, in violation of the confidentiality of the award and in an apparent attempt to mislead. The selective release and press reports reveal an incomplete understanding of the facts and context of this arbitral proceeding. While the government may not, at this time, disclose the contents of this confidential award, certain corrections of those erroneous reports must be made to clarify the scope and significance of this decision.

Contrary to certain press articles, the ICC award did not make, and could not have made, any rulings regarding the government’s decision in December 2004 to exercise its right of eminent domain over Naia Terminal 3. The ICC Tribunal repeatedly emphasized that it had no jurisdiction to consider any legal issues arising from the government’s expropriation of the terminal. The legal ramifications of a sovereign decision by the government to take over a public utility in the Philippines for the public interest are instead being resolved by Philippine courts.

In this regard, while the government’s expropriation of the terminal was legal under Philippine law, the Supreme Court previously stated in the Piatco v. Agan and Republic v. Gingoyon cases that the government nonetheless must pay just compensation for the terminal. By order of the Regional Trial Court of Pasay City, the government provided Piatco with a proffered value payment of P3 billion, and has manifested in written and oral submissions that it intends to pay just compensation under Philippine law following the conclusion of the valuation being conducted by Court-appointed commissioners. To aid this process, the government has retained internationally recognized firms Ove Arup, Gleeds, and the well-qualified Philippine firm TCGI (which helped document construction/safety issues for remediation) to provide an independent review and valuation of the terminal. The results of this review are expected to be reported to the commissioners in November 2010 as the basis for payment.

Any suggestion that the ICC award has adversely affected the government’s rights regarding its expropriation of Naia Terminal 3 is incorrect. In accordance with the Supreme Court’s decisions, as well as Philippine law and procedure, the government has already committed in a public manifestation before the Regional Trial Court in Pasay City to paying just compensation for Terminal 3. The ICC award did not, and was not expected to, make any rulings with respect to the government’s obligation to comply with any Philippine court judgments regarding the expropriation and the government’s rights to set off.

The ICC Tribunal also made clear in its award that it did not have jurisdiction to render any decisions on the government’s counterclaims regarding the construction of the terminal. Unlike in the case of Piatco’s claims, the tribunal—whose power is limited by the scope of the parties’ consent—did not hold and could not have held, that these counterclaims had no merit but simply said that it could not pass upon those counterclaims. The merits of the government’s counterclaims concerning the deficiencies of the terminal (including, e.g., a decision on whether Piatco is a “builder in bad faith”) either will be addressed in arbitral proceedings in the Philippines, should the government choose to commence arbitration proceedings, or will be taken into account by the Philippine court when assessing the value of the terminal in the expropriation proceedings.

The government’s legal victories in dismissing Piatco’s claims for $565 million (roughly P19,125,000,000) in the ICC arbitration, Fraport’s claims for $425 million (roughly P25,425,000,000) in the ICSID arbitration, and the additional alleged damages like lost profits demanded by both claimants for the 25-year term of the concession—all have saved the government from enormous liability, restored the government’s reputation, ensured that it will be required to pay only a fair and just amount for Naia Terminal 3 based upon credible and comprehensive inspections, and confirmed the necessity of compliance with Philippine law, particularly with respect to concessions involving public utilities, like Naia Terminal 3. The resolution of these cases also facilitates the remediation and completion of Naia Terminal 3 to full operability so that it can better service domestic and international passengers (assuming that the terminal and the apron and taxi way are not irremediably defective).

The legal fees associated with the government’s defense reflect both the complexity of these arbitrations, which spanned approximately seven years, and also the contentiousness of the dispute, which was exacerbated and escalated by Piatco’s and Fraport’s initiation of multiple international arbitrations, national court cases, contesting every possible issue and hiding or refusal to produce critical evidence. Given the magnitude, complexity and significance of these arbitrations, and the burden of far-flung efforts to uncover and secure evidence, the Office of the Solicitor General retained White & Case LLP, a preeminent global law firm with expertise in international arbitrations before Icsid and the ICC, and also engaged retired Supreme Court Justice Florentino P. Feliciano and recently appointed Supreme Court Justice Maria Lourdes Sereno, who provided additional competence and credibility on Philippine and international law. The Office of the Solicitor General worked closely with collaborating counsel, marshalling the voluminous documentary evidence required in the arbitration cases and coordinating with witnesses, among several other tasks. Engagement of collaborating counsel has proven to be justified and well-founded, particularly given the results achieved so far. The government has requested reimbursement of certain legal fees and costs in both the ICC and Icsid proceedings, and rulings on these requests are pending.
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Old August 22nd, 2010, 01:27 PM   #702
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Domestic air passengers rise 10.5% in first half; Cebu Pacific is top carrier
By Mary Ann Ll. Reyes (The Philippine Star) Updated August 22, 2010

MANILA, Philippines - The number of domestic air passengers has increased 10.5 percent to 8.4 million during the first half of 2010 from 7.6 million in the same period last year, according to data from the Civil Aeronautics Board (CAB).

Cebu Pacific accounted for 48.7 percent of the traffic, carrying 4.09 million passengers during the period, followed by Philippine Airlines (PAL) with 2.88 million or 34 percent, Air Philippines with 667,686, Zest Air with 616,058 and Seair with 132,416.

In terms of domestic cargo, volume transported also increased to 83.6 million kilograms during January to June 2010 from 60.9 million in the first half of last year, or a 37-percent improvement.

Again, Cebu Pacific accounted for the largest share with 42.3 million kgs, followed by PAL with 33.9 million, Zest Air with 5.49 million, Airphil 1.48 million, PEAC with 594,979, and Seair with 150,442.

Cebu Pacific expects to fly a total of 10 million domestic and international passengers this year, compared to last year’s 8.8 million, or a 31 percent year-on-year growth. By 2013, it expects to carry a total of 15 million passengers, exceeding the capacity of the NAIA Terminal 3, its home base.

“We expect to grow even more in the coming years as we take delivery of more brand-new planes which we will use to expand our capacity, increase frequencies, and fly to more local and foreign destinations,” Cebu Pacific vice president for marketing and distribution Candice Iyog earlier said.

The Gokongwei-owned airline is buying 22 more 180-seat Airbus A320 aircraft for delivery starting in October this year till 2014, which by then would make the airline’s Airbus fleet the largest in the country as well.

The airline currently operates the youngest aircraft fleet in the country, composed of 21 Airbus and eight ATR 72-500 aircraft.

Cebu Pacific is investing at least $1.4 billion over a five- year period including this year for the acquisition of 22 new aircraft, in anticipation of a 50 percent growth in the number of its passengers by 2013.

The 22 brand-new Airbus 320 aircraft will be delivered from 2010 until 2014. On top of an existing order of 15 A320s, CEB president Lance Gokongwei said they have an additional firm order of seven A320s.

The new aircraft will be financed from internally generated funds, loans, and export credit agencies.

But aside from the seven additional firm orders for A320s, he disclosed that they have received seven more options for additional aircraft.

From an expected 10 million total passengers flown this year, CEB expects to fly 13 million passengers by 2012, growing further to 15.1 million by 2013. “We are expecting 28 percent more passengers for us in 2010 compared with 2009 in an industry that is growing at a rate of 15 to 20 percent,” he said.

The first of the 180-seat aircraft will be arriving in October and will be used to add routes and frequencies on CEB’s network of 33 domestic and 14 international destinations.

“This will enable us to have the largest fleet of Airbus 320 family in the Philippines, and the second largest in Southeast Asia, allowing us to offer our trademark low fares to even more Filipinos,” Gokongwei emphasized.

He added that by 2014, CEB will more than double its seat capacity in the next five years. From a fleet size of 29 today (10 A319, 11 A320s and eight ATRs), this is expected to grow to 51 by end of 2014. The 51 will include the 22 new A320s that will be acquired from 2010 to 2014.

If CEB decides to avail of the option for seven more aircraft, this will bring the company’s total fleet size by 2015 to 58.

From the last quarter of 2010 onwards, CEB expects to strengthen its network of 33 domestic and 15 international destinations with more routes and increased frequencies.
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Old August 22nd, 2010, 01:28 PM   #703
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Foreign airlines hard put to take up slack for PAL
By Paolo Montecillo
Philippine Daily Inquirer
First Posted 23:21:00 08/21/2010

THE GOVERNMENT may have a hard time finding foreign airlines to fly routes that may be left vacant in the event that Philippine Airlines (PAL) is paralyzed by a labor strike, an official of the Civil Aeronautics Board (CAB) said.

“We’ve been talking to other carriers about the possibility of a strike at PAL, and if they can pick up the slack,” CAB Deputy Executive Director Porvenir Porciuncula said in a recent interview.


He said the government was ready to grant special permits to Middle Eastern, North American and Asian carriers that serve routes similar to many of PAL’s international flights.

“Some airlines say they can take up part of PAL’s operations, but most say their resources are already overstretched just servicing their own routes,” he said.

Foreign carriers, in particular, also do not relish the fact that their services will be tapped on such short notice in case PAL’s workers go on strike.

“What we’re asking from them is very temporary but a lot of them are not so willing to commit,” Porciuncula said.

European airlines and airports had been hit by a wave of strikes earlier this year. Various American airlines are also currently involved in contentious contract negotiations with their pilots and flight attendants.

Porciuncula said it might be easier to get local airlines to take PAL’s place. “Most of PAL’s domestic routes are also being served by other (domestic) airlines,” he said. However, the adjustments that would be needed in their flight plans to take in the sudden surge of volume may take some time, he added.

“If the strike happens soon, local carriers won’t be able to handle it,” he said, stressing the need for PAL management and the company’s workers to resolve their issues to avoid the inconvenience to the riding public.

He said many airlines said they are still contacting their head offices regarding the government’s proposal.

Reallocating PAL flights and the adoption of an “open skies” or liberalized air rights regime are among the options the government is looking at in the event that discussions between PAL and its workers fail.

PAL president Jaime Bautista said he welcomed government moves toward the liberalization of the country’s air industry “to secondary points” like Clark, Cebu and Davao, easing the congestion at Manila’s airports.

“PAL is not against open skies,” Bautista said, but he still argued that whatever air rights the Philippines gives to foreign carriers should be reciprocated by other countries.

Philippine flag carriers have also been blacklisted in some airports due to the country’s failure to upgrade safety standards.
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Old August 25th, 2010, 03:48 PM   #704
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PAL reports profitability
But Earnings alarming
August 21, 2010


Plagued by labor disputes, and threats of imminent strike from its flight and ground crews, Philippine Airlines is reporting a $31.6 million profit in the April-June period, down from $35.5 million in the same period last year.

The figure was down by $3.9 million or 11% from the same period last year.

"PAL must swallow bitter pills and handle its labor issues with utmost care to survive amidst the difficult and cut-throat operating environment," an airline statement quoted its president Jaime Bautista as saying.

The carrier said in a disclosure to the Philippine Stock Exchange (PSE) that it posted revenues of $426.7 million for the first quarter of its fiscal year 2010-2011, up by 30% over last year’s $ 327.7 million.

However, expenses surged 37% to $391.6 million. The company reported total expenses of $391.6 million, up by $106.1 million from $ 285.5 million last year.

Jet fuel expense rose by $55 million during the first quarter with fuel prices at an average of $100.47 per barrel from $70.28 per barrel in 2009, which continues to be the airline’s biggest operating expense.

The airline also reported a decrease in other income, by $47.5 million to $15.4 million as compared to $62.9 million registered last year.

"Despite encouraging numbers on account of the peak travel season, PAL is bracing for lower passenger volumes during the airline’s ’lean season’ usually between August to November," said PAL President Jaime J. Bautista.

Despite the current problems the airline is in, PAL remains focused on continuing efforts to generate more revenues particularly on its international network and control costs.
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Old August 25th, 2010, 03:50 PM   #705
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PAL Strike Imminent
Foreign airlines not interested to fill the slack

August 24, 2010

The Department of Transportation and Communications (DOTC) is having a hard time finding foreign airlines to fly international routes that are likely to be affected by the imminent strike at Philippine Airlines (PAL) as it prepares contingency plans for a possible disruption of air travel services in the coming months particularly to the United States.

DOTC Secretary Jose de Jesus admitted there will be a “real serious temporary disruption" because the other airlines that will be tapped to replace the routes that could be affected by a PAL strike could not change their schedules overnight.

Cathay Pacific Flights?

CAB Deputy Executive Director Porvenir Porciuncula said they have been talking to other carriers, particularly Cathay Pacific which served domestic destinations for PAL and if they can pick up the slack for PAL's domestic and international points.

“Some airlines say they can take up part of PAL’s operations, but most say their resources are already overstretched just servicing their own routes,” Porciuncula said.

“What we’re asking from them is very temporary but a lot of them are not so willing to commit,” Porciuncula said.

Secretary De Jesus confirmed that the government was ready to grant special permits not just to Cathay Pacific but to Middle Eastern, North American and Asian carriers that serve routes similar to many of PAL’s international flights.

Domestic Interest

Meanwhile, two small airlines are willing to stand in for PAL should a labor strike prevents it from serving some of its routes Porciuncula adds. Spirit of Manila Airlines and Southeast Asian Airlines (SEAIR) had informed the Civil Aviation Authority that they were interested in taking over some of PAL’s domestic routes in case of a disruption in flight services.

The government had already identified Philippine Airlines’ domestic and international routes that were also being served by small local airlines, or where they had rights to operate. Spirit of Manila Airlines has signified its willingness and capability to immediately expand its operations, while SEAir is willing to provide service from October.

Spirit of Manila operates chartered services between Clark and Taiwan using two MD83 aircraft with a seating capacity of 156, while Seair is awaiting delivery of two Airbus 320 with 180 seats from Tiger Airways for major domestic operations.

PAL earlier said last week that it was ready to deploy administrative and other staff to stand in for any striking cabin crew. Its passengers may also be transferred to the carrier’s 134 partner airlines across its network.
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Old August 25th, 2010, 03:52 PM   #706
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Seair to launch A320 Service
By Lenie Lectura

August 23, 2010

Southeast Asian Airlines (Seair) has informed the Civil Aeronautics Board (CAB) that it will revive a plan to lease Airbus aircraft from Singapore-based Tiger Airways to expand its fleet.

Seair has filed an application with the CAB in 2008 to lease two Airbus A320s from Tiger Airways.


“We already approved the lease of two Airbus [planes] way back in 2008 but because of the global slump, Seair’s expansion plan was shelved. Now, it is reviving the plan because the market is growing and many of [the country’s] airlines are looking at expanding,” said Carmelo Arcilla, CAB executive director, yesterday.

Last July, the airline purchased three Dornier 328 turbo-prop aircraft to be used to boost its operations in the growing markets of Batanes, Boracay and Romblon.

Seair president Avelino Zapanta earlier said the airline recorded a net loss for 2009 but vowed to do better this year.

“Although we have an operating income in 2009, we are still down in terms of bottom line last year. Everybody lost money, net income wise. In 2008, we faced fuel crisis which have impacted our profitability. In terms of operating income, we were able to do positively unlike in 2008 we were not even able to do a positive operating income,” said Zapanta.

This year, Seair is looking at improving [its performance], said Zapanta. “In terms of profitability, we will try to break even this year,” he said.

Seair transported 132,416 passengers as of end-June this year. Its load factor in the first six months of the year reached 79 percent.

Earlier, Tiger partnered with TripleStar Travel and Tours to be its general sales agent in the Philippines in a bid to entice more travelers to take the budget airline.

TripleStar was created and spun off two years ago out of Seair tour desk services. It introduced the popular Leisure Escape Packages of the airliner.

As Tiger Airways’ agent, TripleStar will market seats to Filipino travelers and businesses.
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Old August 25th, 2010, 03:54 PM   #707
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Orbis brings sight to Manila
August 25, 2010


New York - The world's only eye surgical and training hospital with wings will touch down in Manila to deliver sight-saving surgeries to those suffering with blindness and visual impairments, and to conduct skills exchange programs with the local ophthalmic community.

ORBIS International is an international non-profit non-governmental organization (NGO) focusing on prevention of blindness and the treatment of eye diseases in developing countries. It is best known for its "flying eye hospital", presently a McDonnell Douglas DC-10.

The Flying Eye Hospital is scheduled to arrive on August 27, 2010 at Ninoy Aquino International Airport for a two week Ophthalmic Skills Exchange Programs sponsored by Federal Express.

"The support we receive from FedEx enables the delivery of improved eye care services to numerous people, while bringing awareness of avoidable blindness to many more," said Dr. Hunter Cherwek, medical director of ORBIS International.

The event will run from August 30 until September 10th where advanced training will be offered in ophthalmic care, focusing on pediatric eye diseases, cataract, oculoplastics and medical retina. Surgeries to treat and prevent blindness will be provided free of charge onboard the DC-10 flying hospital.

The Flying Eye Hospital Program will also increase the clinical and surgical abilities of local eye care providers.

Studies show that around 100 children in the Philippines lose their sight every week, making about 680,000 blind Filipinos.

According to the World Health Organization, one-third of the world's 45 million blind and half of the world's 1.5 million blind children live in Southeast Asia. Of the 12 people who become blind every minute in the world, 4 are from Southeast Asia. With one quarter of the global population and one-third of the world's blind, Southeast Asia has a disproportionate burden of blindness. The blind persons in this region are among the poorest in the world and the most marginalized in society.

Since its first flight in 1982, Orbis has trained more than 234,000 ophthalmologists, nurses, biomedical engineers and other health care workers , who in turn have treated an estimated 17.5 million people worldwide. It has conducted 550 programs in 82 countries.

The Orbis mission first landed in the Philippines in 1982, and has been back eight times since then, the last time being in 2003, performing around 200 operations and screening some 300 Filipinos.

FedEx has been a sponsor of ORBIS for more than 20 years delivering the gift of sight to countless individuals throughout the developing world. In 2006, FedEx renewed its global sponsorship with a US $5.5 million commitment, which includes financial, logistical and operational support for ORBIS and its Flying Eye Hospital through 2011.
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Old August 27th, 2010, 07:49 AM   #708
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Logistics firm owner joins PAL board
08/26/2010 | 03:40 PM

Alberto Lina, who owns a private logistics company that has its own professional basketball team, has joined the 15-member Philippine Airlines (PAL) board as its independent director.

The Philippine flag carrier announced this during its board’s organizational meeting that followed its shareholders’ meeting.


"Bert Lina's experience in air travel and logistics solutions will hopefully provide a fresh perspective at how we can address current challenges," said PAL President Jaime Bautista, in a statement issued Thursday.

The 62-year-old Lina, a graduate of the Philippine School of Business Administration, currently heads his own conglomerate.

Firms under the Lina Group of Companies include among others Airfreight 2100 Inc., U-Freight, Cargohaus, LGC Logistics, Mail & More, etc.

The Lina Group also owns the Air 21 Express basketball team in the Philippine Basketball Association (PBA).

During the board meeting at the Century Park Hotel, Dr. Lucio Tan was reelected chairman and chief executive officer while Harry Tan remained vice-chairman and treasurer.

Jaime J. Bautista was also reappointed PAL president and chief operating officer.

The other board members are Harry Tan, Antonio Alindogan, Jr., Charles Chante, Enrique Cheng, Joseph Chua, Gloria Tan-Climaco, Estelito Mendoza, Cesar Santos, Henry So Uy, Washington SyCip, Lucio Tan, Jr. and Michael Tan.
–Robert JA Basilio/ VVP, GMANews.TV
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Old August 27th, 2010, 07:51 AM   #709
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PAL labor issues scaring investors away — official
08/26/2010 | 04:03 PM

The numerous labor issues hounding the Lucio Tan-led Philippine Airlines (PAL) have scared away potential investors from bailing out the cash-strapped flag carrier.

According to Jaime J. Bautista, PAL president and chief operating officer, potential investors have asked the airline to resolve its several labor issues before discussions about infusing fresh funds into the airline can resume.

“Investors’ appetite has decreased due to the company’s labor problems," Bautista told reporters at the sidelines of the company’s stockholders’ meeting on Thursday.

He said the company has not been in contact with its potential investors for the past few months.

PAL on Thursday approved the restructuring of its equity by reducing the par value of its shares to 20 centavos from 80 centavos, which will make it easier for outside investors to get a bigger voting block in PAL.

Potential investors in PAL were reported to be Middle Eastern groups and companies in the Asia Pacific region that are also involved in airline operations.

“We want new money to come in because if [PAL chairman Lucio Tan] simply sells his shares, then the money will go to him and not to the company," Bautista said.

PAL has been in search of investors since last year, after suffering over $300 million in losses due to high oil prices and low demand.

“There are investors that want to be passive but we are also willing to get investors that wish to have a more active role," Bautista said.

Among PAL’s many labor issues is the opposition to the company’s plans to outsource non-core services like in-flight catering, airport services and call centers, retrenching over 2,600 workers in the process.

PAL’s flight attendants are also protesting a policy that requires them to retire at the age of 40. All other PAL employees are allowed to work until they are 65.

Bautista said these labor issues have also affected bookings, with many passengers growing weary of a potential labor strike.

Bautista denied that the company approached the groups of San Miguel Corp. president Ramon S. Ang and Philippine Long Distance Telephone Co. chairman Manuel V. Pangilinan, inviting them to invest in PAL.

Flights to India

PAL is increasing its flights to India by the first quarter of next year, as it confronts challenges from is labor force and the country's tourism sector.

By March of next year, the airline will mount three direct flights a week to India's main airport in New Delhi, said PAL president Jaime Bautista on Thursday.

"There are a lot of Indian nationals here in the Philippines," he told reporters.


Bautista said PAL will use its wide-body Airbus A330 aircraft for its flight to India, making PAL the only local carrier that serves routes to the sub-continent.

He said international carriers once found it hard to compete against Middle Eastern airlines, which get their fuel at a discount, allowing them to offer cheaper fare rates.

PAL introduced new flights to Brisbane, Australia earlier this year. It already flies to Sydney and Melbourne.

Also, the airline has introduced new flights to Riyadh, Saudi Arabia, making PAL the only local company that serves Middle Eastern routes.

"Another opportunity for us is to get the market of Indian nationals that want to go the North America," Bautista said, adding that it may opt to increase its flights to seven days a week if the demand is enough.

PAL earlier wanted to expand its flights to the US. But because of the country's poor regulatory environment, the Federal Aviation Administration has banned Philippine carriers from expanding there.

Passengers, said Bautista, can stopover in the Philippines and take connecting flights to Los Angeles, San Francisco and Las Vegas in the US or to Vancouver in Canada. —With Paul de Leon/JE/KBK/VS, GMANews.TV
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Old August 27th, 2010, 06:37 PM   #710
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Hongkong Express cancels Laoag flights
August 27, 2010

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Laoag - Hongkong Express, an airline based in Hong Kong has announced indefinite suspension of twice weekly flights between Hongkong and Laoag after the Hong Kong government issued a travel ban to the country Tuesday as a direct consequence of hostage killings in Manila.

Ronal Estabillo, manager of the Laoag International Airport, said they were notified of the flight suspension Thursday. Its last flight carried Hong Kong nationals out of the country.

There was no mention of the reason behind the suspension but Estabillo was aware of a travel ban imposed by Chinese authorities on Tuesday in the aftermath of the bungled rescue attempt of the Chinese hostages and the consequent flight cancellations by its passengers.

Meanwhile, Milagros Gonzales, Ilocos Norte provincial tourism officer, said that all bookings in two major hotels in Laoag have been cancelled since Tuesday.

She said Hongkong tourists have been steadily coming to Laoag before the Manila bloodbath. At least 1,200 Hongkong nationals visit the city monthly for rest and recreation purposes. Most of the tourists visit Fort Ilocandia to play in the casino.

Gonzales adds the only other international flight from Kaoshiung, Taiwan to Laoag is expected to be cancelled as well in response to the travel ban imposed by Chinese authorities to the Philippines. Around 200 Taiwanese nationals visit the city on a monthly basis.
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Old August 27th, 2010, 06:39 PM   #711
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PAL Holds High Hope to its Low Cost Subsidiary
August 27, 2010


Low cost subsidiary Airphil Express is the answer of Philippine Airlines to Cebu Pacific's dominance in the country and for PAL Holdings to remain competitive in the domestic air travel market says its Executive Officer.

According to PAL President Jaime J. Bautista, the airline had no plans to cater to the low-cost market. Instead, its sister firm Air Philippines, is being groomed to compete in the low-cost scene.

Bautista said the company’s Legacy carrier business model no longer works well in attracting customers for the domestic market, unlike budget carriers whose mode of operations are based on low cost carriers patterned after Southwest of the US or Easyjet or Ryanair of Europe.

“Growth is in the low-cost model,” Bautista said in a recent interview. “That’s why our rival Cebu Pacific is growing very fast.”

As part of its plans to beef up Air Philippines’ operations, Bautista said majority of its narrow-bodied fleet will be transferred to its LCC subsidiary. PAL recently transferred three of its 150-seater Airbus A320 aircraft to Airphil Express with three more expected in October and November.

A total of six A320s will join the AirPhil Express fleet this year. The first two are being operated by the airline on lease from Philippine Airlines, while the other four will be new aircraft delivered from Airbus during the second half of the year, which is part of the original PAL 320 orders.

"We want to position AirPhil Express as a low-cost carrier offering quality service," said David Lim, President of the airline. "The modernization of our fleet will enable us to increase market share while the industry braces for the eventual rebound."

PAL will be left with 9 Airbus 320 planes, which makes up bulk of its narrow body fleet of 18 jets. Over the next three years, Air Philippines would eventually operate all of PAL's 18 Airbus 320 aircraft to bolster its domestic and international operations.

However, Bautista assured that PAL’s operations would not be cannibalized as they will be retaining the wide bodied aircraft for its domestic and international operations, saying further that there would always be a market for passengers that want more luxury when they fly than what is offered by budget airlines.

Bautista also said they will have four more brand-new Boeing 777-300ER aircraft delivered starting in 2012 to cover more points across Asia Pacific and Australia, the Middle East and North America. PAL expects to fly to India within next year for a thrice a week service using Airbus 330. According to him, the airline will mount three direct flights a week to New Delhi.

The new 777 planes is expected to replace the airlines ageing Boeing 747-400 jets as the airline’s flagship aircraft which are due for retirement in 2016.
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Old September 1st, 2010, 08:23 AM   #712
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PAL readies India flights

PAL readies India flights
by Jeremiah F. de Guzman

Philippine Airlines is all set to mount direct flights to India in the first quarter next year in a bid to develop a new tourist market.

PAL president and chief operating officer Jaime Bautista told reporters last week the carrier would launch thrice-weekly flights to New Delhi in March of 2011 using Airbus 330.

“The market for this route is around 50,000 passengers every year,” Bautista said, adding that PAL would skip a stopover in Bangkok as originally planned.

The carrier stopped flying to India in the 1950s but now sees good prospects to bring back the service due to the influx of Indian tourists to Manila and Cebu.

Tourism Secretary Alberto Lim said in a recent interview that the government was tapping the Indian market to add to the growing tourist volume in the Philippines.

He said India, along with Russia, is a potential rich market.

“There is still no significant volume coming from India because there are no direct flights,” Lim said.

Tourist volume from India in the first five months of the year reached 9,911, up 35 percent from 7,339 in the same period last year. The Indian tourists comprise just 0.83 percent of total inbound tourists during the period.

The selection of India as the next potential tourism market comes at the heels of a weak Chinese market following the recent hostage-taking incident in Manila that led to the death of eight Hong Kong nationals.

Hong Kong immediately issued a travel advisory to its residents after the incident.

Meanwhile, budget carrier Cebu Pacific Air is set to launch its maiden Manila-Beijing-Manila flights on Sept. 5.

The carrier’s Beijing flight departs Manila at 7:35 p.m. and arrives in Beijing at 12:05 a.m. The return flight will leave Beijing at 1:00 a.m. and arrive in Manila at 5:30 a.m.

“We are excited to begin our Beijing operations, as it will signify better connectivity for our passengers to the Philippines and the Asia-Pacific region. This seat sale is part of our commitment to offer the lowest possible fares, and more opportunities for convenient connecting flights to the region’s tourist destinations,” said Cebu Pacific vice president for marketing and distribution Candice Iyog.
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Old September 1st, 2010, 10:37 AM   #713
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Cambodian envoy pushes for direct flights to Cebu
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CEBU CITY, Sept. 1 (PNA) –- Cambodian Ambassador to the Philippines Hos Sereythonh has said he will push for the establishment of direct flights between his country’s major cities and Cebu.

Ambassador Sereythonh said he and President Benigno Aquino III have started to tackle the proposal, which is seen to foster tourism and trade between Cambodia and the Philippines.

Sri Lanka Ambassador Nawalage Bennet Cooray said a student exchange program between his country and Mandaue City will be created to develop better ties between them.

They were among seven ambassadors who were in Cebu since Sunday to attend a business forum organized in time for the celebration of Mandaue City’s 41st Charter Day.

Mandaue Chamber of Commerce and Industries (MCCI) president Eric Mendoza said Mandaue City aims to become an “attractive global business destination.”

He said the city is among the country’s fastest growing industrial centers.

”Mandaue City is home to big conglomerates and is considered the furniture capital of the country,” he said.

Forty-percent of the country’s total furniture export is produced by the city, he said.

Pakistan ambassador Mohsin Razi urged the Mandaue business community to extend assistance to his country, which has been ravaged by what the United Nations described as the worst catastrophe of the century.

Mandaue City Administrator Briccio Boholst said the city seeks to expand partnerships with other countries.

”We are convening to define our business direction, one that will positively impact our countries,” he said.

Ambassador Kristiarto Legowa of Indonesia said promotion of trade and investments between the Philippines and Indonesia will not be difficult given the two countries’ “similar culture and values” and proximity to each other.

”It’s easy for us to build chemistry,” he said.

Venezuelan Charge d’ Affaires Manuel Perez Itubri presented his country’s discovery of the plant called Amaranthus, which he said he saw in many parts of Cebu City.

Venezuela, he said, is producing an array of products from the said plant.

Iraqi Ambassador Wadee Al-Batti praised Mandaue City for its friendly business climate, saying “what’s difficult in Manila is easy in Mandaue.”

”We are ready to make Filipinos a great player in Iraq. We’ll take this relationship to a new level,” he added.

Vietnam deputy head of mission Pham Hao invited Cebuanos to visit his country as it celebrates its national day.
http://www.pna.gov.ph/index.php?idn=&nid=2&rid=298149
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Old September 1st, 2010, 04:41 PM   #714
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If ever there will be direct flights between the Philippines and Cambodia, it might end up being from CRK first due to ASEAN open skies. Or MNL, since it is a bigger market.
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Old September 1st, 2010, 05:58 PM   #715
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Cebu Pacific opens Macau-Laoag route
September 1, 2010

The Philippines’ largest carrier Cebu Pacific (CEB) is set to launch its 17th international destination when it opens the Macau-Laoag route on September 20, 2010.

The departure time is scheduled every Monday, Wednesdays and Fridays at 9:40pm, and the arrival time is every Tuesday, Thursdays and Saturdays at 2:05am.

There are a total of 13 flights weekly to and from Macao to the Philippines from points in Manila, Clark, Tuguegarao and Laoag.

On Sept. 5, 2010, the airline will have its maiden Manila-Beijing-Manila flights.

CEB flies to 16 international destinations across the Asia-pacific region.
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Old September 1st, 2010, 05:59 PM   #716
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Cebu Air IPO to take off in October
By Zinnia B. Dela PeÑa (The Philippine Star) Updated September 1, 2010 12:00 AM

MANILA, Philippines - If everything goes as planned, Cebu Air’s long-delayed initial public offering (IPO) will likely take off in October, sources from the Securities and Exchange Commission (SEC) indicated.

The SEC insiders said the IPO has been tentatively scheduled to start on Oct. 13 and will close on the 19th while the listing has been tentatively set on Oct. 26. The IPO is being touted as the largest by a Philippine company, with proceeds expected to reach as much as P32.2 billion, topping SM Investment Corp.’s P28.75-billion maiden offering of shares in 2005.

A source, however, reiterated that these dates are not yet final and may change depending on the issuer and underwriters’ preference.

Cebu Air filed its amended registration statement with the SEC on Aug. 23, the same day a dismissed police officer took a bus-load of Hong Kong tourists hostage in the heart of Manila, leaving eight victims dead.

The bungled bus hostage crisis has resulted in cancellations of flight bookings for passengers coming from Hong Kong and other Chinese cities bound for the Philippines. Hong Kong urged its nationals to avoid the Philippines as their travel destination as the government had issued a top-level ‘black’ travel alert to the country.

The Manila-Hong Kong route is Cebu Air’s most popular international destination as the Gokongwei-owned carrier, flying under the Cebu Pacific brand, annnounced recently that it is adding one more daily flight to the former Crown Colony beginning Nov. 24, 2010 to bring its total daily flights to five.

Cebu Air flew 493,000 passengers to Hong Kong last year, outnumbering other international destinations such as Singapore, Osaka, Incheon, Kuala Lumpur, and Jakarta.

The airline faces an uphill struggle as the country shakes off its tainted image brought about by a botched hostage rescue that was broadcast live around the world.

After a two-year delay caused by the world’s worst recession in over six decades, Cebu Air has set a course for the Philippine Stock Exchange this year in an attempt to raise up to $715 million (P32.2 billion) for fleet expansion. It is selling almost 215 million new and existing shares, including an over-allotment allocation of 27.995 million shares, at a maximum price of P150 apiece.

Excluding the greenshoe option, Cebu Air will raise nearly P28 billion from the sale of 30.66 million new shares by way of a primary offer and up to 155.975 million shares to be issued by CPAir Holdings Inc. through a secondary offer.

While the number of offer shares is lower than the previous plan of 271.10 million, the maximum price has been increased from P95 each share.

Cebu Air had previously planned to raise around P25.7 billion but put it off earlier this year, citing uncertainties related to the May 2010 presidential elections.

In its revised IPO application, Cebu Air said up to 130.646 million shares or around 70 percent of the offer shares would be sold overseas, while as much as 55.991 million shares would be made available to domestic investors.

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

Cebu Pacific is spending $1.4 billion for the purchase of 22 brand-new Airbus aircraft scheduled for delivery this year until 2014. Three Airbus A320s will be delivered in the last quarter of the year; another three will be delivered starting June towards the end of the second half of 2011; four units by 2012 ; seven by 2013; and five by 2014.
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Old September 2nd, 2010, 09:49 AM   #717
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PAL loses $80M on trip cancellations after hostage crisis
By Judy Quiros
Inquirer Mindanao


DAVAO CITY – The country’s flag carrier suffered losses of $80 million following the August 23 hostage crisis that ended in the deaths of eight visiting Chinese nationals, an airline executive has said.

Speaking to reporters here, Domingo Duerme, Philippine Airlines vice president for Mindanao, said the losses came in the form of cancellations of flights for the Manila-Hong Kong route.

“About 500 passengers had canceled their bookings [following the tragedy],” he said Wednesday, citing a recent company assessment report.
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Old September 4th, 2010, 07:01 PM   #718
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DMIA is a PRIORITY
Public-Private Coalition lists P160-billion 'ready-to-go' projects
By Iris C. Gonzales (The Philippine Star) Updated August 31, 2010 12:00 AM Comments (0)


MANILA, Philippines - The Philippine Public-Private (PPP) Coalition for infrastructure projects has made a list of “ready-to-go” projects costing a total of nearly P160 billion that may be implemented by the Aquino administration immediately under its planned public and private sector partnership.

According to documents prepared by the Research, Education & Institutional, Development Foundation Inc. (REID), a member of the PPP Coalition, the government can start with four or five “ready-to-go” projects.

These include the P13.9-billion Cavite-Laguna Expressway, a second terminal of the Diosdado Macapagal International Airport (DMIA) in Clark, Pampanga amounting to P7.6 billion and a high-speed rail from DMIA to central business districts amounting to P138 billion. These projects have a combined cost of P159.5 billion.

The Coalition, composed of the Philippine Constructors Association, Bankers Association of the Philippines, Investment Houses Association of the Philippines and REID Foundation, made another list consisting “pipeline projects.”

These include various water projects such as Bulacan treated bulk water supply project amounting to P5.5 billion, the Marikina River basin sewer system, amounting to P7 billion and the San Juan River basin sewer system amount-ing to P14 billion and the Boracay water and sewerage system amounting to P1.1 billion.

The Coalition said the next step is for the government to approve the list of projects and to recommend to President Benigno Aquino III the creation of a PPP Infrastructure Council to review major policy issues and uncork interagency bottlenecks.

Finance Secretary Cesar Purisima has said the Aquino administration is considering proposals from multilateral agencies to set up an entity that would handle the planned multi-billion dollar infrastructure fund.

Purisima said the financing entity would be patterned after India’s Infrastructure Development Finance Co. Ltd. (IDFC).

IDFC, according to information posted on its website, is India’s leading integrated infrastructure finance player providing end-to-end infrastructure financing and project implementation services.

The idea is for the entity to handle funds that would be pooled from investors, fund managers, and other multilateral agencies to finance various infrastructure projects in the Philippines.

The fund would finance infrastructure projects under the proposed Private-Public Partnership announced by President Aquino during his State of the Nation Address last June.

The end-goal, he said, is to enable the government to put in place the necessary infrastructure that would make the country attractive to investors.

Faced with a budget deficit that is projected to hit P325 billion this year, the Aquino administration wants to use government funds mainly for social services and tap private sector help for needed infrastructure projects.
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Old September 4th, 2010, 07:02 PM   #719
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Metro Pacific to hire experts for airport deal
Written by Lenie Lectura / Reporter
Tuesday, 24 August 2010 14:34

METRO Pacific Investments Corp. (MPIC), which is keen on building a multibillion-peso passenger terminal at the Diosdado Macapagal International Airport (DMIA), is in talks with several advisors knowledgeable in airport engineering and design.

“The first step is identify the technical advisors. We are not familiar with the airport design and construction. So, we are talking to several but there is no position yet,” said Manuel V. Pangilinan, MPIC chairman, at an ambush interview yesterday.

Once MPIC has selected an advisor it will then wait for a complete study which would then be the basis of the company’s decision on whether to really push through or not with the airport project in Clark, Pampanga, said Pangilinan.

But Pangilinan’s interest is solely on an airport project and not on acquiring an airline.

“Running an airport is different from running an airline. Most of the variables going on in an airline are beyond your control. Number one is the price of fuel which is more than 50 percent of your operating expense. Number 2 is weather. Number 3 is economic conditions abroad. That’s a tough business,” said Pangilinan when asked to comment on rumors that he could be interested in buying into Philippine Airlines (PAL).

Earlier, PAL president Jaime Bautista said the flag carrier was not in talks with either Pangilinan nor with Ramon S. Ang, president of San Miguel Corp. (SMC).

“Those that are interested to invest in PAL are more of investment banks. We are talking to them now,” Bautista said earlier.

MPIC is also teaming up with diversifying conglomerate SMC to jointly build the new terminal.  But Pangilinan said the technical advisor will be solely for MPIC and not for the joint venture firm. “We would recommend to them. I assume they also don’t have any knowledge in airport also. It is best to have somebody that has run an airport before,” said Pangilinan.

Both companies confirmed that they are in talks with one another with respect to the construction of a modern terminal building at the DMIA in the Clark Freeport, Angeles City, Pampanga.

They intend to transform the DMIA into a world-class passenger terminal featuring a high-speed commuter rail system connecting DMIA and Ninoy Aquino International Airport in Manila. The project, estimated to cost around $150 million, will be able to accommodate up to 10 million passengers a year when completed.
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Old September 4th, 2010, 07:06 PM   #720
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Clark International Airport Corp. ends lease deal with Farm Fresh 25

Written by Lenie Lectura / Reporter
Thursday, 02 September 2010 11:27

THE Clark International Airport Corp. (Ciac) has terminated the lease agreement with a company that is operated by the son of a Pampanga mayor.

The contract with Farm Fresh 25 had been terminated by Victor Jose I. Luciano, president and chief executive officer of Ciac. 

Luciano, in a notice of termination sent to Patrick Pelayo, son of Candaba Mayor Jerry Pelayo and the president of Farm Fresh 25, said the company committed violations of the lease agreement that was signed on July 31, 2009. Farm Fresh 25, Luciano added, also failed to correct these violations.

Among the violations cited by Luciano is the nonpayment of advance lease payment and performance security upon the execution of the agreement.

The nonpayment was not corrected despite written and verbal reminder by the Legal and Finance Department of Clark Development Corp. (CDC).

The advance lease payment, equivalent to six months’ lease, to be paid upon the execution of the agreement, was paid only on Dec. 3, 2009, or five months after the signing of the lease agreement.

Also, the performance security, equivalent to 5 percent of the investment commitment, or P500,000, also to be paid upon the execution of the agreement, was paid only on Jan. 19.

The check used for the settlement of this company’s obligation under the lease was drawn against “insufficient fund” and was settled only three days later.

Luciano also said Farm Fresh 25 was also found to have started construction on its assigned site on May 29, 2009, without the necessary building permits.

This was done two months before the execution of the lease agreement.

Several verbal reminders and letters were given by Ciac to Farm Fresh 25 about the violation.  Likewise, the Building Utilities Regulatory Department (BURD) of the CDC had also sent notices of violation, but the company never responded.

In fact, the CDC’s legal department had scheduled two meetings with the BURD and Farm Fresh 25, but the latter still failed to send any representative to the meetings.

Also, Farm Fresh 25 was found renovating Building 7029, a structure at the back of the Flying V station which is not covered by the lease agreement, and is, therefore, considered by Ciac as illegal.

The company also ignored repeated notices to stop the renovation.

Further, the company subleased the area under the lease agreement to Hyundai IT Corp., a company engaged in the manufacture of digital display products, which used it as an IT warehouse, but such sublease is in violation of the lease agreement with Farm Fresh 25.

Another violation cited by Ciac is the failure of Farm Fresh 25 to pay the minimum guaranteed lease (MGL) provided for under the lease agreement from February 2010 to July 2010.

The unpaid MGL, which was set at the rate of $0.10 per sq m, has amounted to $12,728.82. Because of these violations, Ciac issued a notice of termination of the lease effective Aug. 1, which was received by Farm Fresh 25 office in Clark.

The violations also prompted Ciac not to endorse Farm Fresh 25’s request for permit to operate to the CDC, Ciac’s mother company.

Farm Fresh 25, which is involved in food hub business with just-in-time capability for exports, had leased 25,879 sq m in Clark’s Building 7194 and 4,298 sq m in Building 7204 located at the Clark Civil Aviation Complex.

In its notice of termination, Ciac asked Farm Fresh 25 to pay its arrearages with Ciac and to return the premises leased to it.
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