BIG BUZZ: MAR ROXAS' WALK OUT OF THE FAA MEETING

MANILA, MARCH 22, 2012 (INQUIRER) By: the staff Philippine Daily Inquirer - Has the government done enough to convince the Federal Aviation Administration (FAA) to remove local airlines off a blacklist of companies barred from expanding operations in the United States?

According to our sources, the FAA wrote a letter congratulating the Civil Aviation Authority of the Philippines (CAAP) led by Director General Ramon Gutierrez on the progress the government has made in addressing security loopholes and technical lapses that were the cause of the blacklist. The letter followed a technical assessment done earlier this year by the FAA—the first during the Aquino administration.

But, and this is a big one, the letter stopped short of saying that the government was ready for a more rigorous technical audit that would be the basis of the possible lifting of the country’s “category 2” status.

“The letter had a lot of congratulatory statements,” one industry official said, adding that these words of praise were mere “consuelo de bobo.”

“The CAAP may have been able to satisfy 99.5 percent of the FAA’s demands, but if we are still lacking that 0.5 percent, then we will still be on the blacklist,” said the source.

So disappointing were the results of the recent assessment that Transportation Secretary Manuel “Mar” Roxas II, based on several accounts, walked out of the meeting with FAA representatives and top CAAP officials.

“He was not trying to show disrespect to the FAA. He was showing his disappointment in Gutierrez,” our source said.—Paolo Montecillo

Win some, lose some

A big state-controlled corporation may soon give the pink slip to its publicist, a veteran in the game. This was after finding out that Mr. Publicist had taken on the job of doing PR for a beleaguered (and very high-profile) public official who has been at odds with President Aquino from day one.

Thus, this government corporation is on the prowl for a new publicist, especially because it has a lot of mass-oriented and charitable campaigns. This state corporation is Mr. Publicist’s biggest government account, but his wallet won’t hurt because the trade-off is well worth it. How so? We heard it’s almost like winning the lottery.—Doris C. Dumlao

Speaking of publicists …

Another cash-rich, state-controlled corporation has also attracted the interest of PR practitioners of late, especially in the wake of a recent crisis involving its top management (think foreign trips, hotels and expensive bags).

According to our sources, this agency was recently approached by a freelance publicist offering to help them spiffy up their image and was initially welcomed with open arms by one of the agency’s officials (linked to the previous administration).

The thing is, the agency already has its own PR group. The publicist has also been known to do subcontracted work for a known enemy of the P-Noy administration (clue: same guy referred to in the Biz Buzz item above). And the worst part: the newcomer recently sent work to his potential employers claiming credit for PR work done by its existing PR group. Tsk tsk. Talk about seizing opportunities from crises, huh?—Daxim L. Lucas

SEC job opening

There’s a vacancy among the ranks of the top brass of the Securities and Exchange Commission as the term of Commissioner Raul Palabrica ended last March 11 and SEC people are keenly awaiting—“with bated breath”—the Palace’s next move. Until the Palace names a replacement, Palabrica (a former PLDT official and Inquirer ombudsman) will carry over the term.

One of the candidates, believed to have a strong Liberal Party backing, is Hubert Guevara, who is no stranger to the corporate watchdog being a former director of the SEC enforcement and prosecution department. A source said Guevara has “been vocal about applying ever since.” Guevara is a nephew of an LP senator’s wife.—Doris C. Dumlao

Using the environment

When it comes to stopping big business nowadays, there’s nothing like leveraging off environmental issues—whether real or imagined—to win the public’s support. No, we’re not talking about the mining industry (although the environment has been effectively used here to hobble mining firms). We’re talking about the business of land reclamation.

There is at least one influential group involved in both business and politics that has made public pronouncements against one reclamation project, citing the damage it would cause to the environment surrounding their traditional “baluarte” (to the point of initiating legal action against the government agencies in charge of the project).

According to our sources, however, some representatives closely allied with the petitioning party have quietly approached the people in charge of the project with a clear message: “We want in.”

And what of the real environmentalists who think they’ve found an ally? Looks like they’re being taken for a ride on this one.—Daxim L. Lucas

‘Unifying factor’

With persistent rumors of Finance Secretary Cesar Purisima’s imminent transfer to a juicier Cabinet post, supporters of excise tax reforms are worried sick they would lose a key ally. On the other hand, some local farmers and alcohol and tobacco manufacturers seem only too happy to see him go.

In recent weeks, Purisima has been at the center of a brewing storm, with his dogged pursuit of a single-rate tax for so-called “sin products” (with one foreign cigarette firm clapping its hands in glee since it stands to benefit from it).

Of course, people aligned with the secretary’s views have also been disseminating news releases from NGOs and other interest groups lobbying for a change in the excise tax system. This early, the head of the economic team has already helped achieve what was once thought impossible: unifying rivals in the local spirits, fermented liquor, tobacco and even small-to-medium insurance companies, to rally against the government’s move.

Judging from the slew of full-page ads critical of the DoF-sponsored House Bill 5727, it would seem that Purisima and backers of sin tax reform have touched a raw nerve among the country’s manufacturing sector. Erstwhile bitter rivals San Miguel Corp. and Asia Brewery and giants Ginebra San Miguel, Tanduay Distillers, Emperador Distillers, Destileria Limtuaco, including their employees, have temporarily set aside differences to wage battle against a bill, which they claim would kill local industries and jobs.

Incidentally, even the usually silent and benign life insurance companies are now up in arms against Purisima’s proposal to raise their capital to a minimum of P1 billion (local insurers claim hundreds of insurance companies will be driven out of business, leaving only a handful of giant multinationals to lord it over the market).

So his critics are asking: Has it become the policy of this administration to favor foreigners over Filipinos in some industries? The gloves are off, so to speak.—Daxim L. Lucas

PAL rebranding

Flag carrier Philippine Airlines celebrated its 71st Anniversary at the One Esplanade Mall of Asia complex last week with a slew of interesting news, starting off with the launch of its revitalized brand image with the catch phrase “Love, Your PAL”—a brainchild of PAL executive vice president and Lucio Tan daughter Vivienne Tan.

Adding “oomph” to the airline’s image rebranding, PAL revived its “Charisma Girl” program from the mid-1980s – an advertising blitz using some of the smartest, prettiest and most personable flight attendants as company image models. The Charisma Girls will be featured in major PAL ads and promo materials from now until the next search in 2014. This year’s winners are flight attendants Kate Williams, Magnolia Gersbach, Priscilla Honorio, Kimberly Jamerlan, Wrizza Parulan and Margarette Gines.

PAL program partners Airbus and Mastercard were generous sponsors of the event, which organizers hoped would show that PAL remains a force to reckon with in the Philippine commercial aviation industry, despite rival Cebu Pacific nipping at its heels.

During the event, PAL top honchos led by president Jimmy Bautista kept mum about the San Miguel-PAL acquisition talks, smiling sheepishly when asked about the latest buzz on the issue. Contrary to rumors, SMC bigwig Ramon Ang was not among the guests in the full-packed events hall, and neither was his rival PLDT big boss Manny Pangilinan… even if both were invited.

And if our readers are wondering why the long rumored SMC-PAL deal hasn’t been announced yet, our sources say it’s because Lucio Tan has been flooded with counter-offers from a competing bidder in recent weeks, despite having an exclusivity arrangement with SMC. The counter-offers come in various permutations and combinations, including one that would allow the taipan to retain a small stake in the airline while accommodating the entry of another taipan (who has long been eyeing the business).—Daxim L. Lucas

Airline face-off

The country’s top carriers are set to face off for the right to fly to the United Arab Emirates (UAE), a potentially lucrative market where hundreds of thousands of overseas Filipino workers (OFW) reside.

Cebu Air Inc., operator of budget carrier Cebu Pacific, earlier applied for the rights to mount seven flights a week to the UAE. Cebu Pacific is currently getting as many entitlements as it can to as many countries as it can ahead of the launch of its long-haul operations by the third quarter of 2013. The company has announced that it plans to start operating to countries outside the four-hour range of its current fleet of Airbus A320 jets. Using Airbus A330 planes, Cebu Pacific said it may start flights to some points in the United States (Hawaii or Guam), Australia, some points in Europe and to Middle Eastern countries like the UAE.

All of the country’s entitlements to the Middle Eastern country, however, are currently held by rival Philippine Airlines (PAL). PAL is also renting out these entitlements to Middle Eastern carriers that fly to Manila under “code sharing” arrangements—which means the flag carrier makes money without lifting a finger.

Neither party is expected to back down. The only thing that can easily break the impasse, of course, is for the government—particularly the Civil Aeronautics Board—to do its job and negotiate for more rights to fly to the UAE to accommodate the demand of both airlines.—Paolo Montecillo

FROM PHILIPPINE AIR INDUSTRY NEWS

Roxas Fumes as FAA Team Gives CAAP Mixed Review Feb 1 Posted by Ben Kritz

In comments offered before their departure from the Philippines last Friday, the Federal Aviation Administration’s Technical Review team tasked with assessing the country’s readiness for an International Aviation Safety Assessment (IASA) audit complimented the CAAP on its progress, saying the agency had accomplished “more in six months than in the previous five years.” FAA team leader Jacques Astre stopped short of declaring the Philippines eligible for Category 1 status, however, pointing out that issues in Primary Aviation Legislation, Licensing & Certification Obligations and Resolution on Safety Issues still need to be resolved.

Of particular concern to the FAA inspectors were the CAAP’s certification processes for aircraft and personnel, with the pointed suggestion being made that the CAAP should focus its efforts accordingly. The mention of Primary Aviation Legislation is also a bit surprising, as that was one area which the Philippines was previously judged to have adequately covered; however, no details about that particular issue were offered by Astre or his team.

Although CAAP director-general Ramon Gutierrez was quoted by the Business Mirror as saying that the actual IASA audit was scheduled for sometime in February, the FAA team did not give any information about when it would take place, the implication being that another technical review may be necessary before the formal audit could be conducted.

Upon learning that the restoration of the country’s Category 1 status would not be taking place in the foreseeable future, DOTC Secretary Mar Roxas reportedly became infuriated with the CAAP officials in attendance at the briefing, berating them for failing to adequately prepare for the review before walking out of the meeting. In a later interview with the Inquirer, Roxas hinted that the Aquino Administration might consider giving up on the issue, explaining that “It’s our decision to invite them [the FAA] back,” based on the findings of the technical review team’s report.

According to a source at the FAA, that report should be available to the Philippine government “within the next couple of weeks.”


Chief News Editor: Sol Jose Vanzi

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