PAL'S AMBITIOUS PLAN: DOUBLE BOEING 777 FLEET; FLY NON-STOP TO PARIS, TORONTO, NEW YORK
 

[PHOTO - PAL/SMC pres. Ramon Ang, Dan Schull of Boeing and Michael Tan of the Lucio Tan group toast the arrival of PAL’s third Boeing 777-300ER as emcee Patti Grandidge looks on.]

MANILA, JULY 27, 2012 (INQUIRER) By: Daxim L. Lucas, Doris C. Dumlao - The Philippine Airlines said that it would acquire three more Boeing 777-300ERs in addition to the three it has on its fleet in a bid to save money by shifting away from its current flagship, the gas-guzzling Boeing 747-400.

The announcement made by PAL president and chief operating officer Ramon S. Ang Monday evening effectively raised the flag carrier’s order for the more fuel-efficient aircraft from four to six by converting previous options for two more planes into firm orders.

PAL’s first two B777 aircraft were leased from GE Capital Aviation Services (Gecas), with its most recent delivery being company-owned. The three additional B777s—scheduled for delivery in November 2012, April 2013 and November 2013—will all be company-owned.

Along with what sources said was a soon-to-be unveiled order for more Airbus planes, the new acquisitions would be part of the airline’s operations overhaul which, Ang said, would save it as much as $300 million in operating costs a year.

The PAL chief said the airline would also implement by October a scheme wherein its biggest aircraft would be used mainly for long-range flights, while shorter routes would be serviced by smaller aircraft.

At present, even short flights like the one-hour Manila-Cebu route are, on occasion, serviced by PAL’s largest aircraft, the Boeing 747-400, with only a few seats occupied on any given flight.

Ang added that apart from the inefficiency of using half-full, wide-bodied aircraft to service short routes, the high frequency of take-offs and landings also added to the “fatigue” experienced by a particular airplane, contributing to faster depreciation and higher maintenance costs.

Ang also disclosed PAL’s plan to soon introduce nonstop flights to Toronto, Paris and New York City.

He said that Toronto could be added in three months while flights to Paris could be started by February next year.

He said the strategy for PAL was simple: modernization of its fleet, expansion of its network and improvements in passenger service. “PAL must become known for its warm, sincere and hospitable service. Each of us must be passionate about exceeding the expectations of our passengers in creative and helpful ways,” Ang said.

He described PAL as operating in a very competitive environment—but one with a wealth of opportunity. “The Asia-Pacific is the fastest-growing market for air travel and we need to improve our competitiveness as an airline,” he said.

“Our number one priority is to turnaround PAL by tapping into the strengths of San Miguel Corp. and the Lucio Tan Group of Companies. As PAL president, I am committed to transforming our airline’s business operations,” he said.

Also unveiled Monday night were: New inflight dishes prepared by five top-rated guest chefs; new book-and-buy ticketing kiosks to be installed at selected Petron gas stations; and Apple inflight iPads for entertainment on board trans-Pacific flights.

The first three Boeing 777-300ERs were delivered in November 2009, January 2012 and June 2012. The 370-seater B777s currently fly to Vancouver, Japan, Hong Kong, Australia and Japan (via Cebu).

At present, the airline—51 percent owned by tycoon Lucio Tan and 49 percent by San Miguel—flies to 30 international and 20 local destinations.

Combined with its budget carrier subsidiary, Air Philippines, it has a total of 56 aircraft consisting of five Boeing 747-400s, three Airbus A340-300s, three Boeing 777-300ERs, eight Airbus 330-300s, 25 Airbus A320s, four Airbus A319s, five Bombardier Q400s and three Bombardier Q300s.

PHILSTAR BUSINESS COLUMN

Can P-Noy deliver Cat-1 upgrade? DEMAND AND SUPPLY By Boo Chanco (The Philippine Star) Updated July 27, 2012 12:00 AM

It was a grand launch by Philippine Airlines last Monday of their new planes, new in-flight cuisine and new flight attendants. It is new management after all, led by San Miguel’s Ramon Ang, and you can feel they are raring to go.

Except for one thing… one big thing… we are still mired for almost five years now in the ignominy of a Category 2 downgrade by the US Federal Aviation Administration (FAA) based on technical reviews. Two other foreign aviation regulatory entities aside from the FAA have downgraded us: the EU and the ICAO or the International Civil Aviation Organization.

What these agencies are saying is that our country’s aviation regulatory set-up is highly deficient or unsafe. It is so unsafe that the Europeans who come here as tourists and ride Philippine-registered aircrafts do so at their own risk. Their insurance will not cover those rides on PAL, Cebu Pacific, Zest, SEAir, etc.

Well… what can we say? Philippine aviation used to be regulated by the Air Transportation Office. Congress quickly passed the bill establishing CAAP or the Civil Aviation Authority of the Philippines after the downgrade during the watch of Ate Glue. CAAP was supposed to be a more autonomous authority that will improve the situation.

But nothing has so far convinced the FAA and ICAO and the Europeans that we deserve a restoration to Category 1. It wasn’t surprising we got nowhere during the watch of Ate Glue. Her DOTC Secretary then, a former police officer, was more interested in other things like the ZTE deal.

When P-Noy took over, he appointed the Aquino family pilot to head CAAP even when industry murmurs indicated he didn’t have the necessary managerial skills for such a critical mission. I took the pains of listening to Ramon Gutierrez and getting his side of the story and to his credit, he also quickly responded to my questions every time I e-mailed him. I gave him the benefit of the doubt.

But apparently, I was not the only one he was stringing along. He was doing the exact same thing to P-Noy. Unfortunately for him, P-Noy had the power to fire him after he failed to deliver on his promises. To P-Noy’s credit, he took the difficult task of firing a family friend for non performance.

So now we have a new CAAP director-general in Gen. William Hotchkiss, a former commanding general of the Air Force. General Hotchkiss is known for his tough management style and hopefully we finally have the right man.

I talked to him during the PAL launch last Monday and he seemed pretty sure that we will get that upgrade soon but wouldn’t promise a date. I have my doubts but again, I will take his word for it… for now.

He said they are feverishly working on it, keeping 12 hour days in the office in their attempt to satisfy the FAA. He refused to say more about it beyond letting me know that they will make a status report to P-Noy in two weeks.

Since he wouldn’t talk about it anymore, we ended up reminiscing about the Blue Diamonds of the Air Force. The general and his Deputy Director General at CAAP, John Andrews, are Blue Diamond veterans.

The Blue Diamonds, to update our younger generation, is Philippine Aviation at its best. Once upon a time, we had enough fighter planes in the Air Force to have an aerobatic team that flies in formation during important national celebrations.

It is almost unfair our young people are being deprived the thrill of seeing the Blue Diamonds display their stunts and fly low at the Luneta as part of the traditional civic-military parade during Independence Day. Those were the days when our Air Force was one of the best in the region.

Unfortunately, as with everything else that got neglected by the Marcos dictatorship and the succeeding administrations, our Air Force deteriorated and the Blue Diamonds are now just a memory. Gen Hotchkiss and I can only shake our heads in regret.

That is also the story of how our aviation sector was downgraded to Category 2: the ATO and even the CAAP became infested with bureaucratic vermin. They allowed PAL to ignore its bills (landing fees, etc) amounting to billions of pesos. We need technically qualified people at CAAP and its rules must be responsive to its needs and responsibilities.

A veteran newsman covering the aviation sector for decades told me during the same PAL cocktails that it may take as long as three years for us to convince the FAA and ICAO we have mended our rotten ways. So as we watched an audio visual presentation flashed on the giant screen announcing the new Boeing 777s and the plans to fly to more US cities, Europe and the Middle East, we concluded Ramon Ang is dreaming.

We need dreamers like Ramon Ang but we also need government officials who will do what they must to make those dreams come true. Those 777s cannot fly to the US and Europe any time soon. Lucky for RSA that Canada is allowing the use of those long range aircrafts to fly to Vancouver and Toronto. New York may be near enough from Toronto but still quite far without the Cat 1 upgrade.

I am told by sources that FAA’s beef is the way CAAP is struggling to provide qualified check pilots, mechanics, air traffic controllers and updated airport technology to ensure safety. Mar Roxas has sat on a proposal to provide a modern Communication, Navigation and Surveillance/Air Traffic Management (CNS/ATM) system for our prime gateway airport and for the country.

Mar suspects, likely for good reason, that corruption tainted the purchase of that facility through JICA during Ate Glue’s watch. But studying it for a year is a bit much. He has to move on with a solution of his own by now. Besides, I am told most of the equipment has been delivered waiting to be put into action.

Indeed, infrastructure hasn’t kept pace with the growth of the Philippine aviation industry so that there is a serious congestion at NAIA now while many provincial airports are ill-equipped and without facilities for night operations. It is such that local airlines that invested billions on aircraft purchases and leases are now being punished with curtailed flights.

Sure, we have done a lot of things by now to modernize operations of CAAP but it still seems that the measures we have taken are stop-gap in nature. FAA is looking for sustainability.

For example, we have hired retired pilots of PAL to perform the role of check pilots. Because the pay of pilots are way above what government officials get, we were unable to get licensed check pilots until these retired pilots agreed to do one for their country with little regard for the salary.

That may seem OK for now but the FAA wants a game plan for the future. That goes too for air traffic controllers and inspectors. P-Noy must find a way to upgrade salaries further for these technical personnel so that more young people will find it worthwhile to train to serve in these functions and not leave for better pay abroad. That’s how to convince FAA that this time we are serious.

The stakes are high in terms of dollars and cents for Philippine carriers and more importantly in terms of national pride. P-Noy must have a single-minded, all hands on deck focus on getting that Category 1 upgrade within his term, preferably in the next year.

Otherwise, the only recourse of our airlines is to wet lease (including crew) aircraft registered in the US and Europe. But that cannot be done under the present Philippine law, one other reason FAA is withholding an upgrade. I understand CAAP has asked Congress to revise Republic Act 9497 to allow such leases by local carriers in the country.

PAL used to fly US-and European-registered airplanes, which the airline rented, and which were allowed under the now-defunct Air Transportation Office (ATO), before the creation of CAAP. I know this demand of the FAA sounds like a commercial strong arm tactic but it is also the only way we can get our upgrade quicker.

Or maybe, PAL can register its new planes abroad, instead.

The question is: Can P-Noy deliver a Cat 1 upgrade? I hope so.

BTW… I was told Mar Roxas doesn’t have the guts to move the corporate jets out of NAIA and into Sangley to relieve congestion. Maybe P-Noy, who got rid of the wang wang, can show him how to have the balls to deal with big shots.

Air traffic talk

Lady Radar Controller: “Can I turn you on at seven miles?”

Airline Captain: “Madam, you can try.”


Chief News Editor: Sol Jose Vanzi

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