Legaspi Night Flights Suspended

19 October 2017

Night flights to and from Legaspi Airport was suspended Saturday by the Civil Aviation Authority CAAP) after lightning strike disabled its runway lights Friday night.

CAAP disclosed that a lightning bolt struck and damaged the less than a year runway end identification lights (REIL) system as it was activated for aircraft landing from Manila. REIL are high intensity strobe lights that are placed at both sides of the runway to mark the threshold.

Cebu Pacific (CEB) is the sole night flight user of Legaspi airport as it operates six daily flights to and from Legazpi via Manila and Cebu. Evening flights operated by CEB subsidiary Cebgo, depart Manila at 6:15 p.m. and 7:20 p.m, and arrive in Legazpi at 7:40 p.m. and 8:45 p.m., respectively. The return flights leave Legazpi at 8:20 p.m. and 9:35 p.m., and land in Manila at 9:40 p.m. and 10:55 p.m., respectively.

The airline operates night flights to and from secondary CAAP airports of Caticlan, Dumaguete, Naga, Roxas, and Butuan airports on top of trunk routes in Cebu, Davao, Bacolod, Iloilo, Puerto Princesa, Cagayan de Oro, and Zamboanga.

The lighting facilities for Legaspi airport was recently made operational in October last year.

C Series Becomes Baby Bus

18 October 2017

Montreal – Airbus SE (EPA: AIR) and Bombardier Inc. (TSX: BBD.B) become partners on the C Series aircraft programme after the former acquired the latter's C Series Jet programme in a deal that was sealed in 16 October.

Airbus will acquire a 50.01% interest in CSALP. Bombardier and Investissement Québec (IQ) will own approximately 30.09% and 19% respectively.

The agreement brings together Airbus’ global reach and scale with Bombardier’s newest, state-of-the-art jet aircraft family, positioning both partners to fully unlock the value of the C Series platform and create significant new value for customers, suppliers, employees and shareholders.

Bombardier's C Series jet seats 100 to 150 complementing Airbus A320NEO programme that offers 150-240 seats.

"This is a win-win for everybody! The C Series, with its state-of-the-art design and great economics, is a great fit with our existing single-aisle aircraft family and rapidly extends our product offering into a fast growing market sector. I have no doubt that our partnership with Bombardier will boost sales and the value of this programme tremendously,” said Airbus Chief Executive Officer Tom Enders.

Airbus will provide procurement, sales and marketing, and customer support expertise to the C Series Aircraft Limited Partnership (CSALP), the entity that manufactures and sells the C Series which is expected to strengthen and accelerate the C Series’ commercial momentum.

CSALP’s headquarters and primary assembly line and related functions will remain in Québec, with the support of Airbus’ global reach and scale. Airbus’ global industrial footprint will expand with the Final Assembly Line in Canada and additional C Series production at Airbus’ manufacturing site in Alabama, U.S. This strengthening of the programme and global cooperation will have positive effects on Québec and Canadian aerospace operations.

"Not only will this partnership secure the C Series and its industrial operations in Canada, the U.K. and China, but we also bring new jobs to the U.S. Airbus will benefit from strengthening its product portfolio in the high-volume single-aisle market, offering superior value to our airline customers worldwide." adds Enders.

“We are very pleased to welcome Airbus to the C Series programme,” said Alain Bellemare, President and Chief Executive Officer of Bombardier Inc.

“Airbus is the perfect partner for us, Québec and Canada. Their global scale, strong customer relationships and operational expertise are key ingredients for unleashing the full value of the C Series. This partnership should more than double the value of the C Series programme and ensures our remarkable game-changing aircraft realizes its full potential.”says Alain Bellemare.

Ownership Structure and Agreement Highlights
The C Series programme is operated by CSALP in respect of which Bombardier and IQ respectively hold approximately a 62% and a 38% interest. The Investment Agreement contemplates Airbus acquiring a 50.01% interest in CSALP. Airbus will enter into commercial agreements relating to (i) sales and marketing support services for the C Series, (ii) management of procurement, which will include leading negotiations to improve CSALP level supplier agreements, and (iii) customer support. At closing, there will be no cash contribution by any of the partners, nor will CSALP assume any financial debt.

Bombardier will continue with its current funding plan of CSALP and will fund, if required, the cash shortfalls of CSALP during the first year following the closing up to a maximum amount of US$350 million, and during the second and third years following the closing up to a maximum aggregate amount of US$350 million over both years, in consideration for non-voting participating shares of CSALP with cumulative annual dividends of 2%, with any excess shortfall during such periods to be shared proportionately amongst Class A shareholders.

Airbus will benefit from call rights in respect of all of Bombardier’s interest in CSALP at fair market value, with the amount for non-voting participating shares used by Bombardier capped at the invested amount plus accrued but unpaid dividends, including a call right exercisable no earlier than 7.5 years following the closing, except in the event of certain changes in the control of Bombardier, in which case the right is accelerated.

Bombardier will benefit from a corresponding put right whereby it could require that Airbus acquire its interest at fair market value after the expiry of the same period. IQ’s interest is redeemable at fair market value by CSALP, under certain conditions, starting in 2023. IQ will also benefit from tag along rights in connection with a sale by Bombardier of its interest in the partnership.

The Board of Directors of CSALP will initially consist of seven directors, four of whom will be proposed by Airbus, two of whom will be proposed by Bombardier, and one of whom will be proposed by IQ. Airbus will be entitled to name the Chairman of CSALP.

Subject to obtaining the required approval from the Toronto Stock Exchange, the transaction also provides for the issuance to Airbus, upon closing, of warrants exercisable to acquire up to 100,000,000 Class B Shares (subordinate voting) of Bombardier (representing approximately 5% of the aggregate issued and outstanding Class A Shares (multiple voting) and Class B Shares of Bombardier on a fully-diluted basis, and approximately 5% of the aggregate issued and outstanding Class A Shares and Class B Shares on a non-diluted basis), at an exercise price per share equal to the US$ equivalent of C$2.29, which represents the volume-weighted average price of the Class B Shares over the five trading days ending Friday, 13 October 2017. The warrants will have a five-year term from the date of issue, will not be listed and will provide for market standard adjustment provisions, including in the event of corporate changes, stock splits, non-cash dividends, distributions of rights, options or warrants to all or substantially all shareholders or consolidations.

The issuance of the warrants and their terms were negotiated between Bombardier and Airbus at arm’s length and will not materially affect control of Bombardier. Security holder approval will be required under Toronto Stock Exchange rules due to the fact that the warrants will be issued later than 45 days from the date upon which the exercise price was established. Such approval is expected to be obtained by way of written consent of shareholders holding more than 50% of the voting rights attached to all of Bombardier’s issued and outstanding shares.

The transaction has been approved by the Boards of Directors of both Airbus and Bombardier, as well as the Cabinet of the Government of Québec. The transaction remains subject to regulatory approvals, as well as other conditions usual in this type of transaction. There are no guarantees that the transaction will be completed and that the conditions to which it is subject would be met. Completion of the transaction is currently expected for the second half of 2018.

Iloilo Airport Closes After Aircraft Accident

5J 461 Verred Off Runway

14 October 2017

A Cebu Pacific (CEB) Airbus 320 plane with serial number RP-C3237(sn) carrying 180 passengers from Manila has veered right off runway after landing at Iloilo International Airport runway 20 Friday evening ended up stopping on the grass.

All passengers were accounted for and was safely evacuated after the airline initiated emergency evacuation procedure when the aircraft came to a complete stop after landing.

The airport was declared closed by Civil Aviation Authority (CAAP) last night because of runway obstruction affecting 33 subsequent domestic and international flight to Iloilo.

The airport is expected to be closed until Sunday evening.

Sayak Airport Set For Class II Upgrade

3 October 2017

Sayak Airport in Siargao Island is set for aerodrome upgrade as passenger traffic soars since it re-opened to the public in 2010 according to the Transport Department (DOTr).

Transport Secretary Arthur Tugade disclosed last week that they already have the "Masterplan" in place for Sakay Airport Development projected to cost around ₱5.9 Billion based on 2013 price indices from a ₱7 million feasibility study completed in 2014 by consulting firm Philippines-Japan Airport Consultants Inc. (PHILJAC).

Tugade said the airport development will be undertaken in two phases. The first phase which already started, include airside developments for runway extension up to 2km. x 30m. and will cost around ₱1.2 Billion, and the second phase is allotted for runway, apron, and terminal expansions, including procurement of navigational and meteorological equipment's which costs another ₱4.7 Billion.

DOTr has been extending the community classified airport since 2013 as Sayak airport only has 1 kilometer x 30 runway good for turboprop flights with less than an hour range. It cannot handle turboprop flights originating from Manila due to runway limitations. It has since been extended to 1,300 meters on a ₱350 million budget enabling it to support BAE 146 operations.

In 2015 GAA, the airport was allocated another ₱264.1 million for runway extension up to 1,500 meters construction of which is scheduled to be done in the fourth quarter of this year.

Commercial flights started flying the airport in 2011 as Cebu Pacific launched twice-a-week ATR72-500 Cebu-Siargao services on March 4. Flight frequency were increased in 2014.

The airport saw its first jet land in February this year as Skyjet offered direct thrice a week flights to Manila on BAE146-200. Cebu Pacific intends to offer direct turboprop service from Manila on December 17 while Philippine Airlines intends to offer turboprop services from Cebu on Q300 from December 1.

Completion of the phase 1 project will upgrade the airport to Class II status from the present community type, while phase 2 project completion will upgrade the airport to international standard Class 1 airport.

Sayak airport is expected to be reclassified to Class 1 international standard airport when finally completed.

Bukidnon Airport Takes Shape

2 October 2017

PAL Upgrades OnAir

2 October 2017

Philippine Airlines (PAL) is upgrading its wireless in-flight entertainment and connectivity (IFEC) product OnAir Play to be installed on all its long haul fleet.

All existing Boeing B777 fleet equipped with Inmarsat’s SwiftBroadband will be upgraded to Inmarsat’s Global Express (GX) Aviation powered by Honeywell’s JetWave SATCOM terminal starting with the aircraft that is scheduled to arrive in December 2017.

The new IFEC system will also be fitted to all its Airbus A350s and A321NEOs orders that will start arriving in 2018.

“GX Aviation is specifically designed for in-flight broadband, offering unprecedented speed, reliability and consistency,” said Frederik van Essen, Inmarsat Aviation’s SVP of strategy and business development.

GX Aviation will bring the newest generation of Ka-band service available since 2016 to PAL providing Internet broadband connection speeds of 50Mbps virtually everywhere in the world and is set to change the shape of inflight connectivity of the airline as it strives to upgrade its product offer.

“Philippine Airlines is absolutely focused on delivering the best-possible passenger experience, driving towards our goal of becoming a full-service five-star carrier. PAL is at the forefront of the connected aircraft revolution, and we are excited about the future. Service innovations, together with flight route network expansion and fleet modernization, remains a top priority.” PAL President and Chief Operating Officer Jaime J. Bautista said.

OnAir is a proprietary product of SITA which provides internet and telephone connection to airborne aircraft. It was fitted to the airline's long haul aircraft ranging from the B777s, A340s and A330s since 2014.

SITA's OnAir will enhanced connected experience for passengers and cabin crews with its integrated in-flight entertainment connections from Zodiac Inflight Innovations, aside from its existing Mobile OnAir service, an OnAir Plug’s secure online channel for in-flight card transactions and crew and passenger interactions.

DOTR To Ground PAL

Owes the Philippine Government ₱7 Billion in Fees and Charges

27 September 2017

The Department of Transportation (DOTr) is taking legal action against Philippine Airlines (PAL) if the flag carrier fails to settle almost ₱7 billion in unpaid “navigational fees and other charges” in the next 10 days.

DOTr said that PAL owes the Civil Aviation Authority of the Philippines (CAAP) ₱6.594 billion as of December 2015. The flag carrier also has a separate overdue account of ₱370,583,588.96 for January - July 2017 alone.

Meanwhile, PAL also owes Manila International Airport Authority (MIAA) ₱322,112,385.00, as of 26 September 2017.

"Final demand for full payment of all unpaid charges has been sent to PAL, preparatory to the filing of appropriate legal action in order to protect the interest of government," the DOTr said in a statement.

DOTr said that aside from the collection suit PAL will not be permitted to use the facilities of Manila International Airport, its main hub. The airline will not be also permitted to fly for failure to pay air navigational fees and other charges.

"Pay up or prepare to be grounded" - Duterte
In a speech at the Philippine Constitution Association on Tuesday night, President Rodrigo Duterte has warned business tycoon Lucio Tan, chairman and chief executive officer of Philippine Airlines, to settle his liabilities with the government in 10 days or he would shut down Terminal 2 of the Ninoy Aquino International Airport (Naia).

Aeronautical Fees are supposed to be remitted to the General Fund in the National Treasury to be used for the maintenance and operation of other international and domestic airports in the country, in accordance with Section 3 of E.O.No. 298 dated July 26, 1987.

Duterte said the money could already have been used in the completion of much delayed airport projects in Tacloban and Bicol had PAL paid for their dues.

The President said he don't care if plenty of passengers would be inconvenienced in PAL's grounding.

“We have to enforce the law.if you are put into a great discomfort, sorry. Wala akong magawa. The law is the law. It is the law,” Duterte explains.

DOTr earlier told PAL to “settle your obligations in 30 days, otherwise, we will be constrained to do all that is necessary to protect the interests” of the state. It was amended later to 10 days by order of the President.

The transport department confirmed that PAL had negotiated to settle its growing unpaid fees in seven years but the request was denied telling the airline to pay the fees in full like any other airline would.

PAL said it has received demand letters from CAAP as early as August 2016 to settle unpaid navigational charges “in the amount of ₱6.63 billion” and that it was seeking a compromise settlement. It already settled ₱370 million out of these unpaid charges.

“This issue on alleged unpaid navigational charges involves complex legal issues which PAL has been trying to thresh out with the Authority for years,” PAL Spokesperson Cielo Villaluna said.

Villaluna said it already submitted an offer to the CAAP through its inter-agency panel of negotiators under CAAP Authority Order 149-17, but has not received a response just yet.

The airline is offering to pay the government ₱4 billion in seven years to finally settle the issue on unpaid navigational charges.

"We look forward to meeting the negotiating panel and we are ready to submit a Compromise Agreement to settle this issue once and for all," PAL added.

CAAP said it has unpaid accounts from PAL amounting to ₱6,965,146,149.63 as of July 30 2017. Of this amount only P3.6 billion of the P6.91 billion being demanded by CAAP is backed by invoices while the rest is unsubstantiated claims.

Why it Grew So Big?
DOTr disclosed that landing and parking fees has not been paid by PAL since its privatisation and occupation of the Ninoy Aquino International Airport (NAIA) Terminal 2 in 1998.

PAL is supposed to pay the government ₱803 million per year for the exclusive use of the terminal but wasn't paying because there was no lease contract executed between MIAA and the airline.

PAL was owned by the government until 1996 when it was fully privatised. The airline enjoyed tax privileges and fee exemptions prior to its privatisation in 1992 as a government owned airline. It went into bankruptcy and rehabilitation in 1999. It was allowed one year free-use of the terminal and free navigational fees by then President Joseph Estrada as government support for its rehabilitation efforts.

In 2002, the Department of Justice said Philippine Airlines is no longer exempt from payment of aeronautical fees to the Manila International Airport Authority (MIAA) and was sued for payment. In 2007, the Court of Appeals upheld a compromise deal between MIAA and PAL for the settlement of P2.93 billion in unpaid aeronautical fees to be paid in tranches for seven years. Until now this settlement deal has not been fully paid by PAL contrary to their earlier made commitments which got the ire of President Duterte.

The Transport Department also said that PAL wanted to use Terminal 3 all to themselves in 2005 prior to the move of Cebu Pacific and Air Philippines to use the terminal but the request was denied by MIAA because it had a pending ₱5.1- billion unpaid fees owed to the airport owner.

PAL Grows Cebu Hub More

Opens Bangkok and Beijing

 23 September 2017

Philippine Airlines will open Bangkok and Beijing from Mactan Cebu beginning December 2 for thrice a week flight on the A321-200 every Tuesday Thursday and Saturday, while Beijing will be added once a week starting November 4 and every Saturday thereafter with A320-200.

Growing Back Middle East
PAL also announced that it will be resuming the thrice weekly service between Manila and Abu Dhabi from October 31 as bi-class A330 becomes available to the airline. It will also introduce business class services and additional flights to Dammam.

PAL President Jaime J. Bautista said the flag carrier will provide a bi-class (business and economy) service across all its Middle East routes coupled with free internet and wireless IFE services to improve its product offer. Seven A330-300s will be deployed for this route.

The airline currently operates 30 flights per week to the Middle East flying daily for Dubai and Riyadh as well as five times weekly flights to Dammam, four weekly flights to Kuwait, and Doha, and thrice weekly flights to Jeddah.

PAL said it will be operating 33 weekly nonstop flights to seven destinations in the Middle East by December 1.