China travel ban to Philippines imminent?

The Philippine tourism industry is bracing itself for an imminent travel ban by the Chinese government, as tensions over the disputed Scarborough Shoal continues to heighten.

This developed as Cebu Pacific said it had to suspend its twice-weekly charter service between Shanghai and Clark, "effective May 12" after a charter company in China cancelled its bookings.

By late afternoon Thursday, the Department of Tourism confirmed that some hotels have already reported booking cancellations from China.

Latest data from the DOT showed in the first quarter of 2012, Chinese tourists jumped by 77.53 percent to 96,455 from 54,332 in the same period last year. China is the Philippines' fourth largest market for tourists, accounting for 8.4 percent of market share from January to March 2012. (Originally published in InterAksyon.com, May 10, 2012.)

The new Caticlan airport terminal

I HAVE been going to Boracay Island since the late 80s, back when it was still basically, an open stretch of pure powdery white sand, with lush coconut trees dotting the shore, and just a smattering of resorts and restaurants. Much of the electricity was still supplied by generators.

Going to Boracay was still by land – driving all the way from either Iloilo City, Roxas City, or Antique - if you were not from Aklan. If you managed to find a plane to fly you, you would still usually land at the Kalibo airport, in Aklan, then still make the drive to Caticlan, the jump off point to the gorgeous resort island. From Caticlan, pump boats could take you to Boracay, for a minimal fee.

Since regular scheduled air services began in Caticlan in 1996, travelling to Boracay has been faster but not necessarily more convenient for tourists. Tourists arrived in a third-class provincial airport, which was not airconditioned until this year, and where passengers were expected to get their own luggage directly from the airline trolley as there were few porters.

On my second trip to Boracay this year, last July 30, I was amazed at the major improvements in the Caticlan airport, courtesy of San Miguel Corp. president, Ramon Ang. The terminal seemed larger, it was now airconditioned, and there was, for joy! a baggage carousel. Not to mention, the restroom was clean and smelled good, thanks to the burning of perfumed oils, and actually reminded me of a hotel washroom. There was also a money-changer on hand to enable foreign travelers to exchange their currencies for our local pesos.

At the departure terminal, check-in counters are sleek and brightly lit, everyone is courteous - from the airport security to the terminal fee collectors. It is a two-story affair w/ even VIP lounges for departing guests checked in at Shangri-La Boracay, and Discovery Shores. There are a few food counters where passengers can satiate their hunger pangs and last-minute pasalubong shopping. The most notable feature of the departure terminal, however, is a small private breastfeeding room for nursing mothers and their babies. My, my...will wonders never cease?!

The modernization of the Caticlan airport is said to cost $300 million, which includes the improvement of the passenger terminal and the extension of the airport runway. During the summer season, small jets and and most turbo-props of the leading airlines are able to land in the short runway.

But when the rainy season comes around, it is usually only the Dornier 328s of Seair, and the Dash 8's of Airphilippines Express which are able to land in the slippery runway. The rest of the planes such as the larger ATRs of Cebu Pacific are either diverted to Kalibo or return to Manila or other points of origin.

How true is it though that the newly-improved Caticlan passenger terminal is actually only temporary and a permanent structure will rise in the municipality of Nabas, once the runway extension is completed? According to Boracay resort owners, this was the tradeoff for the Nabas local government to allow the mountain in their midst to be lopped off to give way to the runway extension. If that is true that will take tourists a longer time to get to Boracay because it is farther than Caticlan, as you can see from the Aklan map below.


While having a passenger terminal will definitely boost the living standards in Nabas which is currently a fourth class muicipality, hopefully San Miguel's Ang will reconsider and keep the comfort of Boracay tourists top of mind.

In the meantime, I wish the Caticlan local government would fix this:


This is where we landed, the tiny dock in Tabon, Caticlan, after crossing from the Tampisaan port in Boracay (the severe weather condition as we left the island prevented many from leaving via the usual Cagban jetty port). Tabon is considered an emergency dock where pump boats can park when the waves make it impossible to cross to the main Caticlan port.

The bamboo crosspaths, however, are very unstable, and there were a few times I almost lost my footing. This is an accident waiting to happen, and its sturdiness needs to be addressed immediately.

*I own the copyright to all the photos published here, except for the Aklan map, which I borrowed from the Makato Community eCenter.

PH has 'positive image' among Chinese travelers

(Marco Polo Parkside Beijing general manager Stanley Lau, fourth from left, and Philippine government officials toast the official launch of the Davao Cultural Festival at the hotel on June 11, at the Café Marco Polo. The promotion will run until June 30 and is co-sponsored by Cebu Pacific and the Department of Tourism-Region 11. From left, after the emcee, are Mary Ann Montemayor, chairman of the Davao Regional Tourism Council; Art Boncato, regional director of DOT-11; Richard Chang, the hotel’s director of sales and marketing; Alex Chua, charge d’affaires of the Philippine Embassy in Beijing; and Jazmin Esguerra, tourism attaché, Philippine Embassy, Beijing. China is the fourthlargest tourism market of the Philippines. PHOTO BY ARNOLD KING)

BEIJING—The hostage crisis involving Hong Kong tourists in 2010 and the ongoing skirmishes in the South China Sea (now West Philippine Sea to the Philippines) between the Philippines and China are not deterring the influx of Chinese tourists into the Philippines.

The Chinese market is expected to further improve, especially with the recent marketing push of Davao as an ecotourism, extreme adventure, and culinary destination, especially among Beijing travelers, a Philippine tourism official said.

Cebu Pacific, meanwhile, is assessing the feasibility of plying a Davao-Beijing route, an airline representative said.

In an interview, Jazmin C. Esguerra, tourism attaché of the Philippine Embassy in Beijing, said Chinese travelers, especially from this city, are currently on the lookout for new exciting destinations in the Philippines.

“The honeymooners, for example, like island destinations and Davao will be a perfect new addition to their itinerary because it has Samal Island, and island-hopping tours,” Esguerra said.

Data from the Department of Tourism (DOT) showed that Chinese travelers to the Philippines grew 18.54 percent to 71,113 from January to April 2011, making them the fourth-largest tourism market. For 2010 alone, arrivals from China jumped 21 percent to 187,446, just ranking behind arrivals from Korea, the United States and Japan.

Esguerra said this substantial growth in arrivals indicated that the Philippines still has a “positive image” among Chinese travelers, despite the bungled hostage rescue attempt in August 2010. “While there were some tour groups that canceled their trips to the Philippines via their travel agencies for about two months after the incident, many of them booked their trips directly online,” she said.

Esguerra added that current dispute over the Spratly’s Islands has “presently no effect” on the tourism decisions of the Chinese. “Tourism is nonpolitical,” she said.

Many Beijing travelers, she added, are now spending more on travels because they are earning more, and have become tech-savvy—they now do most of their bookings and reservations online.

“They see the Philippines as a romantic destination, that’s why they often go to Boracay and Palawan. And because of the tsunami [which recently hit Japan], they have redirected their focus on Southeast Asia,” Esguerra said. Her office is currently helping push the Philippines as a wedding and honeymoon destination, which will attract more upmarket travelers from Beijing.

Aside from being a romantic destination, the Philippines has also become an ideal destination for the meetings, incentives, conferences and exhibitions market. She said a group of 85 company employees recently traveled to the Philippines as part of their incentives package.

A Davao Cultural Festival is currently being held at the Marco Polo Parkside Beijing, on the initiative of its general manager Stanley Lau, who managed the hotel’s Davao unit from 2004 to 2009.

The Davao delegation earlier made presentations before members of the Chinese media, promoting the many activities that can be pursued in the city.

Art Boncato, regional director for DOT’s Region 10 said the cultural festival, themed “From Islands to Highlands” was in line with the Philippine Independence Day celebration at the hotel. The event was also cosponsored by Cebu Pacific, with the participation of the Davao Region Tourism Council, Davao Eco-Crafts and the Center for Asian Culinary Studies-Davao (CACS).

The festival was launched on June 11 and will run until June 22, while the dishes of Davao will be a mainstay during the lunch and dinner buffets at the hotel’s Café Marco until June 30. The dishes featured at the food fest were by Chef Gene Gonzalez and his CACS crew. While the festival is ongoing, cultural dancers from Davao will provide entertainment for Café Marco’s guests.

Meanwhile, Agnes Gupalor, Cebu Pacific’s sales manager for the Visayas region told the BusinessMirror the airline is “currently studying” the market for Chinese travelers to find out if it would be feasible to have direct flights between Davao and Beijing. Davao already hosts an international airport where Silk Air flies regularly from and to Singapore.

Addressing members of the Chinese media, Gupalor said the airline “is very optimistic about expanding our services in North Asia, especially with the observed 23-percent year-on-year passenger growth in Greater China for the first quarter of 2011.” The airline’s general sales agent in Beijing is Pacific Aviation.

She noted that in May 2011, the airline “carried over 1 million passengers in one month alone, a first for any Philippine carrier in the history of Philippine aviation.”

(My story was originally published in the BusinessMirror on June 21, 2011.)

Stupid! Heartless! Inappropriate! (UPDATED)

THE Philippines enacted Republic Act 7277 or the Magna Carta for Disabled Persons on March 24, 1992. This is why many of our malls now, for instance, have ramps for wheelchair-bound customers, and doorways in many public establishments have specific dimensions to let wheelchairs through.

The law specifically prescribes mechanisms to integrate disabled persons – whether they be mentally-challenged, physically handicapped, or psychologically impaired – into the mainstream society, and gov't must ensure the means to rehabilitate them or contribute to their development.

So it is really disgusting to read a story about an airline refusing to transport a passenger just because he is a "special child," which is apparently the airline's code-phrase for someone who is mentally-impaired. Airline officials apparently declined to be interviewed about it and only issued a press release saying that management has already apologized to the victim's family.

I thought twice about blogging about this incident, because I have some friends representing that airline. But I'm sorry guys, there are things that need to be said.

Apparently, the airline has an internal policy of allowing only one mentally-handicapped person onboard any of its flights. There was a child w/ Down's Syndrome who had boarded earlier than the victim in this incident, so the airline crew was only trying to follow company policy.

But I still don't get why there is even such a rule in that organization. Is management afraid that the mentally handicapped persons would become unruly during the flight and cause mayhem among other passengers? Are mentally-challenged persons flight risks?

Whatever the airline's reason for having such an internal policy, it is very clear that this is discriminatory. It opens up the airline to a lawsuit, because the Magna Carta for Disabled Persons clearly states:

"Sec. 34. Public Transportation. — It shall be considered discrimination for the franchisees or operators and personnel of sea, land, and air transportation facilities to charge higher fare or to refuse to convey a passenger, his orthopedic devices, personal effects, and merchandise by reason of his disability."

I can understand how humiliated the mother must have felt, esp. for her child. That is a pain that cannot easily be erased by an apology and a year's worth of free airline tickets. This was clearly more than just a misstep on the part of the airline. It was not as simple as having fumbling airline crew who didn't know how to handle the situation. It is plainly cruel and inappropriate in this day and age to have an internal policy discriminating against mentally-handicapped persons, period. I hope the airline scraps this policy once and for all.

(UPDATE 01/08/10 at 5:26 pm) Cebu Pacific sent me this press statement and attached document yesterday regarding their policy on transporting mentally-handicapped persons. In effect, it says the airline clarifies that it has no such policy that refusing carriage of those with special needs. In the interest of fairness, I am herewith publishing their side:

CEB statement on Alcantara case

Furthermore, I found Resolution 700 of the International Airline Transport Association which prescribes procedures/rules on transporting disabled persons. The rules are silent on how many disabled passengers can actually be transported on any flight:

IATA Resolution 700 (from IATA website)

Now, given CEB's statement re: admitting fault of its cabin crew, clearly management is still answerable for the lack of the flight steward's training. I just hope this issue is solved amicably, with the welfare of the victim actually as the goal of the settlement, and not the ahem, lawyer's welfare.

Caticlan monopoly may ease Seair’s revenue losses

So despite the drop in passenger traffic in the first five months of the year, Zapanta said its revenues only dipped by 18 percent. “At the onset of 2009, while the other airlines continued to bleed, Seair has stopped the bleeding. We are happy to even have just a slim margin for the whole, but with the new development in Caticlan, we will have to revisit the plans for the rest of the year.” (Click Caticlan monopoly for the rest.)

(Blogger's note: In the statement, "Lean, mean and small is our aim through the current business climate we are experiencing, and awaiting opportunities as they come to assess how we move," the quote was attributed by our editor to Seair president Avelino Zapanta, but actually it was said by Seair co-founder and director Nikos Gitsis. Apologies to both gentlemen.)

(Boracay-bound passengers board a Seair DO-328 for a flight to Caticlan.)

Boracay guests rue longer travel time, shorter vacation

THE new runway configuration implemented at the Caticlan Airport in Aklan is already reaping some opposition from resort owners on Boracay Island.

The Department of Tourism (DOT) has promised to look into concerns of tourists to the resort island famous the world over for its long white beach.

In an e-mail, Nenette Graf, owner of Boracay Beach Resort and former president of the Boracay Foundation Inc., the association of resort owners on the island, said: “Our guests are starting to complain because their vacation is now short of half a day because of the travel time to Kalibo.”

As president of the Boracay Windsport Association, Graf said the Civil Aviation Authority of the Philippines (CAAP) rule particularly impacts on those guests coming from Hong Kong on the weekend to windsurf and kitesurf during the current habagat (southwest monsoon) season.

(Photo from Boracay-budgettravel-tips)
“Before, they can still enjoy three hours of kiting before sunset on their first day, or windsurfing if they leave Hong Kong in the morning. Now it is not possible with three to four hours travel time from Manila to Boracay, or more if domestic flights are delayed. Like [yesterday], the guests arrived in Manila at 11:30 a.m. and [were] supposed to fly at 1:30 p.m. to Caticlan with Cebu Pacific, only to be told that their flight is diverted to Kalibo, and the flight will be delayed by an hour-and-a-half. They arrived at 6:30 p.m. in the resort. They traveled for one day and they will go back on Monday via Kalibo again. They complained, and were given a free ticket valid for one year, but I doubt if they will come for the weekend again,” she explained.

Usually, if traveling to Manila via Caticlan, say on a 12 p.m. flight, passengers only have to check out of their resorts and leave Boracay by 10:45 a.m. to make the flight. If traveling via Kalibo, however, guests have to make sure they leave Boracay by 8 a.m.

Edd Fuentes, owner of the Sun Villa resorts also said his guests have been complaining of the inconvenience of traveling via Kalibo. “They’ve been so used to landing in Caticlan which is so near Boracay, just 15 minutes away by boat. They think Kalibo is too far, and now that’s it’s raining, the travel time is slower and longer.”

He added that the problem is even if his guests want to transfer to Seair, which is the only carrier flying to Caticlan, they’re unable to do so “because its flights are limited, considering it’s the low season. I, too have been trying to get a booking with Seair for my trip this Saturday and I’ve been told that all flights are already fully booked. So my guests may not have a choice but to still fly via Kalibo.”

Guests have also started complaining of the confusion in the major carriers’ check-in procedures owing to their pullout from Caticlan.

Gina Policarpio, a housewife on the PAL Express PR 324 return flight to Manila on Monday back to Manila told BusinessMirror that her family was told by the carrier to check into Caticlan “and we will just pick up our bags in Manila. They even told us not to worry about it.”

But when their group arrived in Kalibo, she said the PAL Express counter told them to get their bags and check these again at the counter. “Why were we told to check in Caticlan if we will check in again at Kalibo anyway? Ang gulo nila.”

Meanwhile, Tourism Secretary Joseph “Ace” Durano expressed concern over the new CAAP ruling on Caticlan’s runway configuration. He promised to look into ways for the Boracay guests to keep flying into Caticlan without compromising their safety.

(The 70-km road from Kalibo, right, to Caticlan. Photo from Travelsmart.net)
The CAAP’s ruling effectively shortened the takeoff and landing distance for planes in Caticlan, forcing major carriers like Philippine Airlines and Cebu Pacific to cancel their routes there. They now fly Boracay guests via Kalibo and are currently footing the costs of transferring passengers to Caticlan. Only Southeast Asian Airlines continues to fly to Caticlan.

In a text message over the weekend, Durano told the BusinessMirror: “We are studying alternative policies now that we can propose to CAAP, policies that ensure safety of flights to and from Caticlan without unnecessarily hampering passenger traffic.”

He declined to disclose what these alternatives are pending their finalization.

Department of Tourism Western Visayas Director Edwin Trompeta earlier expressed confidence that Boracay would still see continued strong tourist arrivals despite the pullout of major carriers from Caticlan.

“There is no major impact because the number of flights of these airlines to Kalibo are the same number of flights before the CAAP measures were imposed.”

In the first half of the year, tourist arrivals in Boracay grew by 6 percent to 383,313 from the 362,228 registered in the same period in 2008.

Since Zest Air’s second accident on June 25 involving its China-made MA60 plane—the first accident being in January 2009—the CAAP had decided to reassess the runway configuration and landing/takeoff procedures at the Caticlan Airport.

Most analysts noted that due to the larger size of their planes, PAL, Cebu Pacific and Zest Air are unable to fly into Caticlan with the shorter runway, especially during the southwest monsoon, when an aircraft is buffeted by strong winds.

Most airlines agree that the permanent solution to the Caticlan Airport is to extend the runway.

In 2007 officials of CEB, then Asian Spirit, and PAL had already discussed funding the runway extension, but nothing came out of it.

On June 22 the Department of Transportation and Communications signed a build-operate-and-transfer (BOT) agreement with a consortium led by McDonald’s Philippines franchise holder George Yang which would upgrade the Caticlan Airport to international standards.

The improvement of the airport, projected to cost some P2.5 billion, will be shouldered entirely by the Caticlan International Airport Development Corp.

Under the terms of the BOT, the company has up to seven years to build and expand the airport, and 25 years to operate the facilities, before it is eventually turned over to the government.

The upgrade includes the extension of the runways, which would allow larger planes to use the airport.

Attached to the project is a commercial component allowing Akean Resorts Corp., owned by investors led by Francisco Alba, former ambassador to the Vatican, to develop the 16-hectare area beside the Caticlan terminal into a hub for hotels, resorts and shops. “Akean” is the old name of Aklan.

The government allows investors in pioneering tourism projects to avail themselves of duty-free importation of capital equipment and income-tax holidays up to five years.

The upgrade of the Caticlan airport has been dubbed as the first-ever privatization of an airport in the country.

(Blogger's Note: This is the unabridged version of my story on how Boracay guests are reacting to the new runway configuration in Caticlan. The original was published in BusinessMirror's Perspective, July 14, 2009.)

Cebu Pac cancels Caticlan route*

(Kiteboarding in Boracay during the habagat season)
THE Department of Tourism sees tourist arrivals in Boracay to remain strong despite the pullout of major carriers from the Caticlan airport.

This developed as Cebu Pacific (CEB), the aviation concern of the Gokongwei-led JG Summit Holdings Inc., has confirmed that it too had withdrawn from its Caticlan route as of Thursday morning.

This is a result of a new order by the recently-formed Civil Aviation Authority of the Philippines, implementing a long-ignored rule on “one runway-take off, one runway-landing” procedure in the main runway of said provincial airport, effectively shortening the runway maneuverability of most carriers.

In a press statement released at 1:15 p.m. Thursday, CEB president Lance Gokongwei said: “CAAP has designated Caticlan, for the time being, as a one-way airport for all carriers: takeoff should be towards the sea and landing in the opposite direction. A technical re-definition also in effect shortens the runway, despite its actual length.

“We have therefore decided to divert all Caticlan flights to Kalibo instead and from there bus all our Boracay-bound passengers [to Caticlan] at no extra cost,” he added.

While CEB spokesman RG Orense told this reporter Wednesday night that the carrier’s first two flights on Thursday would land in Caticlan as scheduled, apparently these two were also diverted to Kalibo. “[Both flights] landed in Kalibo. The instructions [to the pilots] were given early [yesterday morning],” Orense said.

The carrier said more than 60,000 booked passengers will be affected by the cancellation of its Caticlan route.

(Cebu Pacific President and CEO Lance Gokongwei)

Caticlan is the gateway to the resort island of Boracay, considered a “bread-and-butter” route in terms of domestic destinations by most major carriers.

Yesterday, Philippine Airlines also pulled its Caticlan flights and transferred them to Kalibo. In the meantime, PAL said it will shoulder the land-transfer expense of passengers who had booked Caticlan flights. But Francisco Yngente, vice president for airport services said the cost of the transfer, however, will already be tucked into the cost of the PAL ticket in future bookings.

Passengers interviewed by this reporter who originally booked their flights to Caticlan and flew Thursday morning said PAL customer service called them Wednesday afternoon, informing them of the switch in the landing destination.

Nikka A. Policarpio, a marketing consultant, who rode PR 037 which left Manila at 6:10 a.m. Thursday, said “our transfer was organized. We were provided a Starex van to ferry us to Caticlan from Kalibo. And the trip was alright, short, about an hour-and-a-half only.”

As a result of the CAAP order, only Southeast Asian Airlines, because of the smaller size of its planes, will be able to fly into Caticlan.

The Caticlan airport’s new runway configuration was announced Wednesday in a meeting between CAAP and the three major carriers – PAL, CEB, and Seair.

Sources said Zest Airways, whose plane overshot the Caticlan runway on June 25 and caused the CAAP to review the airport procedures, did not attend the meeting which adjourned at 4 p.m. Since its June 25 accident, the second since January when its plane undershot the runway, Zest Air already closed its Caticlan route.

Meanwhile, Edwin Trompeta, regional director of the DOT region 6 (Western Visayas) expressed confidence that the pullout of the carriers from Caticlan will not affect tourist arrivals in Boracay. “There is no major impact because the number of flights to Kalibo of these airlines are the same number of flights before the CAAP measures were imposed.”

But he admitted that some passengers may be “inconvenienced” because the land trip from Kalibo to Caticlan take an hour and half, before the 15-minute pump boat ride from the Caticlan jetty port to Boracay. “Plus it could add up to the cost of the airfare and their tour package because of the transfers,” he said.

Trompeta said ultimately, the diversion of the flights to Kalibo by these major carriers, “will be good for our visitors because we’re concerned for their safety. These carriers are now using bigger aircraft and considering the length of the runway and it now being habagat (southwest monsoon) season where winds from the southwest are coming in, we’re a little bit concerned with the safety of the passengers.”

The tourism official intimated that the CAAP measure “could be temporary” until the amihan season (northeast winds) starts in October. The amihan season usually last until May or June, allowing the carriers to use runway 06, which is the approach from the sea. “I think this is a temporary arrangement. But the final decision is with the CAAP.” At present, all carriers have been using runway 24.

Still, he explained that even before the CAAP ruling, “those planes were not filled to capacity [because of the difficulty in the landing and takeoff considering the short runway]. Most of them incurred penalties for not loading their planes.”

According to data from the DOT, tourist arrivals in Boracay in the first half of 2009, grew by 6 percent to 383,313 from the 362,228 registered in the same period in 2008.

Trompeta said the bulk of the tourists continue to be Filipinos, accounting for 71 percent or 271,498 of total arrivals, while foreigners numbered 96,102. Balikbayans or returning Filipinos totaled 16,213.

(The pristine white sands of Boracay make it one of the best beaches in the world according to international travel magazines.)

Of the foreigners, arrivals from Korea were the largest at 34,818 in the six-month period; followed by China at 11,584; Taiwan at 8,074; and Americans at 7,130.

Total tourism receipts for the period reached P7.06 billion.

The DOT official said Boracay tourism arrivals continue to be “strong” despite the global economic crisis and the (A)H1N1 global flu outbreak. Before the H1N1 outbreak, DOT projected tourist arrivals in the island to increase by 10 percent to 697,799 from the 2008 arrivals of 634,363. Last year, the island brought in total tourism receipts amounting to P11.66 billion.

In a press statement, CEB president Gokongwei said: “We continue to work closely with our industry partner, the CAAP, to find a speedy resolution, to these airport issues, to allow Cebu Pacific to re-instate flights to Caticlan.

He added that Boracay continues to be one of the country’s most important tourism destinations. “CEB’s low fare service has been integral to the growth and development of the island’s tourism industry and has increased its accessibility to both local and foreign tourists.”

CEB said it has been operating direct flights to Caticlan since February 29, 2008 and has since carried “over 340,000 passengers.” Its schedule, especially during the peak summer season, reached as high as 15 round-trip flights daily to Caticlan.

(*This was my original piece for BusinessMirror but due to space constraints, was folded in a general story on the issue along with other reporters' stories.)

Carriers pull out of Caticlan

"STARTING Thursday (July 9, 2009), major carriers are expected to discontinue flights to Caticlan, the gateway to the resort island of Boracay, in anticipation of a government order aimed at implementing a long-ignored rule on a one-takeoff and one-landing procedure.

Sources who attended a hearing between airlines and the Civil Aviation Authority of the Philippines (CAAP) on Wednesday said the new order will virtually leave only one carrier, Southeast Asian Airlines, plying the route." (Click here for the rest of the story. Apologies for the alarmist headline in the paper. Thanks!)

(Only Seair will be left flying to Caticlan, giving it a virtual monopoly over schedules and airfares. Let's pray it doesn't take advantage of the situation and unnecessarily jack up its airfares.)

Cebu Pacific causes airport bedlam

UPDATE (11 am): I got a text message from my friend Miggy who's supposed to fly to Cebu today w/ her hubby for the weekend. But guess what? All Cebu Pacific flights are delayed today because their computers melted down! The domestic terminal is just in total chaos!

I RECEIVED a text message close to 2 a.m. today from my fab ex-editor who's now based in Singapore. James was mightily pissed that he got stuck at the airport on the way home to Manila because Cebu Pacific had apparently overbooked its flight. He and 49 others. What's more, the ground crew seemed to have all disappeared with no promise of even a light snack or anything to make the unlucky passengers feel comfortable while waiting for the next flight.

UPDATE: According to James, they were just given another round-trip voucher and promised seats in tonight's flight to Manila. I guess that means another 50 booked passengers in tonight's flight will get bumped off again. Common airline practice is when a carrier overbooks or for some reason, can't make its scheduled flight, it should book its passengers on the next available flight in another airline. Why didn't Cebu Pac do this? Sobrang pagtitipid naman 'yan Papa Lance! Shouldn't customer service come first?

What's more, Cebu Pac's external PR Gatchie Reyes told James that they were told by Cebu Pac that the 50 bumped off passengers last night were booked in a hotel. O da va, nag-creative writing course pa ang mga lokah?!

This is probably the Nth time I have heard this complaint about Cebu Pac. Last year, galpal Francine also got stuck for more than five hours at the Mactan International Airport after her flight to Manila was super-delayed for undisclosed reasons. She was at airport by 5 pm but flew past 10 pm. Buti nalang pinakain sila ng isang hita ng Jollibee chickenjoy. (We learned later that one plane had engine trouble thus necessitating a scramble for aircraft plying other routes and trying to catch up with scheduled departures elsewhere. But like, this is also the Nth time I've heard this reason.)

So what's up with Cebu Pac really? It boasts of new planes and yet can't keep a simple promise of flying out all their booked passengers on time? I've been covering the business beat for the longest time, especially the travel/aviation beat, I still don't understand why airlines have to overbook their flights. Surely Cebu Pac's reservations people can see in their computers if they've reached the seating limit already for their flights? And at this time of the year, the peak of the summer season, there are just too many travelers going on vacation so it really is imperative for them to make their flights. I would understand overbooking during the lean season when flights are no longer that much in demand.

And these cases of overbooking and delayed departures are happening everywhere Cebu Pac flies. Over in Caticlan, the joke is Cebu Pac is virtually using Asian Spirit as its GSA (general service agent) because they always pass on passengers to the latter (well, so much the better for AS I suppose. This is extra income for them.) But duh, why boast about now flying to the gateway of Boracay when it can't even deliver the minimum service required of a carrier?

Sure Cebu Pac can say that passengers choose the carrier because they want to fly cheap, sans any frills. So magtiis kayo! But I think no matter how cheap or pricey a passenger's ticket is, he is supposed to be accorded some amount of courtesy and respect as a paying consumer. Porke't cheap fare, cheap service din? Ang cheap mo naman Papa Lance! Kya nga ba I don't crush you anymore e.

(Disclosure: The last time I rode a Cebu Pac flight was three years ago. Nothing untoward happened then. It's plane was old, but I left and arrived on time. No incident. Which is why it behooves me that despite its massive refleeting, the airline's service has just deteriorated instead of improved. Or shouldn't there be any correlation at all between the two?)

Travel news: Bye, bye Palau

(I now wish I had pursued our gang's plan to visit Palau again this year. Sad to see the Asian Spirit flight go which was really a very convenient way, not to mention cheaper way, for tourists to to travel to Palau. My report on this development below:)

Asian Spirit drops Koror flights — again — for now
Marianas Business Journal, Oct. 15, 2007

Rainbows are commonplace in Palau. The rock island across my hotel room balcony during my visit to Palau in 2006.

MANILA, Philippines — After relaunching the route in May, Asian Spirit will be dropping its flights from Koror to Cebu, effective Monday, Nov. 5.

In a phone interview, Jack Po, executive vice president of Asian Spirit; told the Journal, “While it saddens me to confirm this, yes, we are suspending our flights because of the realignment in our business plans. There are increasing demands by passengers in the Philippines for flights to our key service areas such as Caticlan, Aklan, which we have to meet. However, we hope to return to Koror soon when conditions are more ideal.”

Asian Spirit, he said, is preparing to “engage in a major battle” with the larger-capitalized airlines in the Philippines, which are going to fly to Caticlan, the gateway to Boracay Island, Aklan. “We want to focus on our turf, which we had developed when no one was flying to the destination yet.” The Manila-Caticlan service is often called the “bread and butter” route of Asian Spirit, which helps subsidize its flights to 15 other destinations. The other destinations are considered vital in terms of public welfare but are typically low revenue earners for the airline because of unstable passenger loads.

The news of the suspension caught most tourism-related companies in Palau by surprise. It was only in September that Asian Spirit hosted a familiarization tour in Cebu for Palau government officials, businessmen and media.

Reacting to the development, Sam Scott, president of Palau Sea Ventures Inc. and Sam’s Tours; said, “This is very sad and unfortunate news that is very disappointing, to say the least. Sam’s Tours has been working very hard with [Asian Spirit] and hosted many [familiarization tours], including the most recent one from Cebu.” On June 16, Sam’s Tours co-hosted a familiarization tour with the airline and other Palau tourism and business groups for about 60 visitors from Cebu, which included dive center owners, travel agents, media, airline staff, business delegates and other dignitaries.

“The repercussions will be enormous and the tourism industry as a whole in Palau will suffer for some time. I can only hope that we will have a chance to see Asian Spirit back in the skies soon,” Scott said. He added that the airline “indicated [the flight’s suspension] was due to maintenance, but I have a hard time believing that when they indicated no start-back-up date.”

Interviewed in Manila, Surangel Samuel Whipps Jr., whose family co-owns Palau Micronesia Air — Asian Spirit’s partner in Koror — told the Journal, “You know, Asian Spirit has been very good to Palau. They’ve been able to provide competition [for other carriers] which is good for Palau because there have been a lot of visitors. Unfortunately, the number of people traveling [the Cebu-Koror route] was not enough. So we’re looking at how to market it. Maybe it was our fault — the marketing was not ready for Cebu. We expected more people, but the tourism connections were not there yet.” The Whipps family’s Surangel & Sons acted as the general service agent for the Philippine carrier.

Palauans welcomed the entry of Asian Spirit in Koror because it helped bring down the cost of airfare to the Philippines, where a number of them have business dealings, go shopping, and receive medical treatment. Roundtrip fare from Koror to Cebu cost $330 per person, the same rate now offered by Continental Air Micronesia, which flies Koror to Manila. When it was the only airline serving the Koror-Manila route, Continental’s airfare reached as high as $600 per person especially during holidays. “I just checked with Continental because we wanted to come here in December and their rate’s already $510,” Whipps said. “It’s interesting what Continental will do now that they have their monopoly back,” he added.

The Palau businessman said for now, there are no plans for PMAir to hook up with other international carriers serving the Pacific, such as Virgin Blue and Pacific Blue, of British tycoon Richard Branson, president of Virgin Blue Holdings Ltd. “We’re always open to other options, but Asian Spirit was willing to take a risk to fly to Palau. They said this was not the end. They just need to refocus and they will be back.”

Sam Scott of Palau Sea Ventures Inc. expresses disappointment over suspension of Asian Spirit's service in Koror. (Photo by Peter Marquez)

Sam’s Tours, together with other members of the Philippine-Micronesia Alliance, had expressed optimism about the three times weekly Koror-Cebu-Koror flights because it would boost the group’s chances of marketing the Philippines and Palau as scuba diving destinations to more Asian markets. The tour agency had barely recovered from the cancellation of the Davao-Koror service of the airline, but Scott said in September, “We are very excited about the Cebu-Palau route of Asian Spirit.... This will definitely be a big winner for us here in Palau.”

Whipps added the Koror-Cebu route had “a lot of potential. Palau was going to tie up with Cebu Doctors Hospital and two other hospitals in Cebu. It’s much closer and with the flight frequencies, it would’ve been better for our patients. Also there were a lot of business opportunities...people are so used to coming to Manila, they don’t think of Cebu. As one Cebu businessman told me, the minute you step out of the plane, you don’t need to go to Manila anymore because you can find everything in Cebu.” Cebu is the second major urban destination in the country after Manila, the capital.

For its part, Asian Spirit is expected to go head-to-head with larger and more profitable airlines to protect its Caticlan route. Air Philippines, the budget carrier of Filipino-Chinese tycoon Lucio Tan, who also owns Philippine Airlines, will be flying to Caticlan by Dec. 15 using three to six Bombardier Q300 50-seater turboprops; Cebu Pacific, owned by JG Summit Holdings Inc., of food and beverage magnate John Gokongwei, will be flying to Caticlan by February 2008 using two Avions de Transport Regional 72-500s turboprops initially, gradually increasing to 14 by 2013.

Asian Spirit plans to bring in two more British Aerospace 146-100s, which are 86-seaters, to increase their jet service to Caticlan to 16 flights a day from the current six. Along with its turboprop service, the flights are expected to rise to as many as 25 a day during the peak seasons of summer and Christmas. MBJ

Personal Fortune: Back Onboard

PLUCKED FROM RETIREMENT, SEAIR CHIEF AVELINO ZAPANTA IS READY TO FLY AGAIN

By Ma. Stella F. Arnaldo
Special to BusinessMirror

MY favorite memory of Avelino L. Zapanta, recently appointed president and chief executive officer of Southeast Asian Airlines or Seair, took place in Guam. He was still Philippine Airlines (PAL) president then, dressed casually in shorts and a shirt, sneakers, and leaning on the side of our tourist bus, which had broken down while touring the island.

We were a gangly bunch of catty journalists on a familiarization tour as part of PAL’s reinstatement of its service to the island. Despite the heat and long time it took for us to get picked up by another bus, we were hardly irritated as “ALZ” went around, entertaining us with his stories, and gamely posing for photos with us.

It is exactly Zapanta’s personal touch, or people skills, that helped him implement massive cost-cutting measures meant to keep PAL afloat. It was a time when relations between labor and management were strained. Groaning under a weight of debt, which ballooned due to the Asian financial crisis in 1997, as well as a pilots’ strike, PAL briefly shut down in September 1998.

Appointed president in 1999, he oversaw the rehabilitation of the flag carrier, which finally broke even in March 2000 for the first time in six years. Zapanta retired in August 2004 confident that the airline was in better shape to carry out its refleeting and expansion.

In the two years he had been away from the limelight, Zapanta wrote a book on the airline industry, 100 Years of Philippine Aviation, and is currently working on another book on the same topic, this time with a global perspective, for publication hopefully by next year.

He has also been teaching airline management classes at the University of the Philippines Asian Institute of Tourism and the Philippine State College of Aeronautics three times a week, his students benefiting from his real-life experiences of working in the industry for 40 years. (He joined PAL in 1966, but worked also at Pacific East Asian Cargo for a time. “Seair is actually my third airline already,” he says.)

The respite gave him more time to spend with his wife of over 43 years, Nicole Lavides, his six grown-up children (Titus, Tugaris, John Rado, Avelino Jr., Ma. Salome, and Ma. Silvana), and his caboodle of 13 “beautiful, handsome, pretty, nice and sweet” grandchildren—which begs the question, why leave the comforts of retirement?

Over a hearty Japanese dinner, we had a freewheeling conversation with Zapanta, who discussed his return to where “the action” is, Seair’s expansion, several aviation issues, and on being—gasp!— a videoke king.

What made you return to the industry?

Of course, I thought the pace of life I’d create when I retired was something I would very much desire. And indeed it was a very easy way of life, out of the rat race and all, not knowing after two years, I kind of missed the action. Because at this age, in almost perfect health, and with the [airline] industry growing, multiplying in leaps and bounds, I was kind of attracted to go back. Fortunately here is Seair on the verge of expansion. And they were looking for an honest-to-goodness president for the airline and so somehow, a headhunter got to me, and I readily accepted it.

Did your family support your decision?

All the way! Perhaps they saw that I was kind of missing the action. Sila mismo naninibago na. They were used to my being out of the house all day ’til evening. Then after retirement, every day I was just at home writing. And then I would be with them at meal times.

Did you ask permission from PAL chairman Lucio Tan before accepting the job at Seair?

No, only from Jimmy [Bautista, PAL president], because I was a consultant of PAL until last month so I had to tell him. As a matter of fact, when I submitted my biodata to the headhunter, I told Jimmy: “There’s a likelihood I might be taken in by another local airline.” I needed to be back in action and obviously I cannot go back to PAL. He said, “Okay lang, pare, ayos lang.” Kumpare ko naman si Jimmy.

I can’t say for sure what Mr. Tan feels, but I think it’s okay. Our routes are different from one another. We don’t duplicate a single air service of Philippine Airlines today, but I cannot tell for the next month and the month after.

Whoa! PAL watch out? What particular experience are you going to bring from PAL that will be useful in Seair?

Everything. All my 38 years of experience. The experience I’ve had will be useful at this particular stage in Seair’s growth. The challenge is how I can help convert Seair into a major player in the industry.

I think it’s going to work out well because all I have to do is to work with Iren [Dornier, Seair founder] and Nikos [Gitsis, cofounder], and they’re both good and very nice guys. Wala akong problema.

What steps are you going to take to become a major market player?

We will be coming up with specific brand products that Seair will eventually market out there. Of course, the current operation is a very successful product brand…these are leisure air sectors that are being operated to the most exotic tourist destinations. We fly to Baler [Aurora]; Clark; Manila; Busuanga, Taytay, Puerto Princesa, El Nido, Cuyo islands—five points in Palawan—and Camiguin. I haven’t even been to some of those places! From Cebu, we fly to Cotobato City, Zamboanga City, then Tawi-Tawi and Jolo. We fly seasonally to Batanes, Sandakan [North Borneo] and Siargao.

Then we’re opening another product line—a partnership between Seair and Tiger Airways. It’s our low-cost operation and for this, we will be acquiring two Airbus 320s. Initially, we’re planning to operate it, from Clark, to Singapore, Macau, Cebu and Davao. Then we’re looking at other points in the region for eventual expansion: Inchon or Busan in Korea, Okinawa [Japan], Kaoshiung in Taiwan.

Can’t you offer these regional flights from Manila instead of Clark?

We are helping in the development and progress of the DMIA [Diosdado Macapagal International Airport]. Seair is the first and only Philippine carrier based in Clark, Pampanga. We are placing our bets on Clark. That will be the eventual gateway.

But that Clark gateway plan has been in the works since President Ramos’ time!

Events will catch up in Manila because there is no room for expansion there. An A380 cannot operate in Naia [Ninoy Aquino International Airport] because of its very limited facility. It’s already been established that when an A380 lands and takes off from Naia runway 0624, nobody can use the taxiway. If there’s an aircraft on the taxiway there’s going to be a wing tip collision! At the DMIA there is unlimited space because it used to be a military airbase. There are two parallel world-class runways there, which can be independently used.

When are you acquiring the A320s?

As early as February 2007. It’s a lease arrangement with Tiger Airways [a subsidiary of Singapore Airlines]. We chose Tiger as a product because the brand name is already established and has a high name recall. So marketing-wise it’s got all the advantage. Basically it’s an interlining arrangement, we feed traffic to one another. There will be an additional 18 pilots and 36 flight attendants earmarked for the A320.

How do you describe the tourism market now? Are the tourists more budget conscious?

No matter what you do, no matter what generation, the reality of market segmentation is there—meaning that there will be always those on the high-end and on the low-end. Those on the high-end, no matter how you bring your price, they would want to be identified as the best, the highest quality, and they’re willing to pay the price. The reality is always there. And of course, there are those who are price-conscious. And again that’s a reality.

So where is Seair positioning itself?

We have the high-end product through the Seair special domestic connections. We are coming up with the Tiger brand for the low-cost low fare, no-frills operation. We’re addressing the entire range of the market. Not a bad marketing strategy huh?

Of course they will help us in marketing our flights, and we will also use their distribution system, to enhance our sales.

Do you think Cebu Pacific’s Go Fares have unduly disrupted the pricing structure of the market? Some airlines say those low fares are unsustainable without any subsidies from Cebu Pac’s parent firm.

No, it has a positive effect as far as the industry is concerned. When Cebu Pacific started in 1994, Philippine Airlines was prepared for it of course. Ang totoo, tuwang-tuwa kami sa kanila. They were expanding the market because they were capturing the surface travelers from the ships and buses who were starting to fly on their low fares. So our philosophy then, “let them do their job,” because those markets they were creating will eventually develop an appetite for the higher service. And eventually they’ll be flying PAL, they’ll be flying the business class. Teka, why am I talking about PAL? I’m supposed to be talking about Seair!

Old habits die hard? So what’s the biggest challenge of the local airline industry?

The biggest challenge will still be the shortage of mission-critical skills because the availability of pilots and mechanics in relation to the number of aircraft that has been purchased by the airlines didn’t dovetail. Hundreds of aircraft have been added and yet no pilots and mechanics have been earmarked for those.

The low-cost carriers aggravated that problem because before, airlines would buy big aircraft so the demand for pilots were not that huge. Now smaller planes are being bought, and by the hundreds. So the requirements for pilots and mechanics have multiplied.

Some carriers are complaining that they are losing their pilots to the higher-paying foreign airlines. How are you going to deal with that issue?

I heard PAL has already increased its pilots’ salaries. We will go along with the industry trend, which is to calibrate all the salary levels, kasi ’di maiwasan ’yan. And of course, they will have to be made to appreciate the value of their own airline by fostering a well-knit close, almost family-like relationships. We will have constant dialogue.

Is Seair considering an employees’ stocks option plan as way to make them “appreciate” the airline?

That can also be considered, because part of the plan of the existing stockholders [Dornier, Gitsis and Tomas B. Lopez] is to expand the capital base of the airline for future expansion, so there will be more Filipino investors that will be attracted into the airline.

Are you considering an initial public offering to widen the Filipino ownership of the airline?

That’s always a possibility but we will have to be able to register attractive levels of returns for three consecutive years. So we will have to wait for that time. But we will work very hard in order to achieve that. [Revenues are projected to grow to P1 billion by yearend from P600 million in 2005.]

What’s your timetable to achieve this continued profitability?

Every year there will be gradual growth and development. The two A320s can virtually double the capacity of Seair. Remember, it’s a 180-seater aircraft against the 32-seater Dornier 328 and 19-seater LET-410 aircraft.

We will add more domestic routes. When we operate the A320 for the Manila-Cebu route, we will upgrade the Dornier 328 and introduce a linkage between Palawan and Iloilo. There is a high familial affinity between both provinces as many Ilonggos migrated to Palawan.

Seair has been operating for 11 years, since 1995. This year we will end up with a positive income.

Do you have any plans to change your turboprop fleet?

No. How can we change them when the domestic airports have not caught up with the march of technology and aviation? We have 13 aircraft—nine LET 410s, and four Dornier 328s. They are modern aircraft.

Some politicians in Pampanga are pushing open skies in Clark to supposedly bring in more tourists. Has your stand on a liberalized aviation policy changed from when you were at PAL?

The modern trend is to liberalize in order to really help improve our tourism even the economy. It cannot be denied that it’s been accepted globally that tourism is the biggest industry in the world today because of its multiplier effect. And those who have liberalized their skies have become successful, like Singapore, for example.

But if you have open skies, there must be reciprocity. We have to get the same benefits in return. Di naman makikinabang ang Seair doon kung i-open ang Philippines, then the same privilege is not available to us. Seair is on the verge of expansion, where are we going to fly?

So will you keep on teaching?

I intend to finish the semester [until April]. I have about 80 students. Perhaps I will just maintain one subject because I will lose a lot of time. But it looks like the attitude of Seair’s owners is for me to continue with my teaching because it helps in the promotion of the airline. So I’ll play it by ear.

How do you spend your leisure time?

I don’t have any except for that one hour of brisk walking and calisthenics every morning. I’ve lost 30 pounds—no more beer belly. Basically I take out my wife on Sundays, to church, then with some two or three young kids, we go to the mall, we eat or watch a movie.

Every now and then, we have parties on the third floor of our home in Taytay, about 20 minutes away from Makati when there’s no traffic. On the fourth floor is my gym. But on the third floor is where we get together especially when someone has a birthday. We have food, beer and sing on the videoke.

Really? What do you like to sing?

Madalas kong banatan simple lang, ’yung “A Certain Smile,” “Portrait of My Love,” “Perhaps Love”…. Every now and then, nagma-“My Way” din. Pag hawak ko na mikropono, nobody would dare take it away from me. Hahaha.

(Personal Fortune is a magazine published every Friday by the BusinessMirror. Photos by Nonie Reyes, BusinessMirror)