China tourist booking cancellations extend until Jan. 2013

MANILA, Philippines – It may be worse than we thought. In the latest development seen as part of the continuing fallout from the maritime spat between Manila and Beijing over Scarborough Shoal, cancellations by Chinese tourists on trips to the Philippines have already reached until January 2013, according to a regional tourism official.

In a text message to InterAksyon.com, Atty. Helen Catalbas, officer-in-charge for Region 6 (Western Visayas) of the Department of Tourism said: “as of 4 p.m. (on May 14), 163 AAA and AA rooms have reported cancellations of Chinese bookings and one AAA resort have 230 cancelled room nights from July 2012-January 2013.”

She declined to estimate how large a dent these cancellations would have on the overall tourist arrivals in the island, but said her office was still monitoring the situation in Boracay, one of the country’s biggest tourism draws because of its vaunted lovely beaches. (Click InterAksyon.com for the rest. Originally published on May 16, 2012.)

If you're going out of town

A LOT of people are making tracks out of the city, with a number of them going up north to Clark, Subic, and Tarlac for the Holy Weekend. A few still are unfamiliar traversing the new Subic-Clark-Tarlac Expressway so, in the interest of public service, I'm posting a map courtesy of the BCDA web site.

You may click and print it:


Here's the corresponding fare matrix as well. Try to have the exact fare on hand to speed up your time at the toll booths. You may click and print as well for your guidance.


Drive safely people. Enjoy yourselves but pls. remember what this entire week is really about.

An advanced Happy Easter to all!

Seair revives talks with investors

(I've been on vacation so this is another lazy post...a story I wrote for BusinessMirror for its May 9/10 issue.)

SOUTHEAST Asian Airlines (Seair) is reviving talks with international investors following the rejection of a purchase offer by the group of industrialist Alfredo M. Yao. Yao is the founder of Zest-O Corp.

A highly-placed source from the local carrier told BusinessMirror “these talks were stalled when we thought we were already going to have a deal with Yao by June. So we’re just reviving them.”

The source declined to identify the foreign groups only saying that these were “from Singapore and Brunei,” for possible “capital infusion” into the local carrier.

Seair owners headed by co-founders Iren Dornier, Nikos Gitsis and the Filipino group led by marketing guru Tomas B. Lopez Jr., declined the offer by Yao to purchase their shares for $2 million (or P84.63 million). This was $1.75 million (P74 million) lower than the “original consensus price” of $3.75 million (P159 million), before Yao’s group conducted due diligence on the airline.

Yao said he still intends to pursue the purchase of the carrier.

Sources familiar with the matter said the $2-million offered by Yao’s group will only pay for the cost of the brand and takeover of employees. The group does not intend to buy the 10 aircraft Seair is currently leasing from Dornier’s Aviation Enterprise Inc. (AEI) and spare parts. Yao’s group will also not cover the debts of the carrier including the payables on the aircraft leases to AEI. “All of the liabilities of Seair will have to be paid by Gitsis [and company],” the sources added.

In the proposed share purchase agreement, “[Yao’s group] will lease aircraft from AEI on a “power-by-the-hour” basis, the same sources added. This means that Yao’s group will pay only for the actual use of the leased aircraft, even if these are parked in the airline’s hangar. With this commitment to lease AEI’s planes, “it’s like the offer price is still the same as what we had initially discussed,” explained another source from the Yao group.

There is also a non-compete clause in the proposed share purchase agreement between Yao and Seair shareholders. This means that Dornier and Gitsis, who are both pilots and who currently own 40 percent of Seair, cannot put up another carrier to compete with Yao’s airline.

BusinessMirror sources observed that “this clause was not present in the initial agreement between Yao and Asian Spirit’s former owners.” Yao said he intends to merge Asian Spirit and Seair into one airline company.

Yao bought Asian Spirit for about P1 billion but turned over a check amounting to only P700 million because his group was taking over the debts and liabilities of the airline.

In an earlier interview, Gitsis said Seair was “open to all possibilities” in terms of investments either through capital infusion or selling the owners’ shares “lock, stock and barrel.”

“We’re still open to selling [even just the shares owned by the foreign group]. In the long run, the airline needs partners that can help in [our] growth, to keep us up with the growth opportunities that are still open in the market,” he said.

Referring specifically to the negotiations with Yao, Gitsis said: “If the need for capital and aircraft is the main motivator, [we] don’t want to sell out. Our hearts are in the company and we are more than willing to stay, and more than willing to work another 13 years. [Dornier and I] love this country and we no longer consider ourselves foreigners. On the other hand, everything has a price in business.”

He said the airline sees massive potential growth in local tourism “and we can contribute to that in many ways.” But he said he hoped the Civil Aeronautics Board (CAB) would allow the airline to do just that by approving its lease purchase agreement with Tiger Airways.

In January 2007, Seair signed a lease purchase agreement with Tiger Air, the low-cost carrier subsidiary of Singapore Airlines. The deal was for the lease of two Airbus 320s from the regional carrier which would enable Seair to fly to Singapore and Macau, as well as other Asian destinations. Local carriers have opposed the agreement saying the partnership would give fifth-freedom rights to Tiger Air, thereby allowing it to transport passengers to a second country and onwards to a third country.

Due to opposition by local carriers, the CAB has yet to approve the agreement, preventing Seair’s efforts to expand its routes to international destinations using the Clark International Airport as a regional hub.

“Tiger Air gave us a challenge. We thought we could live up to the challenge and we’re still optimistic that we can overcome that challenge,” said Gitsis. He admitted that the regional carrier has also expressed interest in buying into Seair, “but we [foreign shareholders] would have to sell out.”

- - - -

P.S. I flew to Caticlan and back to Manila over the weekend via Seair and noticed that the drinks served to passengers were made by Zest-O. Hmmm...

Seair ‘rejects’ Yao offer, but talks ‘active’

(Seair owners: Iren Dornier, Nikos Gitsis, and Tomas B. Lopez Jr. representing Filipino shareholders. Photos of Dornier/Gitsis from the Iren Dornier Project. Photo of Lopez from AIM.)


THE owners of Southeast Asian Airlines (Seair) said they have rejected the offer of industrialist Alfredo M. Yao to purchase the airline, but the fruit-juice king’s camp stressed the two sides are still “actively talking.”

A highly placed source in the carrier told the BusinessMirror: “The deal is off. The offer is $2 million. [It's] too low from the original consensus price [between the owners and Yao’s group].”

Contacted for comment, Yao said, “Their group and ours are still talking. Nick [Gitsis, co-founder and director of the carrier] is still in the States, so we haven’t spoken to each other.”

While Yao did not wish to confirm how much his group’s offer price was, the Seair source said the owners had agreed to sell their shares to Yao at $3.75 million (or roughly P158 million at P42.315 to the dollar).

The price only covers the cost of the airline brand and the takeover of the staff, but not the planes. The 10-plane fleet of Seair — composed of three Dornier 328s and seven LET-410s — are turboprops currently leased from Aviation Enterprise Inc., a company owned by Seair founder Iren Dornier.

The source added that the notice to formally reject the deal has already been transmitted to Yao’s group.

Yao is widely known for having developed the fruit-juice drinks under the Zest-O brand, now the largest-selling ready-to-drink fruit-juice brand in the country. His recent purchase of Asian Spirit boosts his interests in the tourism sector, where he also owns a hotel in Subic Bay. (See my profile interview of Yao in the blog entry below.)

Despite the rejection of Yao’s offer, the Seair source was confident that the airline would continue operating. “We have a good safety record. We are No. 1 in our market.” He added that Dornier will continue to infuse capital in the airline even if the local shareholders won’t.

Gitsis earlier said a deal with Yao’s group could be announced before the end of June. (See “Yao bucks tide, may buy 2nd airline,” BusinessMirror, April 14.) The two parties have been negotiating Seair’s purchase since July 2007.

(Industrialist Fred Yao)

Meanwhile, aviation analysts who requested anonymity said that with Yao’s recent purchase of Asian Spirit, he doesn’t need to purchase another carrier. “He has his own airline already, with its own staff and planes.

Both of them [Seair and Asian Spirit] serve almost the same markets, so he [Yao] really doesn’t need another airline.” The analysts added that unlike Asian Spirit, Seair does not have a congressional franchise and is not a designated flag carrier.

A source in Yao’s group confirmed this. “Strictly speaking, we don’t need them [Seair]. It’s not imperative that we buy them. But we can learn from their expertise and benefit from their niche marketing.”

Yao has already successfully lured Seair’s operations manager, Eli Tabora, to join Asian Spirit, but is still keen on recruiting Avelino Zapanta, current president of Seair and former president of Philippine Airlines, to be head of a merged airline company. Yao’s group is also impressed with the marketing savvy of Patrick Tan, Seair’s vice president for commercial affairs.

Despite the rejection of the offer, a source in Yao’s group said the businessman is still pursuing his plan to buy Seair. “The upside for us buying Seair is, they have good people, and we can do single administration [of routes and ticketing], and let’s face it, they have a good reputation in the niche market they are serving. The downside to us, of course, is there is a cost to all of that.”

The source stressed that both groups are still “actively talking. There are just some areas of confusion [with regard to the offer price]. I think it just wasn’t explained to them very well why the offer is such. They may have interpreted it differently.”

While he declined to go into specifics, he noted that since Seair’s planes are not included in the purchase price, “why should we pay for the spare parts? But essentially, our offer to them is still the same.” Other sources said the carrier also has debts which are going to be taken over by Yao’s group.

This was essentially the same tactic Yao used in taking over Asian Spirit. While the purchase price for that carrier was P1 billion, the actual check turned over to its former owners was only about P700 million because of the debts and liabilities of the carrier that Yao’s group would be assuming.

As for Yao’s offer to Seair’s owners, the source said: “We didn’t offer an inordinately low price. I think we just have to explain to them how we came up with this figure.” The offer to purchase Seair for about $2 million (or P84.63 million) was made after Yao’s group completed its recent due diligence of the airline.

In an interview on February 13, Gitsis admitted to BusinessMirror the pinch the carrier has felt with the entry of larger carriers in its major routes: “We’re still the fastest flight to Boracay (Caticlan). We still have the most modern planes. But we have felt a reduction in revenues, and a softening in the market prices.”

The Manila-Caticlan route, a major revenue earner for Seair, is now being serviced by major carriers such as Philippine Airlines through its subsidiary PAL Express/Air Philippines, and Cebu Pacific. Current fares to Caticlan have dropped to about P588, one-way, excluding insurance, taxes and other surcharges.

The carrier’s plans to tie up with Tiger Airways so it could lease two planes from the regional airline to service more domestic points, and enable Seair to fly to Macau, Singapore and other regional routes from the Clark International Airport, have also been strongly opposed by other local carriers.

“We’ve had delays with the CAB (Civil Aeronautics Board) in trying to lease planes from Tiger Air to put in service in the Philippines. We have had no approval for that. It’s been a long process. We’re surprised why we’re getting this reaction from larger companies when we’re a small company,” Gitsis said of the other challenges Seair has had to overcome.

Dornier and Gitsis own 40 percent of Seair while the rest of the shares are owned by a Filipino group led by marketing guru Tomas B. Lopez Jr.

(My story on Seair was published on the front page of the BusinessMirror on May 6, 2008. Blog entry contains corrections with regards to the offer price.)

Great things are happening at Clark! (3)

Clark airport to be No. 1 gateway by 2010
MA. STELLA F. ARNALDO, GMANews.TV
02/21/2007 | 10:29 PM

CLARK, PAMPANGA - Clark International Airport Corp (CIAC)will spend P18.5 billion to make the Diosdado Macapagal International Airport (DMIA) a world-class logistics hub and prepare it to become the Philippines’ premier international gateway by 2010.

CIAC president and chief executive officer Victor Jose I. Luciano said construction would take three years, beginning late 2007.

By 2010, the Ninoy Aquino International Airport in Manila will have reached full capacity and international flights will be transferred to DMIA.

Of the P18.5 billion, P13.56 billion will be used for civil and architectural works, P125.54 million for navigational systems, P55.96 million for a meteorological facility, P704.82 million for airport lighting, P3.99 billion for airport utilities and P75.62 million for airport maintenance equipment.

As part of civil and architectural works, CIAC will build a larger passenger terminal (Terminal 2) next to the existing terminal for P2 billion.

(More at GMA News TV.)

Great things are happening at Clark! (2)

Clark airport expansion to cost P160M
MA. STELLA F. ARNALDO, GMANews.TV
02/20/2007 | 08:37 PM

CLARK, PAMPANGA – With the increasing influx of tourists into this special economic zone, the government will begin expanding the Diosdado Macapagal International Airport this year. The initial phase of the expansion is projected to cost P160 million.

Victor Jose I. Luciano, president and chief executive officer of the Clark International Airport Corp. said of the total cost, P68 million will be for the rehabilitation and expansion of the DMIA passenger terminal I alone. The rest of the amount will be for the purchase of modern equipment such as X-ray machines, baggage conveyor belts, etc.

Announcement of the rebidding schedule for the passenger terminal I will be made “before the end of February," he told GMANews.TV.

In the first bidding held last January 27, the winning bidder was not able to meet certain important requirements of the CIAC causing the government agency to declare the bidding a failure. He declined to reveal further details of the failed bidding.

This time, Luciano expressed confidence that the rebidding “will not fail as there are many bidders…. So far we have 10 (interested bidders) and they have good track records."

(More at GMANews TV. Photo of Chicos Luciano by Tetep Marasigan)

Great things are happening at Clark!

Clark sees investments worth P20B in 2007

STELLA ARNALDO, GMANews.TV
02/19/2007 | 07:54 PM

CLARK FREEPORT, Pampanga – The Clark Development Corp. expects P20 billion in investments this year following what the state-run corporation sees is the imminent restoration of the economic zone’s status as a free port.

CDC president and chief executive officer Levy Laus told reporters over the weekend that he was “extremely jubilant" over Congress’ endorsement of Clark’s special status because it restores incentives and makes it at par with the Subic Freeport.

Last February 1, a bicameral conference committee ratified the reconciled version of separate bills filed in the Senate and the House of Representatives converting the 4,400-hectare special economic zone into a free port.

The ratified version also restores investment incentives and duty-free privileges to its locators, as provided under Republic Act 7227 or the Bases Conversion Development Act of 1992. (More at GMA News TV. Photo of Levy Laus by Tetep Marasigan)

The big birthday bash

(YATS Chef Philip Golding gives me a cleaver to slice our delectable birthday cake. Photo by Dudubel)

I turned another year older last Saturday, and as expected, it didn't turn out to be a quiet walk towards impending senility.

The gang and I motored over to the Clark free port over the weekend and engaged in a few days of mayhem. It was actually a joint birthday celebration for a number of us, starting with Mago and Dudubel in January, and me in February, along with Buntis who celebrates her natal day on Valentine's Day. Unfortunately, Buntis couldn't join us due to a previous appointment...achuus.

While the resort we stayed at was clearly a shadow of its former self, we still managed to enjoy ourselves mainly because of the really super nice people we met in several establishments, and the fun activities we had. Some played the slots at the casino, while the others stayed in the villa for some card games. It turned out to be a mighty profitable weekend for some of us hehe.

(The gang at play poses for a 'beauty shot'.)

We had a surprisingly inexpensive lunch at the YATS Wine Club co-owned by Chef Philip Golding who served as vintage beer for starters, some Chianti to go with our main course of salmon, steak and risotto, and port to close our meal. Advised earlier of the dietary restrictions of a few in the group, Golding served us some delectable sugar-free white chocolates, and thereafter gifted us with oh-so-heavenly sugar-free cheese cake. The cake was so good even the non-diabetics in the gang devoured it when there were three other sugar-rich cakes just waiting to be eaten. Ang kapal nyo ha!

Philip showed us his extensive collection of wines and two of his wine "cellars", which were actually not cellars but temperature-controlled rooms chockfull of absolutely gorgeous vinos from everywhere imaginable. I asked if I could live in his cellar where I would be very happy just drinking all the good stuff. The wines don't come cheap, of course, and he proudly showed off his P1-million wine, a bottle from Chateau Margaux. There was also another Chateau Margaux bottled in 1803 (P125,000), and I asked Philip what it would taste like considering it was really old and that it had probably been subjected to massive temperature fluctuations before it finally landed in his hands. He said he was dying to find out, and I of course had the temerity to rain on his parade by saying that he could have also ended up with a rather expensive bottle of vinegar! Hahaha!


(I'm not very partial to carbonara, but this version at C' is lusciously creamy with some earthy notes.)

Aside from the casinos and the indoor card games, some of us managed to do a bit of shopping and I for one, finally found Aquafresh Extreme Clean at Puregold, and rather inexpensive Carnation Hazelnut Coffee Creamer in larger containers unlike those sold here in Manila. Duty-free shopping of course is not what it used to be in Clark, and the goods are no longer as inexpensive and varied as before. Time was when I used to buy all my toilet paper at Clark (or Subic) because they were imported and more reasonably priced than our local brands, and what's more they were thick and absorbent. Okay, so I have a thing for plush toilet paper...shoot me.

But it wasn't just fun and games for us over the weekend as we were able to sit down and chat with Chicos Luciano, president of the Clark International Airport Corp. who gave us a rundown of the exciting new developments in the aviation field in Clark. For a government official, Luciano is one heck of a regular guy. He drove himself from Quezon City on a Sunday, without any bodyguards in tow, just to meet with us. He is so amiable and kind, constantly giving in to snickers at our antics, but he definitely knew his stuff. He rattled off facts and figures like they lived in his head and was generous with the information we needed for our slew of Clark stories. If all government officials were like Mr. Luciano, we would have one heck of a super efficient bureaucracy.

(Oooh, panizza! Yum!)

Luciano thereafter treated us to an ultra-sumptuous meal at the "C" Italian restaurant on Fields Ave., said to be a favorite of my favorite presidentita GMA, Imee Marcos, Luli Arroyo, Sharon Cuneta, and a few other celebrities, as well as CEO expats now living in Clark. Some of its fans actually drive to Clark (now a very fast one hour drive on the repaved NCLEX) from Manila just to have a meal there.

Its best seller is the panizza, the creation of its Swiss-born "Chef Patron" Chris Locher, which is really a super-thin crust pizza sliced diagonally, and which you can top with alfalfa sprouts and arugula. Chris tells us that a few times in a month, when the presidentita has her "cravings", PSG guards would turn up at "C" to take out panizza for the madam. Our meal last Sunday consisted of deliciously creamy risotto, very tender slices of angus beef, a different take on Pasta Amatriciana, and yummy yummy flavors of gelato. The strawberry and lemon-mandarin gelatos are really to die for.

Too bad that Chef Locher doesn't want to put up a branch in Manila. He tells me that while he has been with the Philippines for quite awhile, he absolutely abhors Manila. So grab your cars people and take a trip down to Clark soon if you want to have a taste of Chef Locher's brilliant dishes, designed to please every foodie bone in your body.

Props goes to publicist Mike Marasigan (my ex-boss at BusinessWorld, imagine that!) who was able to facilitate the great getaway, along with Clark Development Corp. tourism officer, the ever cheerful Noemi Garcia. Thanks guys! We really had a blast!