‘Boutique airline’ takes wing, offers frills at affordable fares

Skyjet's 94-seater BAe 146-200 takes off from the runway of Basco Airport. 

A NEW airline is taking wing to serve premium tourist destinations in the country by offering passengers the full service of a legacy carrier at affordable fares.

Magnum Air (Skyjet) Airlines is launching its first scheduled service by flying to Basco, Batanes, on December 14, just a month after the Civil Aviation Authority of the Philippines (Caap) granted the carrier its airline operator certificate (AOC).

In an exclusive interview, Dr. Joel Mendoza, Skyjet president and CEO, said the airline’s flights to Basco will initially be three times a week—Mondays, Wednesdays and Fridays. The flight will take only 70 minutes on the carrier’s jet plane, a British Aerospace System (BAe) 146-200, which can carry 94 passengers and 3 tons of cargo.

Skyjet will also be flying from Manila to Busuanga in Palawan (four times a week), beginning February 15, 2013; to Caticlan, the gateway to Boracay Island, in March 2013; and is considering to fly to Surigao City, Surigao del Norte, a jumpoff point to the country’s surfing capital of Siargao.

It is also mulling to fly next year to Virac, Catanduanes, and Catarman, Northern Samar. While not considered premium tourism destinations, Mendoza said these destinations are currently underserved by air services, despite the huge demand for travel there. “We are a boutique airline,” Mendoza explained.

Dentist-turned-airline operator Dr. Joel Mendoza.

“We are small but what we offer is the full service usually found in legacy carriers, like snacks, comfortable upholstered seats, quality passenger reservations and check-in systems, etc. We are not low-cost, but we are affordable. We’re bringing back the frills in flying.”

A one-way fare to Basco will cost about P6,000 per person, “but we will be offering promo fares during the lean season,” according to the Skyjet CEO. He said that Batanes residents will also get “special Ivatan fares.” October to June is usually the peak season for travel to Batanes.

Skyjet’s fleet consists of two BAe 146-200 jets, the same planes used by the British royal family, British Airways, Lufthansa AG and a number of other European airlines.

“We give premium to safety, comfort and convenience,” Mendoza said. He added that the BAe 146-200 is the only plane that has been certified to take off from and land at the Basco airport, which has a steep runway slope of 4.5 degrees, owing to Batanes’s general rolling terrain.

Most commercial airplanes are certified to take off from and land at airports with a maximum runway slope of only 2 degrees, or runways which are almost flat. If a plane will have to operate in an airport with a runway slope of more than 2 degrees, the aircraft manufacturer’s engineers need to meticulously test the plane in that runway using its own pilots, before certifying that the plane can safely operate there.

In the case of Skyjet, BAe engineers wrote a new aircraft operating manual instructing pilots on the procedures to take off and land specifically in Basco. The Caap thereafter approved this after conducting a “proving flight.”

“The BAe 146-200 is specifically made for short landings and takeoffs. It specializes in [operating in] unpaved runways so we can assure passengers of ease in landing even in smaller airports,” Mendoza said.

All Skyjet’s pilots are Filipinos who have clocked in 10,000+ of hours specifically on BAe146 Series planes, he added. These veteran pilots flew for City Jet, Lufthansa and other airlines. “This increases the safety and reliability of Skyjet’s flight operations,” Mendoza said.

According to Skyjet’s certificate of public convenience and necessity granted by the Civil Aeronautics Board, the carrier is allowed to operate charter services for domestic and international routes, regular scheduled service for domestic destinations and cargo services.

A dentist by profession, Mendoza is also a director of the Batanes Cultural Travel Agency, which has been selling travel packages to Batanes since 2007. “I just want to promote Batanes as a cultural tourism destination that will help create more jobs for the Ivatans. Having a direct air transport service to Batanes will also allow the locals to visit Manila,” he said.

Capitalized at P50 million, Skyjet has been registered with the Securities and Exchange Commission since September 2005. Its chairman is Telesforo Castillejos, former governor of Batanes, while its director of flight operations is Capt. Antonio Buendia, a veteran commercial pilot and former president of Philippine Aerospace Development Corp.

(This piece originally published in the front page of the BusinessMirror, Dec. 6, 2012. Photos courtesy Dr. Joel Mendoza)

Foreign carriers rejoice as House moves to remove airline taxes

MANILA, Philippines - Foreign carriers with connections to Manila welcomed the recent approval on third and final reading of House Bill No. 6022, which seeks to remove burdensome taxes that have been hampering the airlines’ profitability in the country.

In a press statement, Board of Airline Representatives (BAR) First Vice Chairman Steven Crowdey said: “This is indeed positive and exciting news to the international airline community that has been monitoring the progress in legislation. We thank the Aquino administration for supporting the approval of the bill in the Lower House.”

Pushed primarily by Iloilo City Rep. Jerry Treñas, HB 6022 entitled “Rationalizing the Taxes on International Air Carriers operating in the Philippines” aims to amend Sections 28 (A) (3) (a) , 108 (B) (6) and 118 of the National Internal Revenue Code of 1997, as amended.

The proposed legislation would remove the three-percent common carriers tax and the 2.5 percent tax on gross Philippine billings imposed on foreign carriers, based on reciprocity.BAR has long been pushing for the elimination of these taxes which its members say is the major reason behind the slow development in international air connectivity of the Philippines. (For the rest, pls. click InterAksyon.com. My piece was originally published on May 30, 2012.)

DOT: PHL has other connections to Europe

AIR France-KLM’s planned pullout from Manila will likely impact on the number of tourist arrivals from Europe as many prefer direct nonstop services to destinations, a tourism official said on Tuesday.

“Nonstop service is a preferred option of many air passengers looking for a fast and convenient connection. The planned termination by KLM of its nonstop service to Manila by April next year is bound to affect our European market. We are hoping KLM will reconsider its decision,” Assistant Secretary Benito Bengzon Jr., spokesman of the Department of Tourism (DOT), said in a text message.

This as other tourism officials averred that even if KLM pulled out its direct service to Manila, there were other carriers that could take up the slack.

“We have more connections to Europe now than before,” said a DOT source. “Of course, we would still want them [KLM] to fly here because it’s a direct route [from Europe]. But there are other alternative carriers,” said the DOT official who requested not to be identified, as she was not authorized to speak on the matter. Air France-KLM is Europe's largest airline.

Latest DOT data showed that tourist arrivals from Europe were steadily rising, reaching 256,408 from January to August this year, compared with 238,891 in the same period last year. In August alone, tourist arrivals from Europe were up 13 percent to 26,612.

In the past, the same doomsday predictions about a drop in European arrivals arose when Germany’s Lufthansa said it would withdraw from Manila, which it did in 2008.

Other carriers that fly from Europe to Manila using various stopovers include Cathay Pacific, Singapore Airlines, Etihad, Qatar Airway, Emirates, to name a few. “All of these carriers,” DOT officials said, “offer very competitive airfares [as KLM]. And some travelers from Europe do like to break in half their trips, they like stopping over in other countries.”

A direct flight from London to Manila, for instance, is about 12 to 13 hours. Depending on the carrier, stopovers are either via Dubai, Doha, Singapore or Hong Kong, although this stretches the trip to about 18 hours.

A quick check via Internet booking sites showed that a London to Manila flight with one stopover, costs anywhere from $917 to $1,075, for end-January 2012, roundtrip, across all the above cited airlines.

A DOT official said even if European arrivals accounted for only about 11 percent of the total tourist arrivals in the Philippines, they stay the longest at 12 to 21 days, and thus spend more than other tourists from other regions.

Also, despite the DOT’s minimal budget for its European promotions, agency insiders said the Philippines still manages to make a dent during the important travel fairs in that region.

“We normally participate in the biggest travel fairs in Europe such as the upcoming World Travel Market in London from November 7 to 10. We also attend the ITB in Germany in March, and we just finished attending the Leisure Fair in Russia from September 21 to 24,” an official said.

Data from the DOT showed that of the total European travelers to the Philippines, those coming from the United Kingdom accounted for the largest. From January to August this year, tourists from the UK rose to 69,295, up 7.5 percent from the same period in 2010. This was followed by Germany at 40,250; and France at 20,284. Tourists from Amsterdam, the home base of KLM, amounted to 13,677, accounting for less than 1 percent of total arrivals in the Philippines.

The DOT officials, however, pointed to significant jumps in arrivals from Russia, which soared by 26 percent to 14,235 during the eight-month period from 11,298 last year.

In 2008 when Lufthansa pulled out from the Philippines, total tourist arrivals rose to 3.14 million. The DOT attributed the increase from significant growths in the European arrivals specifically from Russia, which was up 34 percent, and France 18.7 percent.

(My piece was originally published on the front page of the BusinessMirror, Oct. 19, 2011. Photo from the web.)

DOT chief eyed for Monetary Board vacancy

(A day before his resignation, DOT chief Bertie Lim attends the Philippine MICE Conference in Cebu City. Escorting him to the exhibit area is Cebu Gov. Gwen Garcia. Photo from Philippine MICECON FB page)

RESIGNED Tourism Secretary Alberto “Bertie” A. Lim is being eyed to occupy the third remaining vacant slot on the Monetary Board (MB), the policy-making body of the Bangko Sentral ng Pilipinas (BSP).

Several sources on Saturday confirmed that a recommendation to President Aquino was in the works. On Sunday a source in Mr. Aquino’s official family told the BusinessMirror: “I understand that’s what P-Noy has in mind for him,” indicating that the President had already approved the recommendation.

Lim reportedly has the backing of a number of Mr. Aquino’s own people, especially those from the “Balay” faction of Transportation Secretary Manuel A. Roxas II.

Contacted for comment on Saturday morning, Lim declined to say if he had been offered the job. “I believe it is more proper for P-Noy to respond to your query,” he said.

Asked, however, if he would accept the job if offered to him, Lim said: “It is a job that is less stressful and for which I am qualified to work in. So I would be inclined [to accept it] if it is offered.” Lim is an economics graduate of the Ateneo de Manila University.

The appointment to the MB is being played as a “graceful exit” for Lim from the Department of Tourism (DOT) on August 31, and a reward for his fervent dedication to Mr. Aquino whom he campaigned for in 2010. The tourism chief was part of the regular economic briefing group of Mr. Aquino, “working closely” with the latter even at the Times Street residence.

The appointment, however, could ruffle the feathers of some in the so-called Samar group of supporters of Mr. Aquino.

Lim’s rival for the MB post is former BSP Deputy Governor Armando Suratos, who retired from the monetary institution in December 2010. (UPDATE: Mr. Suratos is currently a consultant to the BSP.)

A career central banker and well-respected in his own circles, Suratos is rumored to have the backing of Sen. Ping Lacson, a distant relative; “brods” Executive Secretary Paquito Ochoa and Jesuit lawyer Fr. Joaquin Bernas, BSP sources said.

(The other contender to the BSP Monetary Board post is retired Bangko Sentral Deputy Gov. Andy Suratos. He is currently a consultant to the BSP. Photo from BSP)

Suratos studied law at the Ateneo and is member of the Fraternal Order of Utopia in the College of Law, of which Ochoa and Bernas are also members. Ochoa represents the so-called Samar faction of supporters in the Aquino administration.

But in a text message, Senator Lacson said of Suratos: “The name doesn’t ring a bell, and I have no knowledge whatsoever if, indeed, he is being eyed for the position.”

Understandably, BSP insiders are more welcoming of an ex-colleague on the MB, rather than an outsider like Lim. BSP Governor Amando Tetangco Jr. failed to respond to several text messages seeking his reaction to Lim’s rumored appointment. But one ranking BSP official offered his thoughts: “Lim is a good man. But we are talking of the Monetary Board. More serious and specialized stuff.”

This would be the third government post for Lim. His first government job was as director of the Civil Aeronautics Board under former President Gloria Macapagal-Arroyo. Before his appointment to the DOT, Lim was executive director of the influential Makati Business Club, a keen Mr. Aquino supporter.

Meanwhile, Lim clarified that the President didn’t “ask me to resign.” He had been rumored to be one of three on Mr. Aquino’s list of “headaches,” who only brought him “bad news.”

Retired advertising executive Ramon Jimenez is rumored to be taking over from Lim at the DOT, and was only waiting to be asked by Mr. Aquino, as of Friday afternoon.

‘He was smiling the whole day’
LIM’S resignation, announced on August 12, caught the public—including DOT employees and several tourism stakeholders—by surprise. He said he was doing so for “personal” reasons. “I would like to spend more time with my family. My responsibilities require a great deal of travel and time away from my loved ones,” he said.

A brother of broadcaster Cheche Lazaro, Lim has been married 39 years to the former Carla Campos Abreau. The couple’s children are already in their 20s and 30s, living abroad and pursuing their own careers; one of them is married and now has his own family.

The day before his resignation, Lim was in Cebu opening the MICE Philippines Conference, which was attended by a lot of tourism stakeholders, including a number of DOT officials.

In an interview, a tourism expert who was there said: “[Lim] didn’t look bothered to me. He even posed for pictures with delegates, though I noticed some sadness in his face. But he didn’t act like he was ready to quit.”

A tourism official who requested anonymity, said he and others had no inkling their boss would be resigning the next day. “He was smiling the whole day naman. And was chika-chika to many. He posed for photos until late Thursday night.”

(Participants to the Philippine MICE Conference in Cebu say they didn't notice anything unusual in the behavior of DOT Sec. Bertie Lim, seen smiling in this photo with some delegates from Davao. Only one 'noticed some sadness in his face. But he didn’t act like he was ready to quit.' Photo from Philippine MICECON)

Those who wanted Lim ousted virtually declared him “slow and incompetent” for the job, and had protested his advocacy of an “open skies” policy, later adopted by the President on a provincial “pocket-type scale. “

Also, the tourism chief earlier received flak for having given the go-signal for a failed tourism slogan, “Pilipinas Kay Ganda,” for which Undersecretary Vicente Romano took the fall.

Making enemies
THE Black and White Movement, of which Lim was a member, released a press statement after he announced his resignation, decrying the sinister forces that pushed him to resign.

“In the process of working in the government, Bertie made enemies from powerful vested interests that benefited from a regime of protectionism. And their constant attacks against Bertie made it increasingly more difficult for him to do his job,” it said.

Industry sources said the few vocal protestors claiming to represent the tourism industry had never once owned or worked in a tourism establishment. One who wanted Lim ousted even went to town with the media, but failed to mention that his group lost the bid for the national tourism development plan, the same sources added.

Jose Mari del Rosario, president of Microtel Development Corp., confirmed the staunch anti-open skies lobby to have Lim removed from the DOT. But he said, “that [open skies] policy is starting to benefit the hotel industry, at least in my case.” Del Rosario’s company manages several provincial hotels under the Microtel chain.

He believes Lim to be a “very straightforward and idealistic person. Medyo mahina lang ang personal PR, ‘di politiko like his predecessors”—echoing the assessment of other tourism stakeholders who liked him well enough, but was put off by the tourism chief’s lack of charisma.

“Sometimes he would attend our events,” said a well-known female hotelier, who requested anonymity, “and he would just keep to himself. He doesn’t really mingle with us. Of course, when you’re in tourism you have to be ma-PR!”

Aileen Clemente, president of the Philippine Travel Agencies Association, sees Lim’s resignation as another impediment in the progress of the tourism industry.

“The primary enterprises of the industry put emphasis in having continuity. The average tenure of the past secretaries in the department is two years, which is quite detrimental to the industry. Plans have been made in the past but little of which were geared to have long-term impact. The rest of the public always clamor for good marketing strategies, but to industry stakeholders, this is merely the tail-end of an honest-to-goodness strategic plan that tackles institutional reforms,” she said in a press statement.

“[More] than branding and marketing, there are so many issues that plague the industry. First, there needs to be more effort to remove the downgrading of the [Federal Aviation Authority] and the European ban…. Second, measures must be taken to remove or lessen the numerous hurdles and challenges in the procurement of visas by foreign nationals coming to the Philippines. Third, the government must understand the impact of the double taxation of airlines as well as the charging of the CIQ [Customs, Immigrations and Quarantine]. Fourth, it is essential to plan the various infrastructure that needs to be developed especially in terms of airports, roads, transport systems,” she added.

“Laying the groundwork does not only take time. Being saddled with this responsibility takes patience, organizational skills and leadership to ensure that it creates an effective plan in ensuring the success of tourism in the country. Part of this, Secretary Lim has already done. We just hope that it will be continued by his successor to the post.”

For his part, del Rosario stressed, “People like to put forward their opinions on how the tourism industry should be handled—thinking it’s just slogans or tag lines. But it starts with the proper infrastructure. And that’s what Bertie Lim was doing. Consider his background in running El Nido Resorts as a microcosm of Philippine tourism. It was a ‘can-do’ approach on purely private initiative but to make it work, look at the logistics they had to put in place to make it a success.”

In what now appears to be a flash of prescience, Lim, who was also forced out the Arroyo administration due to his “open skies” stance, told the BusinessMirror in November 2010: “The enemies of reform are still strong. So we expect it to be a continuing struggle.”

(My piece was published on the front page of the BusinessMirror, Aug. 15, 2011.)

(UPDATE): On Aug. 17, in an interview with Karen Davila on ANC's Headstart, Lim said President Aquino delayed taking action against TIEZA chief operating officer Mark Lapid, despite a COA report detailing the latter's alleged fund misuse, due to "bigger political considerations".

The day after, Malacañang denied Lim's statement, saying there was "no selective prosecution of officials".

I dunno if this recent revelation by Lim will affect his chances of being appointed to the Monetary Board. All I know is, the President doesn't take too kindly to criticism.)

One year of the Noynoy Aquino presidency is over - what now?

What Now? (May-June 2011 Asian Dragon)

(This piece was originally published in the May-June issue of the Asian Dragon magazine.)

Uptick in foreign leisure travels by Pinoys seen*

THE 39-year-old Rajah Travel Corp., a leading full-service travel agency in the country, sees an uptick in foreign travels by Filipinos this year, owing to the depreciated US dollar. This is projected to boost the travel firm’s bottom line by 30 percent, said its president, Aileen Clemente.

Clemente, who is also incoming president of the Philippine Travel Agencies Association (PTAA), is also optimistic that the 3.7-million target in tourist arrivals by the Department of Tourism for 2011 would be attained despite the scrapping of the “holiday economics” scheme of the previous administration.

In an interview, she told the BusinessMirror the changes in visa requirements for visiting Indians would be a big boost to tourist arrivals. “Any Indian national can stay here for 21 days. Conversely, the same is true for Filipinos visiting in India. And [Philippine Airlines] is now flying the route,” she said. “[This is a big market] both for corporate and leisure travelers because of the call centers [business-process outsourcing companies], because the backup of one [country] is the other—that’s India and the Philippines.”

She noted as well “huge investments” in the construction of resorts in the country, some of them with foreign owners who will tap the “database of their clients.”

Other factors that will enhance tourist arrivals to the Philippines, Clemente said, are the forthcoming daily flights of All Nippon Airways (ANA) between Narita and Manila, as well as the recently announced “pocket open skies” policy of the Aquino government.

Separately, Tourism Secretary Alberto Lim said: “This new service between Narita and Manila will help us obtain a larger share of the Japanese outbound travelers. We are confident that the direct link, complemented by efforts of the Jata [Japan Association of Travel Agents] intermediaries, will stimulate stronger traffic from this major source market.” ANA flights will commence on February 27, with the inaugural flight bringing in Jata chairman Akira Kanai. Jata is the biggest association of travel and tour operators, accommodation and transportation providers and even academic and legal institutions in Japan.

According to Department of Tourism (DOT) data, Japan is the third-largest tourist market for the Philippines, growing 10.4 percent to 358,744 visitors in 2010, from 2009. Japan also accounts for a 10.2-percent share of total tourist arrivals in 2010, which reached 3.52 million, surpassing the DOT’s target of 3.3 million. Korea accounted for the largest share of total arrivals at 740,662 or 21 percent, followed by the US, at 600,165 (17 percent).

Currently, four airlines combine for 61 flights weekly from Japan to the Philippines. PAL accounts for 32, Japan Airlines for 14, Delta Air Lines for 12 and Cebu Pacific for three.

(AILEEN CLEMENTE, left, incoming president of the PTAA, and Ma. Paz Alberto, chair of the 18th Travel Tour Expo and outgoing president of the PTAA, brief the press on the 18th Travel Tour Expo 2011, on Feb. 8, 2011. Photo by NONIE REYES)

For her part, Clemente said while the issue of the pocket open skies remains “quite controversial…if it is studied properly, [critics would] know its benefits to economic growth, even if confined to say, Clark [Pampanga].” In pursuing a liberalized aviation sector, the Aquino administration has decided to give flying frequencies to airlines of countries which will give reciprocal flying rights to Philippine carriers.

Per President Aquino’s Executive Order 84 issued in December, there are only seven three-day weekends in 2011 as most holidays are now pegged on their actual dates. Former President Arroyo practiced what was dubbed “holiday economics,” or moving some holidays to the nearest Monday or Friday, which allowed Filipinos to take vacations. Many tourism establishments and travel agencies credited the boost in domestic tourism sales to this practice.

Meanwhile, Rajah Travel’s optimistic projection for 2011 is anchored on an anticipated boost in foreign travels by Filipinos. Tour packages under its “Insight Vacations” brand, which are premier escorted tours to Europe, the US and Canada, are now selling 17 percent lower than usual rates. “We have good rates right now,” Clemente said, adding that Insight Vacations tours are “really a worthwhile investment” for Filipino travelers. Aside from Insight Vacations, the firm also targets middle market, value travelers, luxury travelers and domestic tourists via its other travel brands.

In 2010 the travel agency’s sales were up only 12 percent, due to sluggish foreign travels. Several international airlines had to reduce or halt some flights last year due to the ash clouds which were formed from the Iceland volcanic eruption. While the firm’s vacation packages to the Middle East may be affected by the current political troubles in the area, Clemente still remained “confident we can attain our 30-percent target [this year] because of the depreciation of the dollar,” making foreign travel more accessible to a wider market. “We have good deals,” she stressed.

She said Filipino first-time travelers usually go first around Southeast Asia. “Those who have been to Southeast Asia will go to other parts of Asia, and the most popular [destinations] are Japan, Korea and China. Those who can go farther will go to Australia, the Middle East, then the Mediterreanean, then Europe.”

Rajah Travel is one of the major participants in the 18th Philippine Travel and Tourism Expo from February 18 to 20 at the SMX Convention Center, which is organized by the PTAA. Over 250 companies—travel agencies, tour operators, as well as local and international airlines, hotels and resorts—will be participating in the travel fair.

Exhibitors will offer the public heavily discounted travel packages, including airfare and accommodations, only on those expo dates, the PTAA said. About P300 million in sales are projected to be generated from this year’s expo, up 42 percent from its P210 million sales in 2010.

*(Forget to post this earlier. My piece was originally published in the BusinessMirror on Feb. 17, 2011.)

Airline blues

GOT this press release from Philippine Airlines in my mailbox today. Thought it was interesting enough to publish as is, since most of us don't really know the details of the issues the cabin crew and airline management are fighting about. But clearly, this deadlock between both parties has to be broken soon as it undermines the safety of the riding of the public, and will affect the tourism opportunities in the country.

Read the Flight Attendants' & Stewards' Association of the Philippines (FASAP) press release of Sept. 29, 2010 here first.

PAL salary, benefits of cabin crew