Disillusioned

CONTINUING my tirade about Asian Spirit, I really had high hopes for this airline, which in the past, had merely suffered from the lack of proper marketing support and strategy. I had so believed in the leadership and abilities of its new owner, Zest-O king Alfredo Yao, who became my idol especially after interviewing him, and finding out how much he had struggled to become the success that he is today. I was amazed at how humble he still remained, despite his fame and fortune.

What was memorable in that interview was his response to my question on advice he could give to new entrepreneurs. This is what he said:

“If you’re just starting in business, get out of your comfort zone. Being an entrepreneur is really hard work in the beginning. Keep your focus. But more than anything, you must take care to earn the respect of your colleagues and suppliers. You can only do this by having word of honor in any transaction. Success doesn’t come overnight, but by being decent and honest in all your dealings, it will help you in the long run. By word of mouth, people will know you. ’Pag sinabi mong magbabayad ka ng utang, for example, magbayad ka. It is sad that nowadays, this trait, of being trustworthy or having word of honor, has slowly disappeared.(See Look to the Sky, BusinessMirror, May 7, 2008)

I find it really hysterical for him to say something like that and completely do the opposite...e.g. miss payment again on his carrier's insurance premium, after he himself committed to pay Prudential Guarantee by a certain deadline. Tsk, tsk, tsk.

I dunno about you, but I am certainly disillusioned and puzzled by Mr. Yao's behavior.

Feng shui and Sulpicio Lines

CHINESE families in the Philippines continue, to this day, believe in geomancy or feng shui, to help them ensure luck and prosperity in their lives and their businesses.

I remember Joseph Chau of Mandarin Oriental, whom I met sometime in 2001 or 2002 while making pahula in the lobby of the Pan Pacific Hotel in Malate (he was a devotee of Aling Puring Alvior then), telling me that Sulpicio Lines was one of those transport businesses which had their logo redesigned to ward off the bad luck that seemed to be hounding them.

By then, Sulpicio Lines had already figured in three major maritime disasters — the sinking of M/V Doña Paz in 1987 (death toll: 4,000); M/V Doña Marilyn in 1988 (death toll: 77); and M/V Princess of the Orient in 1998 (death toll: 70, and 88 still missing).

I am no longer sure if it was Joseph who redesigned Sulpicio Lines' logo or it was someone else (his Mandarin O. predecessor perhaps the late Paul Lau?) but by the time I met Joseph, the shipping line was already sporting the new logo using the more modern yellow-green "S" enclosed in a circle with a yellow background looking like the sun. (Sorry I can no longer find the old logo online.)

The new logo seems to have worked for Sulpicio Lines as it didn't figure out in any more disasters since its M/V Princess of the Orient sank near Fortune Island in Batangas in 1998. Then last week, or 10 years after its last mishap, it's M/V Princess of the Star sank off Romblon amid stormy weather. (As of June 27, newspapers reported 124 confirmed dead and 56 surivors. The ship was carrying 862 passengers.)

Which goes to show, that no matter how much you believe in geomancy, human error and frailty will negate every positive vibe the feng shui was supposed to have engedered. (Then again I find it queer that Sulpicio Lines' luck seems to run out every 10 years or so...hmmm.)

* * * *
WELL, well, what's this I hear? Another transport company just had their offices blessed and feng shui'ed last Wednesday, June 25, 2008.

According to my sources, Asian Spirit had a feng shui ceremony that day, which coincidentally, was the day the airline committed to pay the premium it owed its insurer, Prudential Guarantee. One of the quirky things that happened was during the blessing ceremony, all women who gave birth this year were told to leave the offices, as they are considered unlucky I suppose.

You would expect that all things would have gone well for Asian Spirit from then on. (If you recall, the airline had seriously jeopardized its passengers who flew on its planes from June 19-23, 2008, because the carrier had no insurance. See my earlier blog entries.)

Sorry to disappoint you feng shui believers out there. Because by the end of the day, AIG London, Prudential Guarantee's reinsurer, sent the airline a Notice of Cancellation of its insurance policy after...gasp! missing the deadline to pay Prudential! Ay anovayan Ambassador Yao!

Of course, by next morning, June 26, Prudential Guarantee was paid. Pero sa true lang, ano pa ang silbi ng feng shui kung inefficient naman ang management ng airline na ito? To think nag-PR pa sila saying they were mounting "mercy flights" to Kalibo, Aklan, and San Jose, Antique, ferrying relief goods for the victims of Typhoon Frank. Tsk, tsk. Bilib na sana ako pero...wa din.

Attention Director Carmelo Arcilla of the Civil Aeronautics Board...hoy gising!

Inefficiencies in civil aviation regulations

Whew! Airline insurer back

FLAG carrier Asian Spirit is once more insured by Prudential Guarantee and Assurance Inc., this after the airline revoked its appointment of an insurance broker and committed to settle the carrier’s premiums Wednesday, June 25.

In a letter addressed to Lucio Fernandez, vice president for aviation and marine of Prudential Guarantee, dated June 23, 2008, and received by Prudential at 7:23 p.m., Asian Spirit chief finance officer Albert Toribio said: “After a careful evaluation of the situation, I have decided to revoke the appointment I made in favor of Empire Insurance Co., as exclusive broker of record.

“I hope this letter will set the record straight that we have never rescinded the existing insurance covering our aircraft with your company. It is our desire to continue to preserve our harmonious relationship.”

In his letter, a copy of which was obtained by the BusinessMirror, Toribio added: “As regards to our premium payment for the 2nd Quarter, we will make remittances by Wednesday.” (Read the rest here.)

Click this to read the letter: File0303.PDF

* * * *
I used to love riding Asian Spirit.

Despite the minor irritants like sales agents eating instant mami while serving passengers buying tickets at the Express ticketing office or slight confusions in our bookings, its flights were hardly delayed, except for one or two incidents I know of. A friend of mine waited hours in the Caticlan airport on her way back to Manila, but airline personnel never even bothered to announce the flight delay. But I loved the jet service to Caticlan which was the fastest among other carriers serving the same route from Manila.

In all my years riding the airline and writing about the aviation industry, not once did Asian Spirit, to my knowledge, miss out on paying its insurer, nor flown its planes without being covered by an insurance policy. The old management also made sure that, so there would be no problems in case of accidents, their planes were all insured to about $500,000 per quarter.

So it comes to my surprise that the carrier, now under new management, was brazen enough to fly without insurance coverage from June 19-23, 2008, and the situation would have continued, if only we didn't find them out. Imagine if anything happened last week? Who would pay for the damages or claims of the victims? Ang scary naman ha!


(Amb. Fred Yao, fruit juice king, banker, and now Asian Spirit owner.)

What's even more irritating is talking to airline officials who are obviously lying and make it appear that all is well. To ascribe everything to just a case of "misunderstanding" is too simplistic. Airline officials had to wait for five days before rectifying the said "misunderstanding". And thanks to its owner, Ambassador Alfredo Yao, the problem was settled. Imagine having your company owner come to your rescue because of your stupidity? Duh.

Then you have the clueless and lax monitoring system of the Civil Aeronautics Board.

When I asked CAB, why despite the expired insurance contract filed with them for Asian Spirit (Feb. 07-08), the agency didn't have a new one on file, the person-in-charge I spoke to said the airline had until June 30 to submit reportorial requirements including new contracts. So for all we know, the carrier had been flying without any insurance since March 1, 2008! I mean how would the CAB know that our airlines are all covered by insurance policies if it doesn't ask for those contracts? Sheer faith?

Oh c'mon! When we have lives and properties at stake, you make sure you have proof that the airlines are in fact, insured! How dare the CAB toy with the lives of the flying public?!

Amid the tragedy of Sulpicio Lines and what appears to be some negligence on the part of the Coast Guard, now arises questions on just how strict are our regulatory bodies in the air transport sector.

If you remember, our country has already been deemed a flight risk by the U.S. Federal Aviation Authority, which downgraded our airports to Category 2, because of insufficient air transport personnel, inefficient monitoring systems, and lack of proper regulations and implementation. No wonder. These agencies can't even be trusted to make sure our airlines fly with insurance!

So is CAB going to fine Asian Spirit for flying without insurance for five days? You know the answer kids. And I'm not liking it all!

Asian Spirit flying without insurance

(Photo from Boracay Budget Travel Tips)

Asian Spirit, the carrier of businessman/banker Alfredo Yao, is flying amid questions about its insurance cover.

A source at Prudential Guarantee and Assurance Inc. confirmed that it is no longer the airline’s insurer as of June 18.

A check with the Civil Aeronautics Board (CAB) shows, however, that Asian Spirit has not submitted any new filing to show any change in its insurance company.

An official of Prudential Guarantee said Asian Spirit has “no insurance at the moment…. Asian Spirit has rescinded the policy of Prudential by declaring that it is no longer their authorized insurance company.” The official who requested anonymity said an airline insurance policy usually is contracted annually, “so they [Asian Spirit], pre-terminated their insurance [with Prudential].”

The official made this statement in reference to a letter written by Asian Spirit chief finance officer Albert S. Toribio entitled “Appointment-Sole & Exclusive Broker on Record” on June 18, a copy of which was obtained by BusinessMirror, designating “Empire Insurance Co. Inc., as the exclusive insurance company of Asian Spirit for its Aviation, Hull & Liability, Deductible, War, Personal Accident and other aviation-related insurance requirements.”

Toribio added: “We also confirm our understanding that Empire Insurance Company Inc. has appointed Asian Reinsurance Brokers Pte. Ltd. as Empire Insurance Company Inc.’s exclusive Reinsurance Broker in London for Asian Spirit aviation insurance requirements.

“This appointment of Empire Insurance Company Inc. and Asia Reinsurance Brokers Pte. Ltd. rescinds all previous appointments until cancelled in writing.”

Following the letter of appointment of Toribio, Prudential Guarantee wrote Toribio on June 19, a copy of which was obtained by BusinessMirror, saying: “By your unilateral action of appointing another insurance company from the 18th of June 2008, you have in fact rescinded your insurance contract with Prudential Guarantee and Assurance Inc. and therefore there is no insurance policy in effect from the date of issuance of your letter.” (Read the rest here)

* * * *
Here are the pertinent documents I used as basis for this report, aside from my extensive interviews with officials of Prudential Guarantee, the CAB, Asian Spirit, Empire Insurance, and the Insurance Commission.

Rescision of Prudential Guarantee contract asian spirit rescision.pdf

Acknowledgement of Prudential Guarantee that it is no longer AS insurer File0291.PDF