PAL needs more cash for refleeting program

FLAG carrier Philippine Airlines believes 2012 will be crucial and will determine whether it could carry out a strong refleeting program, expand its routes, and return to better fiscal health.

Airline President Jaime Bautista said in an interview with select reporters on Wednesday evening that “from a management point of view, we need higher capital” to pursue a refleeting program and keep the carrier competitive.

But he said he could not determine how much new capital would be needed because this would all depend on whether the planes would be purchased or leased.

“Refleeting is a challenge. Wide-bodied aircraft are needed. You need to pay delivery fees [about 15 percent to 20 percent of plane cost], that’s where the cash is needed,” he said. This is why “management welcomes new investors,” he said.

Businessmen Ramon Ang of San Miguel Corp. and Manuel V. Pangilinan of the First Pacific Group are reportedly both keen on investing in PAL and help it carry out its refleeting and modernization effort. PAL is 94-percent owned by PAL Holdings Inc. which is led by taipan Lucio Tan.

Of the 36 aircraft currently in the PAL fleet, it has five Boeing 747-400s that were purchased during the carrier’s first refleeting program as a privatized company. “These five B747s are aging. By 2015 they have to be replaced as they will be 21 years old already. They’re still good airplanes, but the maintenance costs are higher.”

Bautista said while the carrier could, on its own, push its refleeting program, “our capacity to compete [with other carriers] would be limited.” Delivery of new aircraft takes about two or more years after ordering so PAL’s new refleeting program needs to be finalized in the new fiscal year, which begins on April 2012 and ends in March 2013.

Other than the five B747s, PAL’s fleet also includes two B777-300ER, four Airbus 340-300, eight A330-300, 13 A320-200, and four A320-319.

The carrier is also counting on the US Federal Aviation Authority to upgrade the country’s safety status Category 1 status by November, which will enable it to expand its routes in the United States.

“We will back to Category 1 [status] Timing nalang. Maayos na,” the PAL president said. “Many of the needed reforms have been instituted by relevant government agencies. PAL itself will be undergoing a technical review then a technical audit by the FAA.”

A team from the FAA will be in town next week to assess the safety measures and equipment installed by the Civil Aviation Authority of the Philippines (which replaced the Air Transportation Office). The Aquino administration has predicted an upgrade in the country’s safety status to Category 1 by June.

Bautista said the carrier is considering an expansion in routes to San Diego, California; Seattle, Washington State; and New York, which hopefully can be mounted within the year. He added that once the country is back to Category 1 status, PAL can also resume its services to Europe, using its Boeing 777-300ER. The carrier will be taking delivery of two more Triple 7s and four Airbus A320s are arriving this year.

Following the FAA downgrade in 2008, the European Union had also banned Philippine carriers from flying there.

Bautista predicted a loss in fiscal year 2011 (April 1, 2011-March 31, 2012), a reversal of the $72.5-million profit recorded in FY 2010.

Bautista said the loss was due to the higher fuel costs, the labor strike, and lower passenger revenues from the Japan earthquake and tsunami as well as the floods in Thailand. The carrier reported a loss of $39.4 million from July to September 2011.

He said the carrier’s operations were “back to normal,” after flight disruptions were felt initially after it implemented its much-needed but controversial outsourcing program in October 2011. About 2,400 employees were affected by the outsourcing program.

(My piece was published on Jan. 20, 2012 in the BusinessMirror.)

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.

Her own moves

ON February 14, Valentine’s Day, the happiest girl in town was probably Cecile Ang, not because she had a special someone, but as owner of the Royce’ Chocolates brand locally, almost all the chillers in all of her stores were empty before that day was over. It just shows that Filipinos are die-hard romantics, and Royce’ is really one helluva popular chocolate brand over here.

Well, I must confess it is one of my favorite chocolate brands, as well. (The other one being Godiva’s dark chocolates. Mmmm.) I have probably gone through several boxes of Royce’ Nama Champagne, its bitter dark chocolates and the orange truffles. I even “steal” a couple of squares from my friend Ms. RP’s fridge whenever I pop over for a visit.

The first time I “met” Cecile was through a phone call years ago. She politely texted asking if I was free to take her call, and after I did tell her she could, she called me to ask my help in editing a lifestyle magazine/newsletter she wanted to put out for free.

I really didn't know who she was, but as I grilled her on the publication and why she wanted to put it out, and if she had enough funds to keep it afloat, it was only then that it dawned on me, as she humbly answered my barrage of questions, that she was the daughter of business tycoon Ramon Ang.

While I did turn down her offer to edit the magazine, I could tell she was a dreamer and had a lot of guts. I mean, who in her right mind would put out a free publication just because she wanted to write about food and lifestyle? But she sounded so positive about the whole idea, I wished her well. Gads, I wish I could be as positive as she was about the publishing industry.

When I finally met her in the flesh recently, she had already been running Diamond Hotel, a property her father acquired in 2005, just as Cecile had graduated from the Ateneo de Manila University with a degree in European Studies. I was so surprised how young she looked! The Filipino expression “pinabili lang ng suka” came to mind. With her hair tied in a neat ponytail, her slight frame and her face sans makeup, she could certainly pass for a teenager. But there she was, at the helm of a five-star hotel.

“I think it is definitely an incredible advantage [to have my father who he is]. Of course not everyone took me seriously, especially when I was new and looked like a high-school student. You’d hear comments like COO [‘child of owner’] from random strangers, but I don’t mind, because I really wouldn’t be where I am now if I weren’t that. I just have to work extra hard to make sure I don’t disappoint.”

Cecile says her father thought that the hotel would be “good training ground” as it would enable her to meet all sorts of people from all walks of life. “Plus at one point I was very much a foodie, so the hotel seemed like a good fit.”

She describes her first year in the hotel as “very colorful.” As it was her first job straight out of college, of course her father took care to make sure she was well prepared to take on the duties as a hotelier. Cecile spent a year training by going around the different departments and learning about the functions of each hotel employee, from the concierge to the food servers, from the chefs and their cook helpers to the general manager’s secretary. Now president of Diamond Hotel, she is in charge of setting the direction for hotel policy, and overseeing the renovations and expansions of the establishment.

“In a hotel you encounter all sorts of guests and colleagues that there was never a dull moment. Every day was a fun learning experience,” she says about her first year.

Cecile says her father, whose sheer business acumen has made it possible for San Miguel Corp. to expand beyond the food-and-beverage business, has never given her nor her siblings “formal pointers” on how to manage a business enterprise. “But I think he leads us by example. My dad works 24/7 and is incredibly generous and friendly to everyone. I see how much he values everyone around him and it has taught us, his kids, to try and give back as much as we can to everyone around us as well. And, of course, slacking off is not an option.” Typically Chinese, each one of her seven siblings, down to the youngest at eight years old, have had to work during their summer vacations.

Cecile says her favorite childhood memory was going to the “slalom car races every Sunday as my father was also a champion racecar driver. I loved being allowed to ride shotgun during races!”

To relax, she travels when she can, “I like getting lost in a city and following random strangers around. It helps me gain a new perspective on things. On a normal weekend, since I have a lot of young siblings, every Sunday is a movie+California Pizza Kitchen day.”

Like many incredibly busy career people, Cecile has shucked novels for magazines—“I think my attention span has gotten worse over the years...but I’m a big magazine subscriber: Time, Newsweek, Business Week, Economist, Fortune, Forbes, Elle Decor, Architectural Digest, Monocle, Mental Floss and Gourmet. And I try to read a short story from McSweeneys, Alfred Hitchcock or David Sedaris every night before I go to sleep.”

Asked if she still has plans beyond managing the hotel, Cecile says she still “[likes] the business.” But most definitely she has started to stretch her own wings by going into other industries. She started on this path in 2009 when she successfully bagged the right to bring in Royce’ to Manila.

I ask her if ever we would get to taste the incredibly delicious ice creams of Royce’, and she says: “We are planning to open a bigger shop that will have Royce’ ice cream and chocolate drinks and baked goods. We are just looking for an available space.” Whooopee!

She says she has other business prospects up her sleeve but declines to reveal what these are pending the conclusion of negotiations with partners. “I am also looking for new challenges and hopefully I can do that this year....I am planning to get into another business but I can’t disclose it as of the moment.”

A chip off the old block maybe, but Cecile’s moves are definitely all her own.

(My column, Something Like Life, is published every Friday in the Life section of the BusinessMirror. This piece was published on May 6, 2011. Photo courtesy Asian Dragon)

The happiest girl today

...must be none other than Cecile Ang, daughter of Ramon S. Ang, CEO of San Miguel Corp. Why you may ask? Well it's because Valentine's Day has been extremely kind to this exceptionally talented young lady, and no, I'm not talking about her love life.

Check this out:


This was taken at about 5 pm today at the Royce' outlet in TriNoma. Its chocolates are almost sold out. The sales girl told me this was the first time it's happened to them, and when I asked if there were any more stocks coming in, she said there would be some sent over by the Greenbelt 5 branch. But a media colleague said, he passed by that kiosk, and all its chocolates were sold out also! I espied some boxes in the TriNoma branch's chillers, but the sales girl said these were already reserved and paid for.

Whoa! Either there are a lot of smart boys/men out there looking to impress their girlfriends/wives/mistresses, or the ladies have become demanding and more discerning in their tastes. Ahem. Sorry boys, bawal na ang Goya, Toblerone, at Cadbury's ngayon. haha ;p

(Cecile Ang, Royce' Chocolates' local franchisee. She is also president of Diamond Hotel, which is owned by her father, San Miguel CEO Ramon S. Ang. Photo from Philstar.com)

Of course, Cecile is none other than the franchise owner of this uber-hot Japanese chocolate brand, which has outlets also at the Power Plant in Rockwell and at Robinsons Place in Ermita. Cecile knows I'm a great fan of Royce', and I usually buy the Nama champagne chocolate and its dark chocolate variants.

I asked her last November when she was bringing in the brand's equally delicious ice cream. In an email, she said, "We are planning to open a bigger shop that will have Royce' ice cream and chocolate drinks and baked goods. We are just looking for an available space."

Yay! Can't wait.

How now brown cow? (Updated)

(Senator Francis "Chiz" Escudero announces decision to leave National People's Coalition in a press conference held at Club Filipino in Greenhills, San Juan City on October 28, 2009. Photo from Chiz web site)

FOR the entire day yesterday, my friends on Facebook were all a-twitter, analyzing, dissecting, and even dissing Sen. Chiz Escudero's announcement of his resignation from the Nationalist People's Coalition. It obviously caught most of his partymates off-guard. Even NPC vice-presidential candidate Loren Legarda seemed mightily pissed at the turn of events, considering how she has been lusting after the presidency. Too bad she had already declared herself as a VP candidate.

Even Rep. Mark Cojuangco, son of NPC founder and businessman Eduardo "Danding" Cojuangco, sounded testy saying that the senator never told him that he was leaving the party, and that he was only hearing about this from the reporter who was asking for his reaction. He sounded incredulous as if the reporter was telling him something preposterous.

While Inquirer's headline on its website this morning is Escudero junks NPC, Cojuangco, it has been apparent for quite sometime that it was Cojuangco who actually junked the presidential wanna-be. Rumors have been going around in the last few months that the Boss, as Cojuangco is called, was not too enthusiastic about financing Escudero's presidential bid.

(Eduardo "Danding" Cojuangco, Jr.)

Cojuangco's rumored P200-M allocation to Escudero is what it appears to be - token support. Just so it won't be said that the Boss didn't fund his party's own presidential candidate. But if you look at the situation closely, Cojuangco really doesn't need to bet on Escudero or perhaps any other presidential candidate for that matter. He already has cornered the coco levy funds. He got back San Miguel Corp., which is now diversifying and expanding its reach beyond its normal food and beverage concerns. So what other favors does he need to curry from any presidential candidate? (The other rumor is that Cojuangco BFF and SMC president Ramon Ang had convinced the NPC chair to just fund their congressional candidates. Besides, its cheaper.)

For another, Escudero has shown poorly in survey after survey. As a presidential candidate, the highest rating he got compared to his possible rivals was 23%, as per the Social Weather Stations polls, and this was in Feb. 2009. His rating then slipped to 15% in May, rose to 20% in June, before dropping back to 15% in Sept. when Sen. Noynoy Aquino already entered the picture. So Escudero never got a rating that was convincing enough for potential financiers to back him.

Although we hear that beer and tobacco magnate Lucio Tan is ponying up for Escudero's presidency, we also know that the former is a segurista and will likely contribute to everyone who is running for president. It's called political hedging. But with Tan's businesses struggling with financial burdens (e.g. PAL for instance reported a $31-M loss in Aug. and is cutting jobs), the Chinoy tycoon won't be able to give Escudero enough funds to mount a decent and serious presidential campaign.

When the group of political campaign strategist par excellence Lito Banayo joined the Chizwiz campaign, everyone felt, including myself, that the group would energize the Chizwiz campaign. But by Oct. 23, Saturday, I heard that Malou Tiquia, Escudero's senior campaign strategist had "resigned". To those who don't know, prior to her joining Escudero's campaign, Tiquia was with Sen. Mar Roxas. She had been one of those behind the brilliant Mr. Palengke strategy. Now, there could only be one reason why Tiquia would disengage from Escudero, my source noted. That meant no campaign funds were forthcoming. (One of Escudero's handlers told me Tuesday, however, that Tiquia didn't resign; her contract just wasn't renewed. Accdg. to him, "maraming syang kaaway sa loob.")

Of course, prior to this, former senator Serge Osmeña had resigned as Escudero's campaign manager (w/c is why it was necessary to bring Banayo in), and announced he was rejoining the Liberal Party to support Sen. Aquino's presidential bid. Advertising guru Yolly Ong, who was said to have ties to the Aquinos as well, also left.

(Beer and tobacco magnate Lucio Tan, a personal friend of Escudero's father, Rep. Sonny Escudero.)

Now with all due respect to Escudero's current handlers whom I really respect and his own father who I am especially fond of, there's a simple reason why Escudero has been rating poorly in the surveys. It's not from lack of media exposure. In fact, I think he's all over the place. And I'd like to dispel Escudero's assumptions that his connection to Danding's iffy politics is an issue for voters. It is really not. But he does rub people off the wrong way. Especially the ones older than 50 years. Even my 81-year-old mother describes him as "hambog". Apparently, he is not someone who brings out the mother instinct in women.

Among those in his age group, the 40-somethings w/c I belong to, he comes off as a brash, arrogant, know-it-all, who is long on his answers, but actually short on substance. He speaks in a monotone, unblinking, as if he's got all his answers memorized, w/c he regurgitates as the need arises. His lines are cleverly-written and well-rehearsed. (e.g.“Whoever is planning to run for president of the country should have no allegiance to any party—NPC, LP, PMP, Lakas or whatever. The party that anyone is aspiring to run under should be none other than the Philippines, and his party mates should be all Filipinos.") They are ready-made soundbites for the public and media's consumption, but devoid of any sincerity. There is no heart, no soul, just lots of empty rhetoric.

Fortunately for Escudero, he has the youth (18-30 somethings) eating out of his hand. But are these youth supporters that numerous for him to be able to mount a presidential bid without funds? Remember, if one is to gun for a national elective post, he has to have poll watchers in almost every major precint in the entire Philippines! Even the announcement of support by the Magdalo group was met with skepticism. Just how many are the Magdalos and their supporters anyway?

And for all his posturing, Escudero is certainly no Barack Obama who was able to mount a new kind of politics that cut across all age groups, sexes, and ethnicities. (Yet, even Obama had major financial backers like Oprah Winfrey, a whole slew of celebrities, and major businessmen.) So I'm not quite sure where Escudero is headed. For all the youthful idealism that he projects, I don't think he is naive to believe that he will be able to run for president without some massive capital infusion. Unlike Obama's one-dollar campaign, Escudero can no longer mount a piso-piso campaign from the public bec. Aquino's handlers have already beaten him to the punch.

If at all, Escudero will probably run for VP, with who as president, I don't really know. There are three presidentiables still without a running mate, i.e. Gilbert Teodoro, Manny Villar, and Dick Gordon. And for all his self-righteous anti-corruption schtick, some people think Escudero may still run with Gibo or Villar as president. (Gordon's chances are iffy, at best, and lack of funds is also a problem.) I believe it will all boil down to campaign financing and who will be able to give it to him. Although VP Noli de Castro was said to have been persuaded by Villar to be his runningmate, we are hearing that certain ahem, promises made to Kabayan have yet to be fulfilled, w/c is why there is still no announcement from the latter. So the Villar window is still open for Escudero to swing through. As Executive Secretary Eduardo Ermita says, "in politics, anything is possible."

Or maybe Escudero will give the Philippines a break and as Sen. Mar Roxas has already said and done, put "country above self." What is direly needed by this country is for the Opposition to unite against the PaLaKa/administration's immense political machinery. Escudero, if he is really sincere in wanting to serve the people's interests, should set aside his childhood ambition to run as president for the meantime, or even as VP. (He has lagged in the polls as VP candidate as well.) He's young, he still has a long road ahead of him. He can still be of service to the public as a senator. Besides, he cannot deny the growing force in popularity of the Aquino-Roxas tandem. Politics is a lot about incredible timing. And for Escudero, unfortunately, this isn't the right time for his run.

To close, I am, aghast that Escudero, in his interview last night with Che-Che Lazaro's Profiles on ABS-CBN had the gall to say that Cojuangco never lifted a finger to help him in his past candidacies ("walang naitulong" was his exact words). This not only smacks of ungratefulness, but is a bald-faced lie. As one reporter commented to me, "what about the frequent use of SMC's Learjet? That's gotta count for something." So there.

* * * *
FOR the whys and wherefores of Escudero, read Lito Banayo's column here. It is his last entry, he says, because of his having joined the Escudero campaign. So yes, Chizwiz is still going to run, for what position, we don't know. (Yadayadayada.) Too bad. Many readers, including myself, will certainly miss Mr. Banayo's astute political observations in his column. Good luck with the campaign po.