Passengers, airlines to lose 115 B a year due to flight delays in PH

San Miguel Holdings Corp. said the combined passenger productivity losses and annual losses for airlines could rise to as much as 115 billion a year from 2020 if the government will fail to approve new

airport projects.

San Miguel is proposing to build the Bulacan International Airport which the Department of Transportation (DOTr) is now targeting to award by the end of the year amid pressures from lawmakers and other stakeholders.

Transportation Secretary Arthur Tugade was recently put on the spot during the Senate hearing on the Xiamen Air incident and was asked about the construction of new airports that can be the alternative for the highly congested Ninoy Aquino International Airport (NAIA).

"We are now rushing the process. Our target is to finish the process by the end of the year," Tugade said.

San Miguel, on the other hand, still maintained that its project proposal is "a game changer" and the "solution" to the country's growing airport dilemma.

"San Miguel is financially capable of handling the $15-billion project cost," San Miguel said in a presentation. "[This project] needs no funding from the government."

NAIA is currently operating well over its capacity and with the economy expected to grow by six percent year-on-year over the next five years, passenger arrivals are also seen to increase.

By 2020, passenger arrivals could reach 49 million a year from 37 million this year. This will increase further to 107 million passengers a year by 2040 and 146 million by 2050.

"Congestion has a price tag," San Miguel said, revealing its own estimates on how much flight delays could cost.

It said that right now, delays could be equal to annual losses of 11.1 billion for airlines and 12.8 billion in terms of passenger productivity losses. Combined, this could grow to annual losses of 115 billion by 2020 if no expansion will be made.

San Miguel said that its airport project has a 200 million pax capacity and could meet a six-year timeline from approval. In five years of construction, it promised to be able to finish two operational runways.

San Miguel is already finalizing the concession terms for its proposed airport project. This was after the DOTr submitted the revised draft concession agreement with inputs from the National Economic and Development Authority (NEDA) and Department of Finance.

After the terms have been finalized, the Swiss Challenge process will begin.