Dog­fight over Hawaii: PAL leaves United be­hind with bet­ter seats, ameni­ties

The Philippine Star - - BUSINESS - VIC­TOR C. AGUSTIN

Philip­pine Air­lines started field­ing yesterday the first of its new re­con­fig­ured A330 planes for the Manila-Honolulu route, with the flag car­rier of­fer­ing roomier seats, bet­ter ameni­ties, and keener fare struc­ture than United, the lone US car­rier serv­ing the same route.

Here, in these com­par­a­tive seat statis­tics, is the proof: In ad­di­tion to ly­ing fully-flat, PAL’s new busi­ness class seats have firm­ness ad­just­ment and mas­sage func­tions, which, ac­cord­ing to the flag car­rier's an­nounce­ment, is a first in the re­gion. (Trans­la­tion: PAL beat even the class-lead­ing Cathay Pa­cific and Sin­ga­pore Air­lines in of­fer­ing such in­flight pam­per­ing.)

PAL flies non-stop to Honolulu, while United stops over in Guam in both di­rec­tions. Non-stop flights nor­mally, natu- rally charge more.

Strangely, United even on its web­site quotes a higher fare struc­ture on all three classes than PAL, which even has to split its fees with code-share part­ner Hawai­ian Air af­ter the lat­ter gave up the profit-chal­lenged route.

United, for ex­am­ple, was ear­lier this week quot­ing on its web­site a one-month busi­ness round-trip pas­sage for $3,930 against PAL’s $3,633.

For pre­mium econ­omy, the United web­site was quot­ing $2,001 for the same travel dates, June 15-July 15. PAL’s was $1,872.

And for a last-minute econ­omy fare for the same du­ra­tion, it was $1,445 for United ver­sus $1,330 for PAL.

Tabloid thriller at Makati Square

Amid the DU30 threat to force the re­turn of the Mile Long Ar­cade to the gov­ern­ment, the seño­ras who con­trol the mall have un­der the radar been en­larg­ing their foot­print in the con­tested neigh­bor­hood, emerg­ing as the new own­ers of the shut­tered Plaza Fair/Fair­mart de­part­ment store space in the Makati Square.

On record, it was the con­do­minium cor­po­ra­tion that had foreclosed Plaza Fair/Fair­mart for al­leged non-pay­ment of as­so­ci­a­tion dues.

It has now emerged that the own­er­ship has since been trans­ferred to Var­sun Plaza, Var­sun be­ing a re­verse play on “Sun­var.”

How the Plaza Fair/Fair­mart unit was qui­etly trans­ferred from the as­so­ci­a­tion to a new pri­vate cor­po­ra­tion out­side the reach of the other share­holder-cousins reads very much

Again, I com­plained to PAL pres­i­dent Jimmy Bautista about my ex­pe­ri­ence in Ter­mi­nal 2 dur­ing my last trip to Sin­ga­pore. So I asked him what has hap­pened to his plans to in­vest in a ter­mi­nal up­grade. Well, he softly said he is wait­ing for a re­sponse from DOTr and MIAA.

Jimmy wouldn’t go fur­ther be­cause as he said, he is wait­ing for a re­sponse. But wait­ing for a re­sponse from a gov­ern­ment agency like DOTr is like wait­ing for Godot. I hon­estly thought Sec Tu­gade would be dif­fer­ent, but I have yet to see ev­i­dence to jus­tify my high ex­pec­ta­tions of him.

Since Jimmy won’t give de­tails, I have to go find out from sources in­side the trans­port of­fices who are also frus­trated with how they are han­dling things. All I got this time was a copy of a let­ter Jimmy wrote to MIAA GM Ed Mon­real dated May 10, 2017. It is enough.

This let­ter was fol­low­ing up on pre­vi­ous meet­ings with trans­port of­fi­cials, the lat­est be­ing Feb. 15, 2017. That meet­ing was at­tended by Sec Tu­gade and Avi­a­tion Usec Skee Ta­mayo.

I am sure Sec. Tu­gade was enthusiastic about the PAL pro­posal. He is al­ways enthusiastic about projects like this, as he should be. The prob­lem is trans­lat­ing that en­thu­si­asm into ac­tion. Fe­bru­ary to May should be enough time for a feed­back. Ac­cord­ing to Usec Skee, he just re­ceived the let­ter from Mon­real the other day. Ba­gal ng mail ser­vice nila.

Ac­cord­ing to the let­ter, Philip­pine Air­lines pre­sented to Tu­gade and Ta­mayo pre­lim­i­nary devel­op­ment plans for im­prov­ing T2 and the ex­pan­sion to the north of T2 to de­velop a mod­ern pas­sen­ger ter­mi­nal com­plex. This will ac­com­mo­date more than a dozen new long-range wide-body air­craft that PAL has or­dered and will be de­liv­ered later this year.

The pro­posed new ter­mi­nal com­plex is es­ti­mated to cost P20 bil­lion. It will have 18-17 gates and its con­struc­tion is of ut­most ur­gency to PAL and the air­line’s pas­sen­gers. Bautista is con­fi­dent that with gov­ern­ment sup­port, they can break ground by De­cem­ber 2017 and com­plete the new ter­mi­nal by De­cem­ber 2020.

The pro­posal in­volves MIAA leas­ing needed prop­er­ties to PAL. The re­quest was made as early as March 13, 2015, fol­lowed up April 10, May 22 and Oc­to­ber 21 in 2015 (all dur­ing Abaya’s watch at DOTC) and on Feb. 17, 2017 to Tu­gade.

For back­ground, T2 was built in 1999. Its orig­i­nal de­sign ca­pac­ity is nine mil­lion pas­sen­gers an­nu­ally (MPA) and in­tended for do­mes­tic op­er­a­tions. It was con­verted to han­dle in­ter­na­tional pas­sen­gers with de­sign ca­pac­ity mod­i­fied to han­dle 7.5 MPA or five mil­lion for do­mes­tic and 2.5 for in­ter­na­tional.

As of 2016, PAL han­dled 13.2 mil­lion pas­sen­gers – 6.2 mil­lion in­ter­na­tional and seven mil­lion do­mes­tic. About three mil­lion of PAL’s do­mes­tic traf­fic went through T3 while 400,000 in­ter­na­tional pas­sen­gers went through T1. Ar­rival of trans-Pa­cific flights use T1 as T2 can no longer han­dle the vol­ume.

With the de­sign ca­pac­ity sig­nif­i­cantly breached, the re­sult­ing con­ges­tion has been af­fect­ing PAL’s ser­vice qual­ity. The im­age of both PAL and the coun­try is ad­versely af­fected. This is likely to per­sist as the econ­omy grows and gov­ern­ment can’t fig­ure out what to do next. Not a good way to “Ex­pe­ri­ence the Philip­pines.”

Jimmy’s let­ter to NAIA’s Mon­real pointed out that “the de­sign ca­pac­ity of the en­tire NAIA (T1 to 4) has ac­tu­ally reached its limit of 31.5 MPA. The to­tal pas­sen­ger through­put is 39.6 MPA as of 2016.” Ad­di­tional con­straint is the run­way ca­pac­ity.

The long term plan is to have a new al­ter­nate ma­jor en­try port or ports in Lu­zon. But based on what we are see­ing now, noth­ing will hap­pen in the near term to al­le­vi­ate a de­per­ate sit­u­a­tion...

In its re­cent pre­sen­ta­tion of its mid term plan (2017-2025), DOTr talks of ex­pand­ing NAIA so it can ac­com­mo­date up to 50 MPA. Pero puro Power Point Pre­sen­ta­tion (PPP) pa lang.

PAL is des­per­ate, as it should be. It talks of want­ing to be a five star air­line but in­stead is listed among the re­gion’s more un­de­pend­able due to fre­quent de­lays ow­ing to NAIA con­ges­tion. Jimmy says PAL wants to be part of the so­lu­tion and this is why they of­fered to bankroll this ex­pan­sion.

We can only agree with the ob­jec­tives of PAL’s pro­posal that Jimmy out­lined in his fol­low-up let­ter to Mon­real. First is to max­i­mize pas­sen­ger com­fort and con­ve­nience while eas­ing con­ges­tion at T2; op­ti­mize the lim­ited re­sources avail­able for air­port users; max­i­mize as­sets to ex­pand NAIA ca­pac­ity; en­hance NAIA as the Philip­pines pri­mary in­ter­na­tional gate­way and ac­com­mo­date more than a dozen of PAL’s new wide-bod­ied air­craft to be de­liv­ered start­ing late 2017.

By do­ing noth­ing, qual­ity of ser­vice will worsen as traf­fic in­creases. PAL ex­pects its pas­sen­ger growth to av­er­age 7.3 per­cent for in­ter­na­tional and 8.7 per­cent for do­mes­tic be­tween 2016 and 2020. They es­ti­mate this will mean about 13 MPA in 2016, grow­ing by an es­ti­mate of 40 per­cent by 2020 or ap­prox­i­mately 20 MPA.

PAL now has 81 air­craft in op­er­a­tion and has 40 new ones on or­der. This is why PAL is ex­tremely wor­ried about where to even park these planes.

Jimmy said in his let­ter that “PAL had taken a look at the avail­able op­tions and found out that there are still siz­able idle prop­er­ties ad­ja­cent to T2 which can be used to ex­pand the ter­mi­nal build­ing and in­crease its ca­pac­ity, in­clud­ing the num­ber of gates.

“These are the 12.9 hectares that in­cor­po­rates what was for­merly oc­cu­pied by Nay­ong Pilipino where the Philip­pine Vil­lage Ho­tel is. It also in­cludes the 9.8 hectares that is con­sid­ered Pag­cor prop­erty. PAL is of­fer­ing a long term lease from the gov­ern­ment of these ad­ja­cent lands for the ex­pan­sion pro­posal.”

Pre­lim­i­nary stud­ies done by PAL de­picts a pas­sen­ger-friendly ter­mi­nal build­ing with a to­tal floor space of ap­prox­i­mately 90,000 square me­ters for the T2 An­nex de­signed with 11-12 wide-body air­craft gates. The pro­posed T2 an­nex is in­tended to han­dle ap­prox­i­mately 14 mil­lion pas­sen­gers yearly.

Cur­rently, T2 has 73,000 sqm in floor area with 12 bays with aer­o­bridges. In ad­di­tion there are re­mote park­ing bays. For the va­cant land that is cur­rently used as park­ing lot by MIAA, PAL plans to re­de­velop it as a park­ing build­ing with fa­cil­i­ties and ameni­ties to en­hance con­ve­nience of trav­el­ers.

They are look­ing at leas­ing the 12.9 hectares for 30 years, ex­clu­sive of 3.5 years for con­struc­tion pe­riod.

I think PAL’s pro­posal makes sense. Aside from the pub­lic con­ve­nience of­fered by new fa­cil­i­ties, it makes pro­duc­tive use of idle as­sets, in­creases the ca­pac­ity of NAIA with­out cost to the gov­ern­ment and it will be made avail­able in the next 3-4 years.

From what I have heard, there are some le­gal prob­lems with the own­ers of the old Philip­pine Vil­lage Ho­tel which had been non-op­er­a­tional for a long while. Sec. Tu­gade has to use the much promised Duterte po­lit­i­cal will and use all the co­er­cive pow­ers of the state to re­claim the prop­erty so it can be used for pub­lic good.

The ho­tel’s own­ers were Mar­cos cronies and prob­a­bly got a sweet­heart deal any­way. And they owe the gov­ern­ment a bun­dle in un­paid taxes. The Pag­cor prop­erty ac­qui­si­tion only re­quires a memo from Mala­canang.

The need is ob­vi­ous (an emer­gency, even) and the so­lu­tion is be­ing of­fered on a sil­ver plat­ter to gov­ern­ment. If Sec. Tu­gade can­not act on this won­der­ful pro­posal speed­ily, we should per­ish the thought he can fix MRT 3 and im­ple­ment more com­pli­cated projects like sub­ways and pi­o­neer­ing long dis­tance train lines.

It is time for Sec Tu­gade to show what he can do… what he is made of. I had high hopes for him. I don’t want to be proven wrong.

Boo Chanco’s e-mail ad­dress is bchanco@gmail.com. Fol­low him on Twit­ter @boochanco

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