Friday, August 22, 2014

San Miguel Expects Decision on Philippine Airlines in Two Weeks

San Miguel Corporation is expected to make a decision within the next two weeks as to whether it will sell its remaining stake in Philippine Airlines, or buy out business partner Lucio Tan. Although Tan has stated that he wishes to buy out San Miguel, it remains unclear whether Tan will be able to generate the funds required.

Copyright Photo: Paul McCarthy/
The San Miguel Corporation currently owns 49 percent of the holding company that controls 90 percent of Philippine Airlines, with an estimated market value of $3.2 billion. While Lucio Tan owns 51 percent of the holding company, management control of the airline is in the hands of San Miguel Corporation.

With Philippine Airlines posting a profit in the most recent quarter, many believe that San Miguel stands to earn some profit on the deal with the Tan family. It is presently rumoured that both sides have agreed on a deadline for the buyback, which is set to fall sometime next week, with a transaction amount of at least $1.5 billion. 

San Miguel initially spent $500 million to purchase its 49 percent stake in Philippine Airlines. However, the conglomerate has advanced an additional $800 million over the last two years, primarily to cover the airline's fleet modernization program. That represents an overall investment of approximately $1.2 billion, which if the rumoured price of $1.5 billion is true, San Miguel stands to earn at least $200 million on the transaction. 

The recent profits posted by Philippine Airlines are highly attributed to the success of San Miguel Corporation to bring down the carrier's operating costs, primarily fuel and maintenance. These costs used to account for 55 percent of PAL's total annual costs. However, with the introduction of new aircraft, San Miguel has been able to reduce the cost down to 47 percent of total expenses. It is believed that these costs will go down further as more fuel-efficient aircraft enter the fleet. 

According to PAL President Ramon Ang, if San Miguel Corporation does exit the airline business, he will be left to focus on other existing businesses in the conglomerate's portfolio. "In two weeks, something will happen for sure and we will know the outcome," said Ang. "If ever we exit, we have many existing businesses. Then, I will concentrate more on our food business."

Media reports have suggested that the Tan group is displeased with several of San Miguel's management decisions at Philippine Airlines, including the cost of an early retirement package for ageing Philippine Airlines employees. Meanwhile, the prospects for Philippine Airlines does look brighter as the opportunity for expansion in the United States and the European Union is now an option after restrictions were lifted earlier this year. 

Philippine Airlines has been eager to recapture market share that it has lost in recent years to arch-rival Cebu Pacific, the nation's largest low cost carrier. PAL recently posted a profit of P1.46 billion for the second quarter of 2014, reversing a loss of P1.06 billion the previous year. Ang says that the company continues to post a profit even up to the end of July and he believes that the trend is likely to continue. 

If San Miguel does retain control of Philippine Airlines, Ramon Ang will be free to continue executing his plan to restore Philippine Airlines as one of the prominent carrier's in the region. As early as 2012, Ramon Ang had previously disclosed to a foreign publication that San Miguel was planning to take Philippine Airlines through a complete change of course and innovation. At the time, Ang committed to investing as much as $8.5 billion in Philippine Airlines over the course of the next ten years leading up to 2022.

If Ang manages to hold on for that long, he is likely to enjoy competing in not only a common aviation market in the ASEAN region, but also what will become the heaviest air traffic in the whole world in the Asia-Pacific region, as predicted by aircraft manufacturers and the world airline industry. There is indeed much to gain, but also much to lose if the right moves are not made over the next decade. 

Philippine Government Spends More on Elections than Airports

Senate President Pro Tempore Ralph Recto has once again called the Philippine government into question once again after the Commission on Elections proposed a budget of P16.8 billion for 2015. According to Recto, the proposed P11.4 billion in new equipment for the Commission on Elections is nineteen times larger than the proposed P592 million for the expansion of Ninoy Aquino International Airport.

Image Source: Wikimedia
The Commission on Elections is currently preparing for the next elections and is planning to purchase more than 40,000 counting machines, which according to the senator, is money that could be used for more important infrastructure and services. Recto is calling on the Committee on Finance to research how the cost of holding elections could be reduced. 

The P16.8 billion budget for 2015 is six times higher than the P2.8 billion budget allocated in 2014. According to Recto, it is "a high price we're being told to pay to have clean elections in 2016." He added that the P11.4 billion proposed budget is twenty-eight times the amount that government pays Department of Health doctors and two and a half times the total senior citizens pensions covering 739,000 elderly. 

The Commission on Elections will use P3.76 billion to purchase 41,800 precinct count optical scan machines at a cost of P90,000 each. Meanwhile, the Ninoy Aquino International Airport continues to be ranked as one of the worst airports in the world. Most recently, passengers have been suffering in a number of the terminal buildings due to cramped conditions, long queues, and inadequate cooling systems. In addition, the airport is highly congested and is in need of an additional parallel runway and upgraded navigational equipment. 

KLM Features Boracay Island in World Business Class Advertisement

In the midst of its transfer from Terminal 1 at Ninoy Aquino International Airport to Terminal 3, KLM Royal Dutch Airlines has introduced a new advertisement featuring its new World Business Class set in the tropical paradise of Boracay Island.

klm world business class
Image Source: KLM / Facebook
Air France-KLM Group are investing over €1 billion in product and service upgrades by 2017 as part of overall efforts to improve customer service. In addition, €200 million will be spent on new cabins for KLM.
Last year, KLM introduced its newly redesigned cabins and World Business Class aboard its Boeing 747 fleet. The carrier recently completed the overhaul of its Boeing 747 cabins in May and now plans to introduce the new cabins on its Boeing 777-200 fleet.   

"We are one of the first airlines to use a designer, not only for the seats, but really for the entire cabin," said Femke Kroese, Air France-KLM Commercial Director for Canada. "She was responsible for everything, from the curtains to the pillows, the whole cabin."

The Dutch designer was Hella Jongerius, whose works have been exhibited at high profile venues such as the New York Museum of Modern Art. The goal of the new design is to make passengers feel more at home when flying on board KLM. In addition, passengers in World Business Class will receive new amenity kits designed by Dutch fashion designers Viktor & Rolf. 

klm world business class
Image Source: Conde Naste Traveler
The new seats in Business Class measure 207 centimetres when reclined to the full flat position. "It's really all about comfort and privacy," said Kroese. "We wanted to create a personal space in the cabin for the passengers." She added that the seats are one of the biggest in the industry, with the positioning and partition between television screens designed to enhance privacy for passengers.

The seats being used by KLM for Business Class is the Diamond Seat manufactured by B/E Aerospace. Though a number of other carriers utilise the same seat on board their aircraft, KLM representatives are quick to point out that a fair amount of customisation has taken place, especially with the configuration. 

"It is true that other airlines have the Diamond seat, but our new seat is not the same," said Erik Varwijk, KLM Managing Director. "Our seat is better than Lufthansa's, for instance. Lufthansa's seat is 1.98m long, while ours is 2.07m. Our seats are parallel, not in a "v" position, and our seat back screens are 17 inches, not 15 inches."

klm world business class
Image Source: Conde Naste Traveler
Adding to the comfort and space is the introduction of increased storage space, with compartments installed in the seats, both beside the passenger and under the television screens. The in-flight entertainment system remains the same with the Panasonic 3000 system. However, as noted earlier, the seat back screens have increased in size to 17 inches. 

Perhaps one of the most innovative and unique concepts of KLM's new World Business Class is the incorporation of sustainable environmental practices into the design. According to Kroese, the new Business Class design features carpets that have been made in part from fibers of former KLM flight attendant uniforms. 

The New KLM World Business Class
  • Reduced number of seats in the cabin
  • 180 degree seat recline to a full-flat position
  • 6 foot 8" bed length
  • 17" personal entertainment screen
  • 1 universal power port outlet
  • Male and Female amenity kits designed by Dutch designer Viktor + Rolf
  • Blankets, cabin curtains, pillows, and carpeting made from recycled KLM flight attendant uniforms
  • Special privacy dividers and cabin interior design by Dutch designer Hella Jongerius
  • Tableware and crockery for in-flight service designed by Dutch designer Marcel Wanders
  • A mini Delft ceramic house collectible gift filled with Bols Genever spirits

Cebu Pacific Expected to Launch Saudi Arabia Flights before 2015

Cebu Pacific, the nation's largest low-cost carrier, is expected to launch flights before the end of the year to Dammam and Riyadh, according to a recent report released by the Centre for Aviation. The Kingdom of Saudi Arabia has been one of the key target markets for Cebu Pacific's long-haul network because of the large population of overseas Filipino workers. 

Copyright Photo: Lester Tangco/PPSG
According to the Centre for Aviation, Cebu Pacific already has the traffic rights necessary in order to operate up to seven weekly flights to Riyadh, and unlimited flights to Dammam, an open skies designated airport by Saudi Arabian authorities. Though the carrier could use a portion of its seven weekly entitlements to serve Jeddah, that decision seems unlikely given that the airline sees larger markets in Dammam and Riyadh.

Alex Reyes, General Manager of Cebu Pacific's Long Haul Division noted that the high concentration of overseas Filipino workers attracted the airline to consider expanding operations further in the Middle East. However, the carrier will have to sustain fierce competition from rival carrier, Philippine Airlines.

Philippine Airlines has responded aggressively to the launch of Cebu Pacific's long-haul division since its first flight last year. At the same time that Cebu Pacific entered the Dubai market, its first long-haul destination, Philippine Airlines responded with new flights to Dubai and Abu Dhabi. In addition, PAL launched services to Riyadh and Dammam ahead of Cebu Pacific. 

However, in spite of stiff competition from Gulf carriers and Philippine Airlines, Cebu Pacific seems ready and prepared to weather the storm. According to the Centre for Aviation, Philippine Airlines is the carrier most likely to retreat as it continues to be held back by a dispute over the future ownership structure of the flag carrier.

Of the 21 weekly entitlements permitted in the Saudi Arabia-Philippines Air Services Agreement, Philippine Airlines holds fourteen entitlements, while Cebu Pacific holds just seven. It is most likely that Cebu Pacific will use all seven entitlements to Riyadh, though the carrier is expected to introduce service before the end of this year most likely with three weekly flights each to Riyadh and Dammam aboard its 436-seat Airbus A330-300.

According to Reyes, Cebu Pacific can launch Saudi Arabia flights within a few weeks from the date that the carrier gets the approval of regulators to begin ticket sales. The airline is hopeful to launch the new routes by November or December in time for the peak holiday season. 

When launched, Dammam and Riyadh will become the third and fourth destination for Cebu Pacific in the Middle East. The carrier currently operates service to Dubai and is planning to launch flights to Kuwait on September 2 with three weekly flights. However, Philippine Airlines is also due to increase the frequency of its Riyadh and Dammam flights, with plans to add new flights to Jeddah three times weekly. 

Meanwhile, Cebu Pacific has been considering supplementing its Dubai service with flights to Abu Dhabi. However, the carrier now sees more potential in Sharjah, due to the feeder opportunities with partner carrier, Air Arabia. But Cebu Pacific will need to secure additional traffic rights to the United Arab Emirates before any such expansion could proceed. 

Now that Cebu Pacific realises the lucrative opportunities available by pursuing feeder traffic and connections with partner low-cost carriers in the Gulf region, it may pursue partnerships in both Kuwait and Saudi Arabia. In Kuwait, Cebu Pacific could consider partnering with Jazeera Airways, which features 15 routes from Kuwait, while in Saudi Arabia, Cebu Pacific could partner with flynas. 

In the meantime, Cebu Pacific is focused on launching its newest long-haul flights to Kuwait and Sydney, Australia next month. Sydney flights will begin on September 9, bringing the carrier's total number of long-haul destinations to three cities after Dubai and Kuwait. However, according to the Centre for Aviation, Cebu Pacific's new long-haul service is still too new to determine if it will be a winner in the long-term. 

Cebu Pacific to Enter US Market Starting in Guam

Following the lifting of the Category 2 US aviation restrictions earlier this year, Cebu Pacific, the country's largest low cost carrier, is planning to launch its operations to the United States beginning with flights to Guam. Cebu Pacific has been eyeing US operations for quite some time as the carrier seeks to expand and compete with rival carrier, Philippine Airlines.

Copyright Photo: Angelo Agcamaran/PPSG
According to Alex Reyes, General Manager of Cebu Pacific's Long Haul Division, the carrier plans to enter the US market through Guam and Hawaii. "Since we started our long-haul operations, we announced that we are interested in markets that have a huge concentration of Filipinos, such as Saudi Arabia and the US."

Reyes added that applications were already submitted to the United States for an operating permit. "We applied for our operating permit to fly to the US two months after the Federal Aviation Administration lifted our status to Category 1," said Reyes. 

Cebu Pacific has already obtained clearance from the US Department of Transportation to operate flights to Guam, Saipan, Honolulu, San Francisco, and Los Angeles. "We are particularly interested in two of those destinations: Guam and Honolulu," said Reyes. "We want to reach destinations through non-stop operations via our Airbus A320 for Guam and Airbus A330 for Honolulu."

Although no plans or definitive timelines have been released by the carrier, the CAPA Centre for Aviation released a recent report stating that Cebu Pacific is planning to launch service to Guam by the end of the year. However, CAPA also noted that service to Hawaii may take longer as Cebu Pacific needs to first secure approvals for extended range twin-engine operations for its A330 fleet. 

The Centre for Aviation believes that Honolulu could be a challenging destination from a competitive viewpoint as Philippine Airlines is also planning to expand its Manila to Honolulu flights from four weekly flights to daily service before Cebu Pacific even enters the market. It is believed Cebu Pacific will enter the Honolulu market sometime in early 2015. 

Meanwhile, Cebu Pacific is still several years away from serving the United States west coast cities as it continues to research and evaluate possible options for long-haul aircraft. The carrier is apparently evaluating a number of aircraft including the Airbus A350, Boeing 787, and Boeing 777. "We are always evaluating aircraft acquisition since we are in constant touch with airframe manufacturers," said Reyes. "As an airline, we are continually studying opportunities for further growth."

Restaurant Reviews: Sweet Chili - Amazing Thai Food

Copyright Photo: The Paranoid Traveler/PFN
I’m basically a fan of Asian cuisine but for some strange reason, Thai food and I have never really clicked. I don’t hate it but I’d rather have something else if I had a choice. I only eat it when I am with company that is craving for it or there’s a new restaurant that happens to be Thai as was the case with Sweet Chili.

Copyright Photo: The Paranoid Traveler/PFN
Sweet Chili is the newest restaurant of the Gerry’s Group of Companies, which is famous for its flagship restaurant, Gerry’s Grill.

Copyright Photo: The Paranoid Traveler/PFN
If nothing else, it had me with its interior design making it distinct from its competitors that look like a tourism brochure.

The restaurant has very limited choices with a two-sided legal-sized board menu which helps making decisions easier. Now before we go on, let me have a disclaimer here: my family and I are no experts in Thai cuisine although we have been to Bangkok years ago (like in the 20th century) and have not been back since. We can’t even remember what we ate there, though I do remember fending off crocodile soup as I am not that adventurous. So the comments here are based only on our experience of eating at self-styled Thai restaurants in Manila, Hong Kong, the US and Australia.

Pad Thai plain noodles
Copyright Photo: The Paranoid Traveler/PFN
As pad thai (stir-fried noodles) is a menu staple, it was the first in our order. It tasted like Hong Kong beef hofan noodles but without the beef. Instead, there were bean sprouts and tofu. But between the hofan and pad thai, I’d go for the former. I didn’t hate the pad thai, mind you, but it was just too ordinary for an Asian like me who’s eaten a lot of varieties of noodle dishes. Sweet Chili calls it plain noodles because you can opt to have it served with scrambled egg covering it like a cocoon.

Deep-fried king fish with green mango shreds and crushed peanuts
 Copyright Photo: The Paranoid Traveler/PFN
This was marked as a house specialty so we gave it a try and Sweet Chili is not exaggerating. The mango relish complemented the dryness of the fried fish with its hint of sweet and sour taste. The sauce was so good that I wiped it with the last remaining fish bits.

Tofu with minced chicken
Copyright Photo: The Paranoid Traveler/PFN
I love tofu and I love chicken so I had high expectations for this dish which, alas, failed to meet them. Anyone who will be tasting tofu for the first time will not be impressed. And anyone who doesn’t like tofu will never be a convert. The tofu was as bland as it can be. It felt like I was eating two different dishes at the same time.

As Sweet Chili did not totally fail us the first time, my family and I returned less than a week later to try the other dishes. We noticed that there were more customers this time around.

Seafood rice in basil sauce
Copyright Photo: The Paranoid Traveler/PFN
As we did not try the rice the first time, we ordered the seafood rice this time. Looking at it, I expected it to be sweet and I began preparing myself for disappointment. However, after just one spoonful, I was delighted with its not-so-sweet taste. It had just enough flavor to remind you it’s not plain steamed rice but not overpowering when eaten with other dishes. The seafood was too minimal though to make any meaningful impact and they should probably consider calling it “basil rice with incidental seafood.” Although the menu says it’s good for four people, it really isn’t enough simply because it is just so good. So we had an additional order of pad thai plain noodles but ended up pointing at each other to finish it. The noodles were too rich for seconds. We should have ordered another serving of the same seafood rice and probably ended up fighting over it.

Sweet and sour king fish with Thai herbs and garlic
Copyright Photo: The Paranoid Traveler/PFN
As their menu was limited, we had no choice but to order another king fish dish but this time with Thai herbs and garlic and ended up missing the mango relish. It wasn’t bad but we missed the tanginess to complement the richly flavored fish.

Stir-fried morning glory sauteed in soy bean paste and garlic
Copyright Photo: The Paranoid Traveler/PFN
I never knew kangkong was called morning glory in English. Never bothered to think what it was in English until I saw it on the menu. Anyway, the dish just tasted like something you can whip up at home.

Copyright Photo: The Paranoid Traveler/PFN
Now this is the best reason to return to Sweet Chili---its thako or rice pudding made with coconut milk and green pandan. It tastes like our very own maja blanca and dare I say it---but better? There are six in one order and if we weren’t already full, we probably would have asked for more.

Thai halo-halo
Copyright Photo: The Paranoid Traveler/PFN
I went back on another occasion to try their Thai halo-halo which is just the same as ours except it uses coconut milk. I couldn’t tell the difference really. It was so sweet though that I had to put more water. Perhaps they could follow the lead of Taiwan milk tea shops that ask for your sugar level preference or they could serve the sugar syrup separately for the customers to pour to their heart’s content.

Sweet Chili is located at 2/F Fisher Mall, Quezon Avenue, Quezon City. Meal dishes range from 175 and above.