Sunday, April 20, 2014

Philippine Airlines Urged to Stop Shark Fin Shipments

Philippine Airlines is under pressure once again from animal rights and environmental advocacy groups after a "suspected illegal" shipment of shark fins was discovered in Hong Kong. A campaign has been launched asking Philippine Airlines to commit to end the trade of shark fins. Last year, Philippine Airlines agreed to end the transport of live animals for cruel research and experimentation after an extensive international campaign was mounted led by the People for the Ethical Treatment of Animals.

Image Source: South China Morning Post
According to the World Wildlife Fund of Hong Kong, overall imports of shark fins to the city fell by thirty-five percent last year compared to 2012.The reduction in deliveries is a result of increasing pressure from environmental groups and the Hong Kong government's efforts to crack down on corruption and extravagance.

Nearly 100 individuals and advocacy groups have put their support behind an open letter submitted to PAL executives asking them to halt the trade immediately. In the letter, it was stated that Philippine Airlines "directly contradicts" its commitment to sustainable development by permitting the carriage of shark fins and related products on flights bound for Hong Kong. 

The letter was triggered after US-based FinsAttached and Hong Kong-based WildLifeRisk, discovered what they believed to be an illegal shipment of shark fins sent from Dubai via Philippine Airlines. Both advocacy groups asked Philippine Airlines in their open letter to help cut the supply chain. 

"Simply put, the tons of shark fins transported as cargo into Hong Kong on Philippine Airlines flights are directly leading to the endangerment of shark species and the marine environment in Asia and beyond," advocates wrote in the letter. "We need the airline's help in cutting the supply chain of shark fins to Hong Kong." The letter demanded that Philippine Airlines set an "aggressive timetable" to stop carrying shark fins and to post a pledge on its website. 

The 136 bags discovered in Hong Kong contained an estimated 6.5 tons of shark fins bound for dried seafood trader, Global Marine in Sheung Wan. However, the company insisted that the shipment was legal. "We have documents like import or export permits," a spokesman said. "There is nothing illegal and we have nothing to hide."

However, representatives of WildlifeRisk countered that there was "a low chance" that the shipment was legal, citing that Dubai was merely used as a trans-shipment centre for fins that were harvested in Africa where enforcement of fishing regulations is ineffective. 

Several foreign carriers have supported advocacy efforts by stopping shipments that pertain to controversial issues. However, Philippine Airlines is once again one of the last carriers to join the effort. Last June, Dubai-based Emirates stopped all shipments of shark fins on its Hong Kong bound flights. Advocacy groups believe that Philippine Airlines is holding out for financial reasons suggesting that since the airline flies several migrant workers to Dubai, the aircraft often fly back empty. 

At least five major international carriers have already banned shark fin cargo from its flights including Cathay Pacific, Asiana, Qantas, Air New Zealand, and Korean Air, while Fiji-based Air Pacific only permits fins from verified and sustainable sources.

Meanwhile, Greenpeace activists in the Philippines are furious over the news, citing a breach of trust after they met with PAL executives last year. It is believed that Global Marine in Hong Kong has received regular shipments of two to three tons each from Dubai that were flown by Philippine Airlines. Global Marine acts as a wholesaler for the shark fins. 

Philippine Airlines has yet to release a statement or comment on the matter. 

Friday, April 18, 2014

Cebu Pacific Eyes New Zealand Flights

Cebu Pacific is placing New Zealand on its list of possible future long-haul destinations as the airline seeks to acquire a third of the recently negotiated flight entitlements to the country. Last month, the Philippines and New Zealand signed a new air services agreement, expanding the number of current flight entitlements between the two countries.

cebu pacific new zealand
Copyright Photo: Angelo Agcamaran/PPSG
Under the new agreement, an additional 18 frequencies have been permitted between the two countries bringing the total number of weekly permitted flight entitlements up to 21. The previous agreement only permitted three flights per week. 

In a regulatory filing with the Civil Aeronautics Board, Cebu Pacific requested an allocation of seven weekly flight entitlements to New Zealand. The airline currently operates long haul flights from Terminal 3 at Ninoy Aquino International Airport in Manila to Dubai in the United Arab Emirates.

Cebu Pacific is the only local carrier that has expressed an interest offering flights between Manila and New Zealand. The petition is expected to be heard at the Civil Aeronautics Board's headquarters in Pasay on May 14. Cebu Pacific previously expressed interest in serving the Australian market as well. However, the carrier is currently limited to five flights per week under the current air services agreement between the two countries.

The new air services agreement between New Zealand and the Philippines also permits unlimited flights to points outside of Manila, and improves fifth freedom rights enabling Philippine carriers to pick up passengers in New Zealand and continue on to Australia. New Zealand carriers will be able pick up passengers in the Philippines and continue on to China. Third-country code sharing will also be permitted.

Third country code sharing allows airlines to market indirect but more seamless services between two countries, via cooperative agreements with third country airlines, which can assist in market development.

Cebu Pacific Increases International Capacity for Summer with A330

Cebu Pacific has announced that it will be increasing capacity on routes from Manila to Taipei, Hanoi, and Hong Kong to meet growing demand during the summer travel season. From May 2 to June 3, Cebu Pacific will upgrade two of its seven weekly frequencies between Manila and Taipei to the 436-seat Airbus A330 aircraft. 
cebu pacific hong kong
Copyright Photo: Angelo Agcamaran/PPSG
The remaining five frequencies will continue to be operated by Cebu Pacific's 180-seat Airbus A320 fleet. "By upgrading some of our Taipei flights to a bigger aircraft, we are able to offer 41 percent more seats, making more low fares to and from Taipei available for everyJuan," said Candice Iyog, Cebu Pacific Vice President for Marketing and Distribution.

In addition, Cebu Pacific also plans to offer an additional four weekly flights between Manila and Hong Kong until May 2. That will increase the number of weekly flights between the two cities from 28 to 32. The additional frequencies are on top of Cebu Pacific's regular service to Hong Kong from Iloilo, Clark, and Cebu.

The airline also plans to increase capacity between Manila and Hanoi. Currently, Cebu Pacific is the only airline operating direct flights between the two cities. It plans to operate three weekly flights from Manila to Hanoi every Tuesday, Thursday, and Saturday. 

As Cebu Pacific accepts delivery of new aircraft, the airline plans to add more destinations and increase frequencies on existing routes. "The delivery of more aircraft will allow us to add more destinations, routes, and flights to an already extensive network of key cities in Asia and the Middle East," said Iyog. "We encourage everyJuan to take advantage of these additional flights for their leisure and business travel needs."

Cebu Pacific was given clearance last week to mount new flights to Europe and the United States. The airline is currently planning to expand its long-haul network to additional cities in the Middle East and cities in Australia. An announcement is expected later this year on new cities that will be joining the Cebu Pacific long-haul network. The airline will be accepting delivery of additional A330 wide-body aircraft in the coming months.

Thursday, April 17, 2014

Cebu Pacific Cautious on Expansion to US and Europe

Although the United States recently lifted the Philippines to Category 1 status, and the European Union recently lifted the ban preventing Cebu Pacific from flying to Europe, the country's largest low-cost carrier insists that plans for expansion are long-term. Unlike rival Philippine Airlines that is busy making announcements of new routes, Cebu Pacific is adopting a more cautious approach.
cebu pacific a330
Copyright Photo: Diego Roxas/PPSG
"With nearly a million Filipinos working in the European Union, we look forward to offering our trademark lowest fares and the most extensive route network in the Philippines," said Lance Gokongwei, President & CEO of Cebu Pacific. However, the airline still has a number of obstacles to overcome including securing new long-range aircraft, analysing markets, defining its international routes, and securing regulatory approvals. 
"We are still examining all our options at this point," added Gokongwei. "We have not reached any decision on where to fly and we have no definitive timeline for starting flights to Europe. We still need to get permits, we need to go with the process - ideally within a year."
Cebu Pacific does not presently have any aircraft in its fleet that is capable of flying to Europe or the United States. The existing A330-300 aircraft in the Cebu Pacific fleet can only fly between 11 to 12 hours. That currently limits the airline to the US destinations of Hawaii and Guam. 
Although Cebu Pacific currently has pending orders for 50 aircraft from Airbus to be delivered by 2021, none of the aircraft on order include a long range model. While Cebu Pacific has not ruled out a possible order for a long range jet, it is still considering its options. "These are long term decisions. We have to do the studies first," said Gokongwei. "We still have to digest a lot of the narrow bodied planes and A330's coming in."
Meanwhile, Cebu Pacific is focused on its existing route network within Asia with plans to expand further into the Middle East and to Australia with its A330 fleet. "With the lifting of the EU ban, this network is about to get even bigger," said Gokongwei. "But our priority is the Middle East and Australia."
Cebu Pacific is the only profitable airline in the Philippines while all other carriers have reported losses. Much of that can likely be attributed to their strict business model and cautiously optimistic management philosophies. 
That is a sharp contrast to Philippine Airlines that rolled out ambitious expansion plans and placed a multi-billion dollar aircraft order shortly after San Miguel Group took over management. The parent company of Philippine Airlines recently reported a P11.85 billion loss for the first nine-months of this fiscal year, more than four times the loss reported the previous year.
Although industry experts believe that there is a large enough market in the United States to sustain both Philippine carriers, suggesting that competition will not be fierce, Cebu Pacific intends to focus on its current business model and its acquisition of Tigerair Philippines, leaving long-haul flights to the United States to be studied over the course of this year.
"We still have a lot of work to do. We are still going to open up Middle East and Australia in the next couple of years. These require a lot of investments," said Gokongwei. He was not as confident about Europe as Ramon Ang noting that while Cebu Pacific could take advantage of the market potential in Europe through commercial agreements with other carriers currently serving those markets, there is still intense competition from the Gulf carriers that are subsidized. "Middle Eastern carriers are not pushovers. They are fantastic carriers and fantastic competitors," added Gokongwei.
Cebu Pacific announced last week that it expects to carry approximately 17 million passengers in 2014, representing an increase of 18 percent over the 14.4 million carried in 2013. According to Gokongwei, the increase in capacity is directly attributed to the acquisition of Tigerair Philippines that has increased the airline's capacity to serve new routes.
Gokongwei noted that without the acquisition, Cebu Pacific would have grown passenger traffic in 2014 by only 4 percent. "The economy is robust. We see opportunity for growth across international and domestic markets," said Gokongwei. He added that the company should achieve the "break even" point on the acquisition of Tigerair Philippines by the summer season of 2015.

PAL Reports P11.85 Billion Loss

PAL Holdings Incorporated, the parent company of Philippine Airlines, reported losses reaching P11.85 billion in the first nine months of its 2013 fiscal year ending in December. The carrier blames the widening losses on lower passengers revenues and increasing expenses.

pal holdings inc
Copyright Photo: Diego Roxas/PPSG
The holding company that is jointly owned by Lucio Tan and the San Miguel Group reported that the loss is more than four times the P2.74 billion net loss reported for the same period in the 2012 fiscal year. P5.51 billion of the 2013 losses amounted from operations alone including P5.09 billion in other charges and P1.31 in financing charges. 

“The resulted other charges was primarily due to the impairment loss recognized for certain passenger aircraft that have been grounded or identified for retirement within 2014,” PAL said in financial statement released at the Philippine Stock Exchange.

Total revenues at the carrier remain almost unchanged at P55.97 billion, compared to P55.68 billion the previous year. The flat revenue comes in spite of recent expansion attempts in Canada, the Middle East, Australia, and Europe. Passenger revenues, representing 81 percent of total revenue, actually dropped 3 percent to P45.5 billion. The number of passengers carried by the flag carrier dropped to 5 million from 7.6 million the previous year. 

Operating expenses continue to rise with increasing jet fuel costs and rising maintenance expenses caused by ageing aircraft that have been forced to continue service due to restrictions imposed by the United States on the Philippines that were only lifted just this month. Jet fuel costs rose 6.7 percent to P36.4 billion while maintenance expenses increased 6.6 percent to P7.41 billion. Overall expenses were up 5.2 percent over the previous year at P61.5 billion. However, jet prices actually declined from an average of $131.74 per barrel one year ago to $127.74 per barrel for the current nine-month period.

Philippine Airlines is banking on the recent Category 1 upgrade from the United States to improve its financial prospects moving forward as it replaces ageing aircraft with modern fuel efficient aircraft on existing US routes and expands services into the Eastern United States.

Monday, April 14, 2014

SkyJet: Manila to Batanes Flight Review (Round-Trip)

Last October, I started thinking about different places to go for my annual vacation in 2014. I had never been to Batanes before and I was curious why so many travellers had been dreaming of going there. Since I travel somewhere each year, I decided to go to Batanes for my vacation this year. I booked my tickets on October 21 and planned my trip for January 29-31, 2014.

skyjet flights batanes
Copyright Photo: R.Badillo/PFN
Although I had not travelled with SkyJet before, I decided to fly with them because they advertised that they offered the "fastest flights" to Basco. Since my annual holiday time is limited, I wanted to ensure that I enjoyed every precious minute of my vacation. The SkyJet ticket was the most expensive airfare I have ever paid in spite of booking months in advance. They were more expensive than PAL Express but it was more important to me to have a faster flight.

SkyJet advertises that their flight from Manila to Basco takes 1 hour and 10 minutes on their Bae-146 jet aircraft. Since PAL Express uses the Q400 turbo-prop aircraft, their flight takes longer at 1 hour and 45 minutes. SkyJet is the only airline providing jet service to Batanes. Although my trip was originally scheduled for January, I was notified by SkyJet in advance that my flight had been cancelled due to maintenance on the aircraft. They rebooked my ticket for February 3-5 instead.

Unlike PAL Express, SkyJet flights depart from the old Manila Domestic Terminal also known as NAIA Terminal 4. My flight was very early in the morning scheduled to depart at 5:30am. I was supposed to check in at around 3:30am but I arrived at the terminal an additional hour earlier at 2:30am. When I approached the check-in counter, I was first in line. When I received my boarding pass, I was shocked to see that the flight's departure time had changed to 6:20am. This gave me nearly four hours to wait. I was frustrated and disappointed that I was not sent an e-mail or given any prior notification that the flight schedule had changed. When I questioned the staff at the check in counter, they seemed confused and did not know why my flight had been delayed. The SkyJet staff could improve their service by ensuring that they are able to answer all passenger's questions.

After completing my check-in, I proceeded to the waiting area at Terminal 4. Since the terminal is small, it did not take long to go through the check-in and security. Terminal 4 is very simple with just one large waiting area for all flights. But there are a few places where you can buy something to eat and there is also a Seattle's Best Coffee.

skyjet flights
Copyright Photo: R.Badillo/PFN
Several hours later, it was finally time to board my flight. The aircraft was a four-engined Bae 146-100 aircraft. It can carry 79 passengers. This is the only aircraft operated by SkyJet. I found the seats to be quite comfortable. As part of my ticket, SkyJet includes 10 kilograms of checked luggage, 5 kilograms for hand-carry, as well as in-flight snacks and beverages.

skyjet flights
Copyright Photo: R.Badillo/PFN
Our snacks were catered by Delifrance. We were served a chocolate croissant, a small sandwich, and a miniature fruit tart. They were all very "petit" and not good enough to satisfy an appetite in spite of the expensive airfare. Lucky for me, I brought my own "baon" so that I did not go hungry. We did not have a choice of beverages. They served a bottle of mineral water and sparkling wine in champagne glasses. But there was no alcohol in it. They called it juice. The rest of the flight went smoothly and we eventually arrived in Batanes.

Two days later, it was already the end of my vacation and I had to return home to Manila. At Basco Airport, I felt that security could use a little bit of improvement but the staff were very kind and accommodating. My flight was scheduled for 7:10am but the flight was delayed again. We did not end up departing until after 9:00am. I heard that the reason the flight was delayed was to exchange the landing slot with PAL Express. Others said that it was because Kris Aquino and her staff were supposed to be aboard the flight but they cancelled it because she was feeling sick.

skyjet flights batanes
Copyright Photo: R.Badillo/PFN
In spite of that, service in the air was great. We were provided with the usual snacks again and the same non-alcohol sparking wine. I wanted to take more photos inside the plane but I did not want to draw attention to myself. We eventually landed safely in Manila although we were a couple of hours behind schedule.
skyjet flights
Copyright Photo: R.Badillo/PFN
Overall, I enjoyed my trip. But compared to my past travels to Boracay, Palawan, and Cebu, I did not feel that the value of the ticket was fair for what I received. Perhaps Batanes is so expensive because there are limited flights with only two airlines. It would be nice to have more competition to lower the airfare. Maybe that would bring more tourists. I flew with Cebu Pacific and Airphil Express (now PAL Express) on my previous vacations and they did not offer any snacks. But I did get a discounted fare from Cebu Pacific when I booked in advance.

SkyJet was a more classy airline compared to other carriers that I have travelled with. It was the only airline where I have experienced being served a snack. But I'm not sure if that's really worth the extra money. I booked with SkyJet because they advertised that they offered the faster flight but with all of the delays, I did not save any time by choosing them. In spite of that, I would still fly with SkyJet again but if I found a lower airfare from PAL Express or another airline, I would try flying with them.

I have already recommended SkyJet to a friend of mine that is planning to go to Batanes later this year. But if I had to return to Batanes, I will choose the airline that gives the lowest airfare. If you are planning a trip to Batanes, it is more practical to choose the lowest airfare because you will need the extra money for food and transportation which is very expensive in Batanes compared to other places in the Philippines.

Flight Review by R. Badillo