Philippine Airlines Considers Expansion of NAIA Terminal 2

Philippine Airlines is considering expansion of its primary terminal at Ninoy Aquino International Airport in preparation to accommodate the large number of new aircraft that will be incoming over the next several years. The national flag carrier is currently evaluating a $200-million expansion plan of Terminal 2, that would be able to meet the increasing demand of the coming years.

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According to Philippine Airlines President Jaime Bautista, the proposed expansion of Terminal 2 would be primarily used for international flights. The project would be constructed on an existing adjacent 18-hectare lot that was previously used by Nayong Pilipino, but has long sat idle. Bautista indicated that an expanded terminal would be able to serve at least an additional ten million passengers annually, in addition to the existing eight million that is served by the current terminal.

In an interview with the Philippine Daily Inquirer, Bautista said that if it was up to him, the project would begin before the end of 2015, as Terminal 2 is nearing its full capacity. "This is important," said Bautista. "It's part of our long-term plan, which is to expand Terminal 2."

Philippine Airlines is expecting to accept delivery of an additional 38 aircraft by 2024 to complement its existing fleet of 73 aircraft. Bautista has already been pushing hard for delivery deferrals as the carrier is not ready to accept any more aircraft. In addition, the carrier will need a home for additional long-haul aircraft that are yet to be ordered to support expansion in key markets such as the United States. 

PAL is the only carrier that operates from NAIA Terminal 2, which opened in 1999 as the Centennial Terminal. A 25-year lease has been secured by the carrier for the adjacent Nayong Pilipino property. Bautista intends to invest P600 million in the property in order to prepare it for us as a parking apron for the carrier's rapidly expanding fleet. 

The carrier has not submitted any proposal to the Department of Transportation, given the response from the Aquino administration when a proposal was submitted last year by former Philippine Airlines chief Ramon Ang to construct a brand new airport near Manila Bay. 

Transportation Secretary Joseph Abaya has consistently enforced the government's preference for an open bidding process in spite of the administration's inability to move any projects forward. The government's stance has deterred any other business groups from submitting similar proposals to help address the growing congestion problem at Ninoy Aquino International Airport, the country's primary international gateway.

Meanwhile, Bautista stated that Philippine Airlines is open to support the government's plan for a possible NAIA Terminal 5. The possible construction of the new terminal is a stop-gap measure to address congestion at the airport complex, prior to the construction of a brand new international airport. But not all industry analysts believe that a fifth terminal will resolve congestion, citing the issue that the airport only has two runways, of which only one can be used at a time. The Transportation Department recently scrapped plans to construct a third runway in favour of constructing a fifth terminal, while attempting to improve the efficiency of the existing main runway.



29 comments:

  1. If this will be approved by the government, then wrong decision again. The government should not allow a monopolistic strategy benefiting only one carrier. Allowing exclusive use of terminal by PAL was already a wrong decision by the prior administration. This will make the congestion even worse because there is only one run way and the airport traffic will not be lessen. That space for nayong pilipino should be used for something else better than this causing more congestion. Even if you make bigger terminal, and there is long queue on take off and landing, it is not gonna help. What government should do is to rearrange all terminals to use it wisely. Why not combining all big airlines including PAL in terminal 3, and share small airlines in terminal 1 & 2. Decongest airport traffic by using the evening schedule, to fly to other domestic, and let other domestic airport to fly international. Well you cannot do anything anyway with single runway in Naia because this is the bottle neck. Unless you add another runway and construct the sangley world class airport to anticipate millions of passengers in the coming years. Allowing more airlines to share terminal will help other airlines to expand, so that there are more competitions. United Airlines, emirates, ana, air Asia, even our very own seaair, and cebu pacific, asiana, cathay, are expanding in the country. So the government should allow this to happen. PAL 's monopolistic strategy is not working anymore. They are even struggling to compete with other carrier. They should change their strategy to compete with global economy. Other big countries do not believe on flag carrier. U.S. do not even have flag carrier. All U.s. airlines are all flag carrier. This way you're giving chances to all local airlines like CEB and SEAAIR. when competition exist, chances of having lower fares. Also if more airlines will expand in the country, it will create more jobs, rather than having only PAL that cannot even hire and give more jobs.

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  2. PAL never intended to use T2 solely. When it move in 2001, no one wanted to move to the new terminal. Stop blaming PAL. They as a business is trying to find a way to make themselves competitive to provide better service to their clients. The issue is the single runway. But we don't have enough space to expand our airport with a new runway. As a stop gap option, the additional terminal might be able to alleviate the worsening airport situation. But in the future we need to look elsewhere for a new location. How can you say it is monopolistic given that we now have four carriers operating in the country. And you can't take away the fact the Ceb Pac is bigger than PAL in terms of market share. How can that be monopolistic? Also why not put in question the fact that other carriers like Seair which is alredy part of 5J and Zest which is now under Air Asia have merged or had been taken over by Ceb Pac and Air Asia respectively. In reality, it seems the market can't sustain more than 5 airlines. It will be market suicide for all. We've reached market saturation point. Another thing is why give foreign airlines the competitive edge when we have local companies that have more Filipinos depend on. One can only wonder why can't we see the bigger picture.

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    1. And making T2 bigger would help the decongestion of a single run-way? Traffic on airplanes taxiing is already a big problem and would become even worse in the coming years.

      Now, let's disregard this runway issue for now, which we already know will eventually be the biggest problem. I think the issue with PAL is taking T2 exclusively. This was a wrong move and never anticipated or studied the future growth. Looks like based on the response above, PAL cannot expand anymore in NAIA because there is no space in T2, and PAL is limited only on that congested space. Of course CEB and AirAsia would have bigger market shares, because obviously T3 is bigger than T2.

      The airline industry has just started booming in the country, which is good, more jobs to expect. But I cannot agree that it had reached the market saturation already.

      That question "why giving foreign airlines the competitive edge" is considered monopolistic. Also, isn't it monopolistic for an airline to attempt building its own airport? Today is the era of global economy and open market. Look at Singapore, it is a small country, but practicing open market. Even their workers are hired from outside. We know that we have weaknesses in urban planning, and we can see that based on our airport planning as an example. This is where we should focus for the next generation. BTW. we know the solution is to construct BIG airport (BIG space, more terminals, more airlines), we got that. My point is that all terminals should be shared. Also why not utilizing other airport outside of Manila? NAIA can be decongested for flight scheduling and use other local airports. For example instead of international connecting flights, PAL can have late night flights or early morning flight in domestic let's say 3am from Manila to Cebu, then connect an international flight from CEBU to San Francisco like 6am on that morning. Could be conecting with PAL and PAL, or other airlines.) Or you can have another one from MANILA-CLARK-NEW YORK. Got my point so far? We cannot have a new airport built overnight, but night scheduling and use the connecting flights within the country would help for the time being. This will help decongest NAIA, because other airports in the country will become busier. Of course this is not so comfortable for travellers. But what other options can we have? The NAIA airport like PAL's T2, cannot accommodate more passengers during the day and majority would like to fly during the day and direct flight, especially if you're going to hongkong or singapore only. But I would prefer a red-eye flight if travelling like more than 5 hours in the plane. This is another smart move to decongest NAIA, and will make other local airports busy. So it's just a matter of opening more international flights other than NAIA, and PAL should be able to take advantage of connecting flights at night time. With the switching of CATEGORY 1 to U.S. Flights and lifting EU ban, can take advantage of airline industry expansion in the country, not just NAIA, and not just PAL or CEB. See my point? open market. This can help also to build reputation and trust of all passengers around the world to fly with any airlines in the country, and would make the philippines a hub on their travels. Why cant we do this? Other countries can compete with this airlines market trend? why not Philippines?

      Then when it is ready for the new NEW airport, this system of interconnecting flights and hubs would have already been in placed. Do you know that this will help also the economny of other provinces in the country. Of course if you have more travellers going in provinces, chances is to open more businesses in other parts of the country, rather than concentraining in Manila, and eventually will help to decongest MANILA, rather than focusing on just decongesting the airport.

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    2. I agree your point of view and it has the potentials.just imagine pal wants to open new routes like chicago,auckland,perth or dallas from cebu.flight to cebu is just an hour away.in naia waiting on your delay flight takes almost 5 hours.

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    3. I also agree that the government will most probably not allow PAL to build a terminal for its own use. There will be the issue of conflict of interest. The government will most probably bid the project under the government's PPP

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  3. I agree with this terminal expansion over the addition of another terminal. In fact, I would suggest all the terminals in NAIA be expanded. NAIA 3 definitely has that room for expansion. You can literally see it on Google Earth. More places to park will reduce airport congestion. It seems DOTC likes to suggest things that make you scratch your head. I saw that third runway proposal in TV Patrol. The runway they thought of is so short in length and so near to the active runway, why was it even something worth thinking? Hindi pa nila tinodo.

    What I would like to see in NAIA upgrade, aside from the terminal, is its navigation aids, especially in Runway 13/31. Expand that runway as well.

    No need to make new things in NAIA, just improve the things that are already there.

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    1. True that..how about facilitating airport transfer chaos? Building rail links between terminals will be an added plus..instead of navigating notorious road traffic..

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    2. That is why I am also scratching my head as to why the proposed subway will traverse MOA to Makati to The Fort, but not the airport?

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  4. Based on the operations of PAL, they really lack terminals that's why even other PALExpress flights are in T3. Even at this point, still some planes are being deplaning on the Petron Depot which is for me is very burdensome. If PAL has the initiative to alleviate this situation, they could probably lobby this as this would improve customer experience. As for the runway congestion, this should be the priority of the government to expand it or even relocate it in the soonest possible time. Should it be in Sangley, they should be laying the foundations for this enormous task as soon as possible as this may takes up to a or more than a decade for this to come into fruition.

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  5. PAL is as disoriented and as confused as ever with its primary mission. When will PAL learn that its primary business is NOT to build airports because it is not in the construction business and it (PAL) has no expertise with the requirements of building an international airport.

    As it is, PAL has not even met the seal of excellence (5-star rank) in its industry so PAL should first endeavor to level up to 4-star from the current 3-star before even thinking of something it knows nothing about. Achieving 5-star airline ranking has nothing to do with the facilities of the airport. Achieving 5-star airline ranking has everything to do with the excellent internal processes being observed by the airline which PAL fails to achieve time and time again.

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    1. how much star are the other local airlines? just wondering....

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    2. Don't really believe in Sky Trax star ranking since it's open to everyone which people tend to be subjective. Unfortunately most Filipinos will only give their ratings when they encounter something bad and doesn't say anything when they experience something good. While I agree that PAL needs to improve, I don't believe that the star ratings are actual gospel.

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    3. So you don't believe in survey results though where they based their ranking from? It 's the same as election asking people's opinion. Maybe these passengers are not responding to survey if they experience good customer service, because that doesn't worth it compared to the bad experience they had with PAL. Don't you know that PAL has also one of the most terrible customer service in airline industry? That's what survey says.

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    4. World's Skytrax rating gives PAL a 3-star category. I believe in Skytrax because all information come from all four corners of the earth!

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    5. Yes buts it's still mostly subjective results than objective. Don't tell me that you believe that yelp results is gospel and everything Is true in the internet?
      There are other tools in the industry that rate airlines and are completed by independent airline raters and auditors.
      To make my point, what is the error margin of skytrax? Every credible rate tools has an error of margin if they complete a real survey. While it looks like skytrax is using the mode, what is their median and mean results?

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  6. Building a rail link (automatic/self-operated) like San Francisco International Airport should be a priority of the RP government. This is a logical reason to solve heavy traffic at Manila Int'l Airport as well as easy connections from one terminal to another. Do not tell me there are no funds for this project! World airlines are operating flights and there should be revenues collected from them...I am sure of this.

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  7. London's Heathrow airport is one of the busiest in the world and is not much bigger (maybe even smaller) than NAIA. Heathrow also has only two runways (they wanmt a third) and if you watch the busy periods at Heathrow, with one plane landing every 60 seconds and one plane taking-off every 60 seconds, you will be amazed at the logistics miracle its employees perform every minute of its operating day.
    Manila doesn't need a new airport, it needs a huge injection of logistics intelligence, IT, and sensible management put into NAIA.
    NAIA could be a great airport but I doubt the Philippines government will ever understand how to make it so.

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  8. AnonymousFebruary 10, 2015 at 2:49 AM It was meant for temporary alleviation of the current situation of NAIA T2. Why wait, when the government doesn't even know how to build/operate a proper airport. You completely understand the fact that T2 is small as it is. And by expanding it, we might give the opportunity to free up space at T3, allowing more airlines to move there or have Air Asia or 5J expand or consolidate operation. It seems to me you are just pin pointing all blame on one particular carrier and yet you totally ignore the fact that Ceb Pac is almost in control of whole of T3. It is a matter of organizing airport operation making it more efficient for all. Like in other countries, they organize terminal operations by airline per terminal. Again making it more efficient. We can have more international carriers in T3 with PAL out of the said terminal. It may be not their business to build it as it looks anti-competitive. But for how long do we expect the government to act on it? How many years do we have to deal with sub-par quality airport terminals. What the airline I think it wants is just an improvement on over all passenger experience. Why deny the passengers using PAL to get better service and experience. When market saturation was mentioned, it was in reference to as how many local airlines can be maintained in the country profitably. The effect to customers will be short term. Prices will nosedive yes but for how long? Market wise we can't seem to handle more than 5 airlines internally. Exclude international carriers, but if you look at it, after a few years of seeing more airlines, they are starting to consolidate again. As to how many can serve us, maybe 3-4 ones. Exclude the international carriers. And I don't even consider Air Asia PH local as it is part of a network chain from Malaysia. The concept of monopoly is no longer in existence with 5J and Air Asia in the country. Others are starting to use MNL as a port of call. Construction of a new mega airport complex for MNL was never put into question. I agree with your points on having one. We just need the proper infrastructure and facility to connect Manila should the airport be brought out of our nation's capital.

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    1. In other countries like U.S., there is no exclusive terminal for one airline, they are shared by multiple airlines. Think on a bigger picture like from 5000 ft above. The concept of consolidation has nothing to do with competing with the airline market condition. Maybe in a short-run that happens depending on economy situation, but in the long-run, consolidation will not always be the case. That thinking of consolidation presumes that the airline industry in the Philippines will not expand in the future. It should be forward not backward. Regardless of local airlines which you are claiming to keep up to 5 only because of the market saturation point that you were saying, all airlines will still be competing with the same passengers. Got the point? So even if you consolidated 5 local airlines into one which is a monopolistic concept, international airlines that will expand to the country, will still compete on the same passengers. So the 5 that became one, is not considered as one, because you have other international carriers expanding in the philippines and sharing and competing on the same airline market. There are different ways of monopolistic, even air fare can be monopolized. LEt's give an example. From the U.S. to the Philippines, only Philippine airlines has direct flight. But you can fly with Delta via Japan, or United airlines via honolulu-guam, or asiana, malaysian, etc. (any airlines that fly to the philippines). But because Philippine airlines has the only direct flight, why the price is so high? Isn't it another method of price monopoly? Think about it.....

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    2. You are wrong about the US not having consolidated airlines in one terminal. In Miami, MIA has only American Airlines in Terminal D, with it's One World Partners going out of either Terminal E, F or J. In JFK, multiple terminals are one airline only. In DTW, the main terminal was built for Northwest Airlines, now Delta.
      The difference is that these terminals are connected with other terminals either by attachment or by some type of airport transportation (rail, bus, etc) without having to transverse local streets. The layout of NAIA is not conducive to easy operations as you have passenger terminals on both sides of an active runway as well as cargo and maintenance facilities interspaced throughout the property. Also the streets around the airport are so small that the flow of traffic is constantly impeded.

      Terminals should be moved to a point where they are easily accessible to each other. The cargo and maintenance facilities should be allocated to one side of the airport as well. If a central drop off point could be made for check in/ drop off for all airlines that would also house the baggage claim areas for arriving passengers, it would alleviate a lot of the congestion both inside and outside the airport. An internal rail system could be set up to allow the passengers to get to remote gates that would only incur a short walk from a drop off point. These gates could be set up in clusters for each airline to use to allow seamless transfer between planes as well as the baggage. People connecting from within the PI to International carriers (and vice versa) would be easier as they wouldn't have to leave the terminal after clearing customs. Also people who may be using MNL to connect to other International Cities would be able to stay in a secure area as not to be able to enter the country.

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    3. Hmnnnn..... let's see who is wrong. In 50 U.S. states, there are approximately 14,000 airports. Of course that includes small airports too and some of them are not for commercial airports. Exclusive airport-use by one airline only is NOT the airport standard in the US. Even the MIA terminal D that you are telling here, it is shared by US airways, which is being merged now with AA, then the American eagle (AA's domestic), BUT Qatar airways is also sharing at Terminal D. If you don't know about this, then maybe you need to travel more or do your own research. In DTW (Detroit) that you mentioned here, the McNamara Terminal (the main terminal that you are saying) is also shared by Delta, Northwest (delta now), Air France and KLM. So it is not exclusive to Delta only, they are partners in code sharing but they are NOT one airline company, The rest of the airlines are sharing in the NORTH terminal. In JFK, Terminal 1 is shared by Alitalia, aero mexico, Air France, Air China, Lufthansa, etc. Majority of delta flights including domestic are in Terminal 2 (but Terminal 2 & 3 are used by Air Tran also and other airlines) , but Delta is Moving to Terminal 3 to 4 also (which are shared by other carriers and other international airlines (emirates, etihad, egyptair, kuwait, etc. are sharing in terminal 4). So Delta is sharing with other Terminals too, which is used by different airlines as well. Terminal 5 to 8 are shared also (ie., aer lingus, argentina, air berlin, ana, american, british, jetblue, iberia, iceland, etc... too many).

      Some airports maybe seen as exclusive, but it depends on the expansion and situation, it can be shared as well. Changes are very dynamic in the U.S. Some airlines are merging but sometimes they do split as well. They are no other than other businesses in the US that they merge then split. Because America is a market economy. so it depends on Market condition.

      Now with the airports that you named above, WHO IS WRONG NOW? I don't think it's me.

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  9. If the government will allow PAL to build its own terminal, the government will have to also allow Cebu Pacific to build its own terminal too. PAL is not the only airline expanding its fleet - Cebu Pacific is also doing the same thing. Why will the government favor PAL alone when it is both PAL and Cebu Pacific that are equally servicing the travel needs of people?

    The additional flights of PAL and Cebu Pacific has to be elevated to the proper airport authorities for proper handling of additional flight movements.

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  10. It was 2 years ago when the government was asked to move the operations of General Aviation and private jet companies out of the NAIA loop. Is 2015 the right time to send the operations of General Aviation to Sangley?

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  11. PAL can design the new terminal as beautiful as Iloilo International Airport. with good facilities , seatings, magazine stores, Big screen TVs, Wifi , beautiful garden, mini museum, duty free stores and etc. if ever there will be delay due to runway congestion, the passengers will not mind because they are busy enjoying the beautiful airport facilities. and also parking bays for the planes is also necessary

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  12. Manila International Airport's congestion problems can be solved if the RP government will expropriate the adjacent squatter areas of Taguig. That is a government-owned property so it has all the right to do so, for the good of everybody in the Philippines.

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  13. Expanding Terminal 2 is a great idea. More room is always a good thing unless you like tight space. Then you need help hahahaaha.

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  14. The most viable solution of NAIA's congestion is to accept the San Miguel proposal, building a new Airport Terminal with 4 Runways. We are lagging behind our Asian neighbors in terms of Airport Terminal, Runway and Capacity.

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    1. http://www.wsj.com/articles/alternate-plan-for-manila-airport-emerges-1407083371

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  15. " We are lagging behind our Asian neighbors in terms of Airport Terminal, Runway and Capacity". Not just lagging behind! Not even in the same race! Manila airport is close to being one of the worst in the world. I fly into Davao when visiting the Philippines just to avoid it. It is a disgrace!

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