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Biz Buzz: ‘United’ airlines

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Biz Buzz: ‘United’ airlines

/ 02:24 AM August 21, 2015

RIVAL domestic carriers Philippine Airlines and Cebu Pacific are again banding together to stop an increase in seat capacity between the Philippines and United Arab Emirates ahead of air talks set from Aug. 27-28.

We have seen this rivalry play out, with both PAL and Cebu Pacific helping to block the holding of air talks in January this year. This time around, both the Philippines and UAE have decided to proceed with negotiations and our carriers are going all out.

Cebu Pacific had already said that added capacity was not needed.

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But PAL took the argument further by citing everything from the harm this does to local players to the US government-led investigations on “unfair practices,” like the billions of dollars Gulf carriers, which are state-owned, allegedly receive from their home governments via subsidies.

Following this argument, Gulf carriers are able to fly at lower costs, pass these on to consumers via cheaper tickets, and take business away from other carriers. This, according to PAL, not only hurts its business in the Middle East but also elsewhere as the region is a hub for flights going to Europe and even the US.

“We call on the Philippine panel to the Philippine-UAE air talks to refrain from giving Mid-East carriers undue advantage by granting more capacity and frequency beyond what the market requires,” PAL president Jaime Bautista said.

A big beneficiary of an increase in seat capacity is Emirates, which wants a third daily flight between Manila and Dubai from the current two.

Emirates, perhaps feeling alluded to in PAL’s statement, was quick to react and said in its own statement that the added flights were needed and their Dubai-Manila route had been operating at 100 percent capacity in economy class.

“This represents a significant gap between supply and demand for seats,” Emirates said, while denying accusations that it was operating at an advantage as alleged by the “big three” US legacy carriers.

Clearly, a lot is riding on these particular air talks with the UAE. After all, both PAL and Cebu Pacific didn’t lobby as hard ahead of successful air talks with UAE neighbors Oman and Qatar—both held also this year.

It all comes down to what the Philippine air panel thinks about the true demand in this route. With the talks coming up, we’ll know soon enough. Miguel R. Camus

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Moving on

JUST a few days ago, property veteran David Leechiu stepped down as country chief of Jones Lang LaSalle (JLL) after a seven-year stint with the Philippines’ leading property consulting and brokerage firm.

A source privy to the matter described it as a “very amicable” parting of ways between Leechiu and JLL, whose revenues had grown 10 times under the former’s auspices. JLL has gained back three times the amount of money it paid in 2008 when it bought Leechiu’s independent real estate brokerage business Leechiu & Associates and retained him as country manager.

But we heard that Leechiu, 43, is far from hibernating after leaving JLL. While still young and while the cycle in the property market is still favorable, we heard he will go back to independent property consulting. But that will take a few months as he will have to wait for the noncompete provision (as an ex-employee of JLL) to expire.

Although Leechiu is headed back to an independent property brokerage business, the good thing is that even if he earns just a small portion of what JLL makes today, all the hard work will come with dividends apart from salary.

We also heard that he won’t necessarily strike it on his own, as his key partners from the old Leechiu & Associates—Jose Fernando “Nando” Camus, Angela Padilla and Ambrosio Padilla III—are keen on coming back from retirement to help Leechiu start over. It’s like coming full circle but with two more decades of expertise in navigating the local property market.

Meanwhile, expat Lindsay Orr, previously the chief operating officer of the Philippine unit, is taking over Leechiu’s post at JLL. A real estate veteran himself, Orr began his career as a chartered surveyor with Jones Lang Wootton in London. He relocated to Hong Kong in 1985 and moved to Manila in 1992 to join First Pacific Davies. He joined Jones Lang LaSalle in 2000 and helped develop its business in Manila, before relocating to Indonesia to work with the Mulia Group, the largest commercial landlord in Jakarta. He rejoined Jones Lang LaSalle in Manila in 2006. Doris Dumlao-Abadilla

Competition czar

ONE important appointment President Aquino will have to make in the coming weeks—one that will help safeguard his legacy on the economy front—is the head of the Philippine Competition Commission (PCC).

If you’re not familiar with the PCC, that’s because it is a yet-to-be-created agency whose existence is mandated by the recently enacted Philippine Competition Act.

This law, theoretically, is meant to combat the power of monopolies and oligopolies in the country by helping ensure a level playing field for companies which provide key services to the public, whether they are big or small.

Of course, to a large degree, the success of failure of this local version of the US antitrust law rests on the leanings of whoever will be appointed chair of the PCC. Under the law, the PCC will be attached to the Office of the President and, apart from the chair, will have four other commissioners—all presidential appointees with seven-year terms of office.

The law states that “they must have been in the active practice of their professions for at least 10 years, and must not have been candidates for any elective national or local office in the immediately preceding elections, whether regular or special: provided that at least one shall be a member of the Philippine Bar with at least 10 years of experience in the active practice of law, and at least one shall be an economist.”

Word on the street is that, this early, the frontrunner among candidates for the chairmanship of the PCC is Accra lawyer and former stock exchange president Francis Lim.

An experienced corporate lawyer, he is supposedly backed by no less than Finance Secretary Cesar Purisima. As the choice of PCC chair has far-reaching implications for the country, whether Lim will be chosen for this task should be worth watching. Daxim L. Lucas

Back in circulation

IT LOOKS like former Customs Commissioner John “Sunny” Sevilla has recovered from his eventful stint at the helm of the Bureau of Customs where he tried valiantly to reform the corruption-plagued system, with mixed results. And we all know how that ended last April with word of his dismissal by the Palace making its rounds in the media before he was officially informed by his superiors that he would be replaced, apparently.

In any case, Sevilla is back in circulation, according to Biz Buzz sources. This time, he’s with another problem-plagued government agency, specifically the Department of Transportation and Communications (DOTC). Yes, that’s the very same department in charge of the country’s creaking and crumbling transportation system like the Metro Rail Transit and the Ninoy Aquino International Airport.

Word on the street is that Sevilla is now a “consultant” with the office of Transportation Undersecretary Rene Limcaoco who’s in charge of “planning” at the department which oversees billions upon billions of pesos worth of public-private partnership projects, among others.

Depending on who one speaks to, Limcaoco’s office is either the vanguard of this administration’s “Daang Matuwid” thrust, diligently poring over big-ticket transportation plans before they are implemented, or… a big cause of delays for these badly needed projects.

Of course, Sevilla is an investment banker by training—unlike many of the DOTC officials who are lawyers (instead of engineers, critics say)—and people are still hoping against hope that he could help get the department’s clogged project pipeline moving in the last nine months or so of the Aquino administration.

There are many doubts whether this will happen, but it’s now up to Sevilla to prove his critics wrong. Daxim L. Lucas

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TAGS: Airline, biz, broker, brokerage, Business, Buzz, carriers, Cebu Pacific, corporation, cost, customs, economy, flights, Industry, Investment, investor, PAL, Philippine Airlines, property, Real Estate
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