Biz Buzz : Payback time at PAL | Inquirer Business

Biz Buzz : Payback time at PAL

/ 05:22 AM November 05, 2014

With the Lucio Tan group now back in control, real problems seem to be mounting at the nation’s flag carrier Philippine Airlines (PAL).

For starters, Biz Buzz sources say Neil Mills, one of the foreign consultants brought in by the San Miguel group very recently, had handed in his resignation.

Mills, who played an instrumental role in steering the airline back to profitability, was named chief executive adviser at PAL by Ramon S. Ang himself in September 2013.


Prior to joining PAL, Mills was CEO of India’s SpiceJet Airlines, chief financial officer of the UAE’s FlyDubai airline and procurement director at England-based EasyJet.


From what we hear, Mills may just be the first of many PAL executives ready to disembark.

More alarming is that even executives that were with PAL before San Miguel came in are now updating their CVs to show to potential employers.

The Tan family’s main issue with these people, our sources claim, is to whom their loyalties now lie—San Miguel’s or Kapitan’s?–Paolo Montecillo

Wasted chances

Speaking of PAL, is anyone else wondering what the airline might have become had it stayed as part of the San Miguel group?

Biz Buzz sources say the airline planned to put up a second hub at Tokyo’s Haneda International Airport—a major aviation hub in the region. This would have solved the problem of having “too many planes” that Manila’s Ninoy Aquino International Airport (Naia) has no space for.


The Haneda hub would have served as a transfer point for passengers flying from Manila headed to Europe and cities in the United States.

Another benefit of having a Japanese hub would have been getting part of the Japanese passenger traffic, making operations more profitable.

It makes sense, really, considering that PAL already flies directly to Haneda, the airport in the middle of Tokyo, and much more convenient than Narita.

Now what we hear is that those plans are dead. So what does PAL plan to do with all those planes it’s getting delivered (which we’re told the Tan group actually approved of when plans were brought up during board meetings)?

An easy conclusion to make is to sell PAL to one of the Middle Eastern carriers. After all, these gulf airlines are all itching to have a presence in the fast-growing Asia-Pacific region.

These Middle Eastern carriers can then absorb the new planes that PAL doesn’t want. According to another Biz Buzz source, Lucio Tan’s son Michael, with the help of Washington Sycip, is already brokering a deal with one of these Middle Eastern players, which may announce a planned investment in PAL before the end of the year.–Paolo Montecillo

Rinky dink Clark firetrucks?

Clark International Airport is certainly one of the more efficient airport operations in the country, with a lot of upside potential—if only things would be handled properly, that is.

Word is coming to light, however, that beneath the everything-is-great facade at the aviation hub north of the metropolis, there are some very serious issues that need to be addressed.

For example, Biz Buzz learned that there were some very big concerns (raised by airlines operating at the former US air base, no less) about the level of aviation safety implemented by the previous management.

In particular, we heard that a number of airlines have raised the issue that the firetrucks used at Clark were not exactly up to par, especially when juxtaposed against international standards.

We heard, in fact, that a deal by the previous Clark administration to acquire these firetrucks (critical to maintaining safety standards in case of accidents) was being questioned by some airlines.

We heard that the bids and awards committee in charge of procurement approved specifications that allowed for the acquisition of smaller firetrucks from Korean and Taiwanese firms. These vehicles are smaller and have less firefighting power than the standard firetrucks used at major aviation hubs.

As such, some airlines doubt whether Clark has sufficient safety equipment necessary to service large wide-bodied aircraft, we’re told.

There is now a mounting clamor to have these contracts rescinded. Otherwise, we might see more airlines stop operations out of Clark. That would be sad, as there are only two left, at present.–Daxim L. Lucas

MRT conundrum

A final report on the state of MRT-3 could be ready for release as early as next week but media leaks in recent days may have already provided some clues.

We’re talking, of course, about the MRT-3 audit conducted by Hong Kong’s MTR Corp., which arguably runs one of the best railway systems in the world.

Reports surfaced that the performance of MRT-3 was determined to be “unsatisfactory” and that it suffered from poor maintenance. Hardly surprising for the half a million or so commuters that have to pack themselves into the glitch-prone system daily, right?

A lot of noise came with that “draft” report. The transportation department, which operates the railway, and MRT-3’s private sector owner, MRT Holdings, again argued whether or not crucial maintenance data was made available to MTR Corp.

MRT Holdings’ spokesman David Narvasa noted, for example, that they were only able to review a single month’s worth of records of Autre Port Technique Global Inc., which continues to maintain MRT-3 on an interim basis after its one-year contract ended last September.

It was the same story for previous records of maintenance providers like controversial PH Trams CB&T and Japan’s Sumitomo apart from a “maintenance log book and history of failures of the MRT”, he said.

The transportation department denied this as its officials noted that “full access” was given during that time.

We should note that there is no love lost between both sides especially with the department’s planned P54-billion buyout-takeover plan of MRT-3.

Having said that, we do wonder about the “true condition” of MRT-3. And after all interested groups last month shunned the railway line’s P2.25-billion, three-year maintenance contract, it seems others are very interested in this as well.–Miguel R. Camus

‘We will rise again’

It’s been a year since Super Typhoon “Yolanda” wreaked havoc on Eastern Visayas, claiming thousands of lives and causing significant damage to property.

To commemorate this first anniversary, the Office of the Presidential Assistant for Rehabilitation and Recovery (OPARR) under Secretary Panfilo “Ping” Lacson has put together the music video “We Will Rise Again” which will be simultaneously launched online and in various television stations and cinemas all over the country on Thursday at exactly 11:30 a.m.

All government agencies, television networks, cinemas, development partners and private sector partners are likewise set to share the link of this video ( in their official websites and other social media platforms.

Singer Raki Vega and composer Jude Gitamondoc—both Cebuano artists—shared their talent to make this video possible. When they heard about the initiative, these artists offered their performance and song for free in support to the Yolanda victims and survivors.

According to OPARR, this music is a “reminder of the unwavering determination, the indomitable spirit, and the unparalleled resilience of the Filipinos.”

This music video intends to highlight Filipino Bayanihan (community spirit), showcase efforts in the relief, recovery and rehabilitation phases in the affected areas one year after and thank the local and global communities for their support to rebuilding efforts.–Doris C. Dumlao

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TAGS: Clark International Airport, Japan, Lucio Tan, MRT 3, PAL, Philippine Airlines, Ramon Ang, Yolanda

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