Exert a lot of airport | Inquirer Business

Exert a lot of airport

/ 11:17 PM October 19, 2015

Once again I have a little confession to make: I sneaked into Cebu recently because I wanted to witness firsthand the much talked about changes at the Cebu Mactan International Airport, or the MCIA.

Well, it seemed that the DOTC, which turned over operations of the MCIA terminal to a private group in November last year, was doing all the talking about the improvements at the airport, as if the DOTC was directly responsible for them.

From what I gathered, the credit actually should belong to the concessionaire of the terminal, this once controversial joint venture between local construction group Megawide and the India-based airport operator GMR, called GMR Megawide Cebu Airport Corp.


The main theme for the MCIA used by GMCAC, which was the name the group liked to be called, was actually ‘resort airport.’ You knowólike sun, sand and sea!


Well, the airport in the world’s gambling capital Las Vegas (United States) had slot machines even at the departure lounges, and the airport in Dubai (United Arab Emirates) had shopping arcades to beat all the malls in the region put together.

In Cebu the operator billed the airport as a resort mainly because the group wanted to market the entire place as a tourist destination, the old world charm and scenic beauty of Cebu, not to mention the jolly character of its people.


In other words, the business of GMCAC would not just involve the airport; after all, the viability of the airport operations would rest entirely on the ability of the place to attract travelers, most of them being foreign and local tourists.

Even the new MCIA logo showed various colors of flower petals, denoting the character of the people and the place, according to Louie Ferrer, president of the joint venture firm called GMCAC.

All in all, the exposure of the joint venture in the project would amount to P37 billion, or some P17 billion in total upfront cost of just getting the operating contract from the Aquino (Part II) administration, plus the P20 billion in construction cost of the all-new second terminal.

Based on its actual financial exposure, therefore, it would seem that GMCAC really exerted a lot of effort to win the operating concession, despite its rather limited contract with the government covering only the terminal.

In other countries, such as the JFK airport in New York or the Gatwick airport in London, the privatization of airport operations normally covered the entire gamut of the terminals, the cargo operations and the runways. The reason behind such integrated privatizations of busy airports elsewhere was the management tool called ‘single point of responsibility.’

Look, boss, any trouble in the runway for instance would cause a chain reaction of flight delays, thus affecting the terminals, and the income of the operator, yes?

But our bright DOTC apparently decided to retain control of both cargo and runway operations with the government agency known as MCIAA, or the Mactan Cebu International Airport Authority, the same agency that the DOTC replaced as terminal operator. Go figure!

Anyway, GMCAC seemed willing enough to pour its P37 billion into the Cebu airport venture, despite the limited coverage of the contract, perhaps because of its own optimistic forecast on the volume of air traffic there.

At present the MCIA has a capacity to serve only 4.5 million passengers a year, which has been stretched out almost to the breaking point of more than 7 million, even fast approaching the 8-million mark.

With the construction of the second terminal beside the existing one, the concessionaire GMCAC set the target at a rather ambitious number of 12 million passengers a year, actually hoping to cash in on the tourism appeal of Cebu and surrounding regions. The operator figured that MCIA would soon become the hub in the south, serving Filipino balikbayan from United States, but more importantly the OFWs in the Middle East, Europe and Asia.

At present, the Cebu airport serves international direct flights of three Filipino airlines and nine foreign airlines going to some 12 destinations. But here is the encouraging thing: The country’s flag carrier Philippine Airlines (PAL) is set to start nonstop direct flights between Cebu and Los Angeles by March 2016.

The second new terminal would be up and running by 2018 still, or three years from now, but the operator GMCAC could not wait for its completion to do something about the volume of passengers in the airport. The company has already organized the various tourism groups in Cebu, the hotels and the tour operators, even involving the Department of Tourism, to exert all effort to promote Cebu as a tourist destination.

Official statistics showed that the foreign arrivals to the country mainly came from South Korea, Japan and the United States, meaning, nothing actually changed because these were the same origins of our foreign tourists in the past few decades.

To tap tourism markets such as China and Europe, GMCAC joined forces with the tourism groups in Cebu on an aggressive promotional campaign, which should then explain the new tag of MCIA as a ‘resort airport.’

Now, as soon as the DOTC privatized the MCIA terminal operations, expectations of much improved services suddenly went up to the skies, particularly among the actual paying customers of the airport. GMCAC thus rushed some innovations, such as the completely new layout of the terminal to get rid of the long queues of passengers at the security gates and at the airline counters, even redirecting the flow of people to pass through the rows of food and souvenir outlets in the terminal, which surely made the stores happy.

Well, the company introduced new signage throughout the terminal using four different languages, set aside one whole area for greeters (with a Jollibee outlet), built a new lounge for special events like the Apec, put up self-check-in kiosks and a dozen ATMs, dedicated a waiting-cum-parking area for taxis, and even fixed the toilets.

By the way, the group of the world renowned interior designer Kenneth Cobonpue, a Cebuano himself, designed the new toilets in the existing terminal and, believe me, it was five-star hotel quality, even fit for featuring in design magazines.

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And before I forget, let me offer a wager to anybody out there you will get the entire inheritance of my neighbor from his mother-in-law, if you can find one single broken floor tile at the Cebu airport terminal today.

TAGS: Business, column, conrado banal iii, DoTC

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