US sees bright prospects in PH aerospace sector

The Philippine aerospace industry has been identified by an American government agency as one of the “best prospect” industries for US-based firms, as it was seen offering significant opportunities for investment.

This was despite the fact that the value of the local industry was relatively small at a total market size of $2.58 billion as of end-2014, data from the US International Trade Administration (ITA) showed.

The total market size of the Philippine aerospace industry was also expected to grow to $2.707 billion this year, and $2.8 billion by next year, while total exports are seen to hit $467.8 million and $491 million in 2015 and 2016, respectively.

Based on a report from the US ITA, the Philippine aerospace industry was attractive due to the Philippine government’s thrust to develop the country’s civil aviation infrastructure, and the ongoing expansions being undertaken by the local airline industry and aerospace parts manufacturers.

“The Philippine aerospace industry presents significant opportunities for airport design companies, aviation consultants, airport ground support equipment, security equipment, wide body aircraft, jet engines, and helicopters,” the US ITA said.

The report noted that there are a number of public private partnership deals and airport projects that can offer US suppliers opportunities for growth and expansion.

Among the best prospects identified by the report included aircraft re-fleeting and upgrade of commercial airlines; navigational aids; airport ground support equipment for the planned airport expansion projects in Mactan-Cebu, and smaller regional airports; airport security equipment including screening equipment for both passenger and cargo, and closed-circuit television (CCTV) cameras, and perimeter intrusion detection system (PIDS); and rotary wing aircraft for multi-role use.

The agency also identified potential opportunities in the various private-public partnership projects which included the $2.4-billion contract for the development, operations and maintenance of five regional airports located in Bacolod-Silay, Iloilo, New Bohol (Panglao), Laguindingan, and Davao.

Other PPP airport projects where American suppliers can participate included the construction of the $158-million New Bohol (Panglao) Airport, and four procurement projects for the Manila International Airport Authority (MIAA) worth $3.5 million.

The report also noted that local airlines such as Philippine Airlines had begun flying direct to the United States.

PAL, which already flies direct to the West Coast, also earlier announced its intention to add more US routes after the country regained its Category 1 rating from the US Federal Aviation Administration (FAA).

Cebu Pacific Air has also started flying direct to Guam and Honolulu, and has plans to mount more direct flights to the US West Coast.

“These route expansions for PAL and Cebu Pacific open up opportunities for long-haul/wide-body aircraft,” the report stated.

According to the US ITA, the Civil Aviation Authority of the Philippines (CAAP) and the DOTC were likewise undertaking the modernization of navigational aids in the Clark International Airport and several other regional airports. More projects related to upgrading airport security equipment are expected through 2016.

The Philippines is now home to three tier 1 original equipment manufacturers namely Moog Controls Corp., B/E Aerospace and Jamco.