Solving the Naia conundrum

Conundrum: A problem or puzzle that is confusing or difficult to solve.

Such is the case of the Ninoy Aquino International Airport (Naia). It is a problem that is seemingly intractable, although not bereft of solution.

Naia is the country’s premier air gateway located in Metro Manila.

With a design capacity of 31 million passengers per annum (mppa), it had, in 2012, exceeded that capacity by 800,000 passengers.

By 2017, Naia was bursting at the seams with 42.5 million passengers accommodated under very trying conditions, with jam-packed terminals and flight delays the norm.

Day dawneth?

How does one solve a problem like Naia, with almost six years going and a continuing debate over its fate, recently heightened by the 36-hour closure of its main runway? But, as the English theologian Thomas Fuller said—it is always darkest before the day dawneth.

By many indications, the dawn may be at hand, particularly on the Naia puzzle.

The deluge of disparate solutions contributes to the conversation although confusing to the public.

Supposedly, Naia needs a new runway to expand its capacity and, absent that, should be replaced by a new one to be built elsewhere, as the airport had “exceeded its saturation point.”

Others suggest Naia be re-worked into a large-scale, mixed-use development as was done with Fort Bonifacio.

A recent survey conducted by the Social Weather Stations indicates, however, that 62 percent prefer the retention of Naia and 22 percent favored Clark in Pampanga as the alternate site.

System developments

Opinion makers ought to consider game changing developments being introduced by the Department of Transportation (DOTr) as they are highly relevant.

These developments will have the effect of significantly altering conventional wisdom on airport capacity such that assumption of Naia’s limited useful life is put into serious question.

For instance, additional capacity is being progressively added to airports in Clark, Mactan, Bohol, Bicol, Puerto Princesa, Davao, Cagayan de Oro, among others, to accommodate the increasing number of direct international flights that bypass Naia. Point-to-point flights are transforming Clark and Cebu-Mactan into a hub of their own.

Night rating of more airports allows flights in Naia to be spread out, instead of being crowded within a shorter operating window.

Additionally, the recently installed CNS/ATM system in Naia, complemented by radars throughout the country, will vastly improve airspace and airport surveillance and control for flight safety and operational efficiency.

All these measures are being implemented or already in place.

Complementation strategy

Another important factor in this puzzle is the airport complementation strategy of the DOTr which the Management Association of the Philippines (MAP) supports.

In our view, state-owned Naia, Clark and Subic would be the ideal core components of this strategy as these airports are operational and can have a potential combined capacity of 150 million passengers when fully optimized.

Subic airport already has a 747-capable runway and can play an important complementary role to Clark, especially when the planned rail link to Clark is completed.

These three airports can be integrated into an aviation system.

Linked with rail when the Manila to Clark commuter train is completed in 2023, this system can efficiently serve air travellers in Mega Manila, Calabarzon, Central Luzon, as well as part of Northern Luzon.

Naia’s sustainability

An important question in this debate is the sustainability of Naia.

The answer lies in the rehabilitation proposals submitted by two private consortiums—the Naia Consortium (NC) composed of seven conglomerates and GMR-Megawide (G-MW).

Availing of foreign technical expertise, these proponents believe Naia’s usefulness can be significantly optimized by introducing comprehensive improvements to its infrastructure and management, without building a new runway.

Both consortia propose improving Naia’s two cross-runways to vastly increase efficiency of flight operations and expanding terminal capacity to substantially increase passenger throughput.

These proposals show the feasibility of rehabilitating Naia and that there is enough private sector interest to undertake the job.

In a nutshell, proponents NC and G-MW propose to progressively raise passenger capacity in four years to between 65 and 70 million passengers, or 53 percent over the 42.5 million passenger throughput in 2017.

And the proponents are backing their proposals with their money: P105 billion in the case of NC with a concession period of 15 years to operate the facility, and $3 billion or P160 billion for G-MW in exchange for an 18-year concession.

The NC was granted original proponent status which G-MW may challenge with a better offer that may, in turn, be matched by original proponent NC.

The process appears to be moving and a decision on these proposals may be in sight.

Clark master plan

Clark International Airport, on the other hand, has a master plan and space for three runways for a total capacity of 60 to 80 million passengers.

A new terminal is under construction by G-MW with completion slated for 2020.

Eight million will be added to the current 4 million to bring total capacity to 12 million by 2020.

Unlike Naia’s curving T1, Clark’s rectangular modular terminal design allows seamless extension for capacity expansion by increments of 8 million, or multiples thereof, until its master-planned capacity of 80 million is reached.

Air travel is projected to grow at an annual rate of 6 percent.

Based on this projection, passenger demand in Naia and Clark will rise from 44 million in 2017 to 60 million in 2022.

By that time, Naia would have a capacity of 65 million, after upgrade, and Clark would have 12 million, after completion of the new terminal, or a combined capacity of 77 million.

By 2035, demand may reach 126 million versus a potential combined capacity of 150 million for Naia, Clark and Subic.

These numbers may change if significant demand and supply dynamics beyond current projections should emerge in the future.

Given these dynamics, the demand pressure on Naia will be progressively relieved.

Thereby, MAP believes that Naia can continue operating at its optimal capacity, be it 60 or 70 mppa, and just stay at that level for an indefinite period to reap the great advantage of a city airport much like that of Haneda in Tokyo, HongQiao in Shanghai, Gimpo in Seoul and many others.

These airports were planned for closure but are being maintained and improved to complement airports located far from the city.

These are models that policy makers must seriously consider and emulate.

Oppose closure of Naia

The useful life of Naia is a function of three factors: infrastructure, technology and management.

When all these factors are provided, Naia can be sustained indefinitely and, given its strategic location, provide convenient access to travellers within its natural catchment market.

Closing Naia will be a drastic move and counter-productive to the economy of Mega Manila.

It is a valuable state asset operating viably, compliant with international flight safety regulations and supported by a road network that can be augmented by rail transportation. For these reasons, MAP opposes the closure of Naia.

Beyond the full development of state-owned Naia, Clark and Subic, the DOTr and the Department of Finance have set the conditions for unsolicited proposals for new airports.

MAP has no reason to object as additional investment in new aviation infrastructure will be allowed albeit within parameters, apparently, intended to protect government interest, including the sustainability of state airport assets.