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Airbus sees Philippine demand for bigger single-aisle aircraft

HAMBURG, Germany — Airbus SE said Philippine demand for air travel is expected to grow 7% a year, expanding the market for larger single-aisle aircraft like its A321, with the size of the operating fleet needed to serve such demand tripling to about 600 planes by 2038.

“I think that we must be prepared for more sales campaigns in the Philippines because the Filipino carriers will need to increase their fleet,” Aymeric Dupront, head of Airbus’s airline marketing in Southeast Asia, Japan, India and Israel, told reporters here.

He said Airbus sees “7% traffic growth” in the Philippines each year. “This means that traffic is bound to triple between now and 20 years from now, and that is 2038,” he added.

Mr. Dupront said “more than 200” aircraft are needed to service the Philipine market today, both for domestic and international flights.

“Over the next 20 years, we see this need to triple to 600 aircraft. The traffic, if you do the math, will actually more than triple or almost quadruple, so what we see is a trend for bigger aircraft, bigger single-aisle aircraft like the A321,” he said.

He said the Airbus fleet in the Philippines consists of about 132 aircraft, most of them from the A320 family of single-aisle twin-engine jets, of which the A321 is a high-capacity version seating up to 236 passengers. His view of the market is that the “fast pace” of passenger growth will drive all Philippine carriers to acquire larger single-aisle aircraft.

“The A321neo has been selected by all the carriers in the Philippines, and that’s the first target for deliveries for the years to come for the Filipino carriers,” he said, referring to the model version with the New Engne Option, which promises greater efficiencies compared with older versions of the A320 family of jets.

Asked about the drivers of air traffic growth in the Philippines, he said: “What we see is the very fast rise in three things: the population, first of all; the rise of the middle class, and middle class is the bulk of the passengers for air transport; and third thing is the rise of the economy and this results in this 7% domestic traffic growth.”

Reporters were in Hamburg to witness the turnover of a new Airbus jet to Malaysia’s AirAsia Group Bhd, the first of an order of up to 353 A321neos.

Philippines AirAsia, Inc. Chief Executive Officer Ricky P. Isla has said the low-cost carrier is itself currently in the process of “concretizing plans to purchase an A321neo” from Airbus.

Mr. Isla said that investing in larger additional aircraft will be “advantageous for any airline in a slot-constrained environment,” especially at Manila’s Ninoy Aquino International Airport.

He also noted that the A321neo, which has 50 more seats compared to the previous A320neo, provides “opportunities to offer even lower fares to flying guests.”

Other features of the A321neo include lightweight and slimline seats with a mobile phone or tablet holder; three rows with a seat pitch of 37” or above; three additional rows equipped with hot seats; USB power in every seat; and Rokki WiFi providing entertainment, shopping, and Internet speeds of up to 10MB/s.

Airbus said that the A320 family received a total of 7,000 orders from at least 110 customers globally as of the end of October. — Arjay L. Balinbin

Philex says Silangan timetable could slip if no financing by first half of 2020

BAGUIO CITY — Philex Mining Corp. said the initial stages of development of its Silangan gold and copper project in Surigao del Norte could be delayed if it canot raise $350 million in financing by the first half of 2020.

“Depende pa din sa availability of funds pero for sure if by 2020 wala pa yung initial money for early works, the timetable will move (It depends on the availability of funds but for sure if by 2020 there is still no initial money for early works, the timetable will move),” Philex Mining President and Chief Executive Officer Eulalio B. Austin, Jr. said on the sidelines of an event here.

“Supposedly, in our timetable, we need $350 million to come in the first half of 2020. That’s why we need to talk to our investors,” he noted.

The company is targeting to finalize its list of possible investors by December.

Mr. Austin said that the search for investors is challenging due to the regulatory climate, including the ban on open pit mining, and a moratorium on the issuance of new mining permits.

“For us, we can only talk about the track record of Philex Mining. For more than 60 years in operation, we have been advocates of principled mining and we have the full trust of the community in Surigao,” he said.

Philex appointed J.P. Morgan to advise on equity investment and Mizuho Finanical Group for project financing.

“Our financial advisor is looking into companies that have already some investment in mining so that during due diligence, medyo madali lang (it will be easier),” Mr. Austin said, adding that the company is open to any party that can help get the project going before its Padcal mine in Benguet ceases operations.

The Silangan mine has three deposit areas, Boyongan, Bayugo, and Kalayaan, with the latter a joint venture with Manila Mining Corp. This might be Philex Mining’s biggest source of revenue after the 61-year-old Padcal project closs in 2022.

The total estimated capital expenditure for the development of the first phase of the project, Boyongan, is $750 million. It has an estimated mine life of 22 years and is designed to produce four million tons per year. Target date for commercial operations is July 2022.

The operation of the Silangan mine was originally set to begin in 2018, but has been moved to 2022 due to the ban on new open-pit mining introduced in 2017. It has since shifted to underground sub-level cave mining, which was approved by the Environment department through the Mines and Geosciences Bureau (MGB) as announced by the company on Oct. 10.

Philex Mining is one of the three local units of Hong Kong-based First Pacific Co. Ltd., the two other being PLDT, Inc. and Metro Pacific Investments Corp. Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains an interest in BusinessWorld through the Philippine Star Group, which is controls. — Vincent Mariel P. Galang

SMC pilot-testing road made from recycled plastics

SAN MIGUEL Corp. (SMC) said it conducted pilot tests on the first road in the Philippines made from recycled plastics, to help address the country’s plastic waste problem.

“What we want to achieve is to help address an important environmental issue, and that is plastic waste. We want to create a sustainable use for waste plastics so that they don’t end up in landfills and our rivers and oceans,” SMC President Ramon S. Ang said in a statement.

The test site occupies 1,500 square meters (sq.m.) at the company’s logistics center in General Trias, Cavite. The site is normally a marshalling area for trucks containing heavy loads and heavy equipment, and can be expected to demonstrate the materials’ resistance to wear and tear.

About 900 kilos of plastic waste equivalent to 180,000 sachets and plastic bags were used, serving as binder with bitumen for the production of asphalt. The added plastics can help make roads last longer than those usinge conventional asphalt.

Its partner in the development of the recycled plastics road is Dow, Inc., a US materials science company.

Further tests will be conducted in SMC’s other facilities and major infrastructure projects.

Last week, SMC said it will start using biodegradable plastics for its packaging.

It will be using plastics developed by the Philippine Bioresins Corp., which can be 64.65% degraded in two years, compared with 4.5% for other plastics over the same period.

The Department of Science and Technology (DoST) has issued the product an Environmental Technology Verification certificate.

SMC also dropped its Purewater bottled water business Purewater in 2017.

SMC fell 1.94% to P156.90 on Friday. — Vincent Mariel P. Galang

Grab won’t dispute PCC’s P23.45 million fine, refund order

RIDE-HAILING firm Grab Philippines said it will not dispute the fine imposed by the antitrust regulator for breaching its initial pricing commitment.

The Philippine Competition Commission (PCC) ordered Grab Tuesday to pay a P23.45 million fine, P5.05 million of which should be refunded to consumers.

“Grab will abide by the PCC’s order to pay a P23.45 million fine, of which P5.05 million will go to our consumers; and recognizing the value of our tens of thousands of driver-partners, the entire fine will be borne solely by Grab, as it has with those which have been imposed in the past and in any of our markets,” President Brian P. Cu said in a briefing.

Mr. Cu said around 3 million Grab consumers who booked rides from February to May 2019 will receive an average refund of P1.50.

“(T)he average…a passenger will get is around P1.50. There are some that will get below a peso, there are others who will get over a hundred pesos, depende po ‘yon kung magkano at gaanong karaming trips tinake niyo (depending on how much they paid or how many rides they booked),” he said.

“We are firming up the disbursement procedures and we will inform our consumers within the time frame mandated by the PCC. Moving forward, Grab will work closely with the PCC in fulfilling its new set of voluntary commitments,” he added.

The amounts will be disbursed to the GrabPay Wallets of consumers within 60 days from Nov. 14.

Grab, meanwhile, has to pay to the government fines of P11.3 million and P7.1 million for the first and second quarter, respectively.

Mr. Cu also said that the fines will be paid out of a Grab contingency fund, with the payouts expected to affect the budgets of programs like driver inventives and promotions.

“None of these will be passed on to consumers or drivers,” he said.

Mr. Cu also maintained that the company has not overcharged passengers because it has always complied with the fare matrix set and approved by the Land Transportation Franchising and Regulatory Board.

“And while Grab has always operated within this legal fare structure, however, there are current market conditions affected by uncontrollable factors — such as the supply of transport network vehicle services, booking demand, and traffic conditions — that have hindered us from maintaining the fare-in-range set by the PCC,” he said.

The PCC also announced Tuesday the approval of Grab’s undertaking, a condition for its acquisition of Uber’s Philippine operations.

In the undertaking, which took effect on Nov. 1 and will apply for a year, Grab is to provide refunds to its customers for breaching the 22.5% ceiling on the average fare increase per month before its acquisition of Uber’s Philippine operations, after Uber withdrew from a number of markets in the region.

PCC Chairman Arsenio M. Balisacan said the undertaking prevents Grab from “behaving like a monopolist to the detriment of the riding public.”

Grab may ask to be freed of the undertaking if a competitor enters the market and builds at least a 20% market share or two or more players seize a combined 30% market share. — Vann Marlo M. Villegas

United Airlines opposes PAL-PAL Express codeshare on Guam flights

UNITED Airlines, Inc. filed its opposition to plans by Air Philippines Corp. (APC), also known as PAL Express, to codeshare with parent company Philippine Airlines, Inc. (PAL) on services between Manila and Guam.

In a document published by the US Department of Transportation (DoT) on Nov. 18, United said it “objects to the application” of APC for a statement of authorization allowing it to display the airline designator code of its parent PAL on scheduled flights between Manila and Guam that the Philippine carriers plan to introduce in March.

United requested the DoT to “defer action” on APC’s request which was filed on Nov. 6.

“United objects to the application to the extent it seeks benefits that are currently being denied to United and its customer base,” the American carrier said in its communication to the DoT.

United, which currently operates flights between Guam and Manila, said it also wants to “increase its Philippine service by an additional daily flight” at Ninoy Aquino International Airport, but it has been “refused slots and other airport infrastructure necessary for its additional flight plans.”

“Philippine carriers have increased capacity to the US. For example, PAL has increased US-Manila flights by 25%, seats by 30%, and available seat miles (ASMs) by 35%,” it noted.

United said the Philippine carrier also launched New York-Manila service in late 2018 and “added frequencies in the Los Angeles-Manila and San Francisco-Manila markets.”

It said the slot and airport access challenges it has experienced in Manila “must be rectified before the Department approves” the APC’s application.

In its request filed on Nov. 6, as published by the DoT, APC said: “APC and PAL intend to introduce code-sharing on Manila-Guam flights operated by APC beginning on or about March 5, 2020, and APC requests prompt approval of this application to facilitate PAL’s earliest possible marketing and sales services.”

“APC requests that the code-sharing statement of authorization remain in effect indefinitely, consistent with the Department’s standard practice pertaining to code-sharing statements of authorization,” it added.

APC said its parent PAL already “holds necessary economic authority” to engage in a code-sharing arrangement, noting that it has a foreign air carrier permit from the DoT which allows it to transport persons, property, and mail between the Philippines and Guam.

PAL did not immediately respond when asked to comment. — Arjay L. Balinbin

Alsons starts building river hydro plant, launches new coal-fired unit

ALSONS Consolidated Resources, Inc. (ACR) launched on Friday construction of a 14.5-megawatt (MW) hydroelectric power plant in Sarangani while marking the inauguration of the second unit of its 210-MW coal-fired power plant in the same province.

“The two power projects that we are showcasing this afternoon represent our own modest contribution in support of the President’s commitment to provide the needed infrastructure for the economic growth and sustainable development of Mindanao and the rest of the country,” ACR President and Chairman Tomas I. Alcantara said in a speech to mark the two milestones.

President Rodrigo R. Duterte attended the two launches. ACR claims to be the first private-sector power generator in Mindanao.

Mr. Alcantara said the projects are in line with the government’s vision of “a Mindanao that enjoys the benefits of power security and the preservation of the environment by employing both traditional thermal baseload power and renewable energy.”

Sarangani Energy Corp.’s $570-million baseload plant began operating its first 105-MW unit in 2016 and started commercial operations for its second 105-MW unit in October this year. The power plant serves more than six million people in 10 provinces and 12 cities in Mindanao, including Cagayan de Oro, General Santos, Iligan, Butuan, Digos, Dipolog, and Pagadian.

ACR said the plant is the single largest power investment in Sarangani province and the entire Region 12. Sarangani Energy is majority owned by Alsons Thermal Energy Corp., a partnership between ACR and Global Business Power Corp. Its other shareholder is Japan’s Toyota Tsusho Corp.

The P4.5-billion Siguil hydropower plant is the Alsons power group’s initial entry into renewable energy. It is expected to begin commercial operations in 2022 to power Sarangani province, General Santos City and key municipalities of South Cotabato.

ACR said Siguil hydro will be the first of eight run-of-river hydro power facilities that the group plans to develop in Zamboanga del Norte, other areas in Mindanao, and Negros Occidental in Western Visayas.

The Alcantaras’ power business currently operates four power facilities in Mindanao with a total generating capacity of 468 MW.

On Friday, ACR was 0.82% higher at P1.23. — Victor V. Saulon

Negros Island Biomass targets three operational plants by end of year

NEGROS Island Biomass Holdings Inc. hopes to have three operational biomass plants this year and avail of the benefits offered by the government’s feed-in tariff (FiT) scheme.

San Carlos BioPower, Inc., one of the three biomass plants, achieved a power generation level of 20 megawatts (MW) on Sept. 21. It is said to be the first in the world to purely run on sugarcane waste material.

Two more biomass power plants — North Negros BioPower, Inc. with 25 MW and South Negros BioPower, Inc. with 25 MW — will be connecting to the grid within this year. The P16-billion project is funded by global investment firm ThomasLloyd Group Ltd.

Arthur N. Aguilar, president of the BioPower projects, said in a statement that San Carlos BioPower “has accomplished its proof of concept from the logistical system of sugarcane trash collection to the conversion to electricity.”

The plants, which will generate 70 MW of baseload capacity, are to be fueled mainly by sugarcane field residues sourced within Negros.

“The team is pleased to finally have (San Carlos BioPower) connect and export power to the grid. Our goal is to have all three of our plants running by end of this year and improve the quality of power in the island of Negros,” Mr. Aguilar said.

The plants will be supported by 12 company-owned and -operated transloading stations in Negros to annually collect and use more than 610,000 tons of feedstock.

“We have among the largest agricultural fleets to have sufficient collection capabilities for fuel inventory, while also having around 1,500 employees to support our day-to-day operations,” Mr. Aguilar said.

The biomass plants’ use of cane byproduct is expected to provide 510 gigawatt-hours of energy in its first year of operation. They are estimated to power 160,000 homes and reduce carbon dioxide emissions by 57,680 tons.

The holding firm said the biomass projects in Negros have provided development in host communities, while raising farmer incomes.

“BioPower’s collection of cane trash is as important as bagasse feedstock for fuel. It adds value to diversifying the sugar industry and mitigates the practice of open field burning, without additional investment from planters,” it added.

The biomass plants are vying to be eligible for FiT, an incentive scheme that grants priority connections to the grid, priority purchase and transmission of, and payment for, electricity generated from renewable energy sources wind, solar, ocean, run-of-river hydropower and biomass.

Under the rules, eligible RE developers are guaranteed a rate for 20 years for each kilowatt they produce. — Victor V. Saulon

Global Business Power signs 4-MW Boracay supply deal with GERI township

GLOBAL Business Power Corp. (GBP) said Friday that its retail electricity supply business signed a 4-megawatt (MW) contract to supply power to a township in Boracay.

The contracting parties are GBP unit Global Energy Supply Corp. (GESC) and Global Estate-Resorts, Inc. (GERI), which is behind the 140-hectare Boracay Newcoast.

“Our partnership with GERI comes at such an exciting time, as this retail supply agreement harnesses the synergy between the energy and real estate sectors and is well-positioned to tap into the country’s dynamic tourism sector,” GBP president Jaime T. Azurin said in a statement.

He said the partnership could further boost the tourism sector. He noted GBP’s commitment to boost its service offerings to clients as it aims to become a total sustainable energy solutions provider.

GERI, a subsidiary of Megaworld Corp., is currently developing its first master-planned community on the island, which will consist of five districts: Newcoast Village, Oceanway Condominiums, Savoy, Belmont and Chancellor Hotels, Boracay Town Center, and Newcoast Station.

“We are proud to share with GERI the same passion for nation-building,” Mr. Azurin said.

GBP quoted GERI President Monica T. Salomon as saying: “We thank GBP for helping us meet our energy requirements in Boracay and we are excited to harness opportunities for mutual growth.”

The power supply deal between GESC and GERI is made possible by regulations on retail competition and open access (RCOA), a requirement of Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001, the law that restructured the energy sector.

RCOA allows contestable customers, or those whose average peak demand for the past year reached the threshold set by the Energy Regulatory Commission, to freely choose their electricity supplier. — Victor V. Saulon

Manila-bound PAL plane makes emergency landing in LA

A PHILIPPINE Airlines flight bound for Manila suffered an apparent engine failure on Thursday shortly after takeoff from Los Angeles and made an emergency landing, authorities said.

All 347 passengers and 18 crew aboard Flight 113, a Boeing Co 777 widebody, are safe, an airline spokeswoman said.

Pilots of flight 113 declared an emergency and reported a possible engine failure, Los Angeles International Airport said.

A witness on the ground described “bursts of flames” coming out of an engine.

The US Federal Aviation Administration said the plane returned and landed safely. Television station ABC-7 in Los Angeles aired video of the aircraft after takeoff that showed flames and smoke coming out of the right engine.

The plane landed around noon local time (2000 GMT) and was met by the Los Angeles Fire Department, the airport said. The emergency landing did not affect other flights.

Although the cause of the apparent engine failure was not immediately clear, it comes as Boeing faces intense scrutiny over twin deadly crashes involving its 737 MAX single-aisle jetliner. The 737 MAX has been grounded worldwide since March.

GE Aviation, a unit of General Electric, which makes the GE90 engine for the 777 twin-aisle jetliner, said it was aware of the incident and was “working with the airline to determine the cause of the event and to promptly return the aircraft to service.”

Boeing said it was aware of an incident regarding Philippine Airlines and was closely monitoring the situation.

“You saw bursts of flames, little flames shooting out from the engine,” said Andrew Ames, a 36-year-old fitness professional in Los Angeles, who watched as the 777 ascended over the ocean after takeoff. “It almost looked like backfire flames from a motorcycle or car.”

“I had never seen a plane spew flames repeatedly. Then it stopped. As soon as it stopped, I saw the plane bank left, like it was heading back to airport,” Ames said.

The Philippine Airlines spokeswoman said the flight crew noticed smoke in the plane’s second engine, declared an emergency and returned safely to the airport.

“All passengers are safe and sound,” spokeswoman Cielo Villaluna said. “They are all being assisted to another flight.” — Reuters

Philippine eyes arms deal with South Korea

THE Philippine government might continue discussions on the procurement of military ships and weapons during President Rodrigo R. Duterte’s second visit to South Korea next week, Foreign Affairs department said on Friday.

“Defense procurement with the Republic of Korea is ongoing,” Foreign Affairs Assistant Secretary Junever Mahilum-West said at a televised briefing.

Mr. Duterte on Tuesday said his visit to South Korea was vital because he planned to acquire arms.

He will attend the Association of Southeast Asian Nations-ROK commemorative summit in Busan, during which he would meet with other Asean leaders as well as South Korean President Moon Jae-in.

Mr. Duterte will be joined by Foreign Affairs Secretary Teodoro L. Locsin, Jr., Trade Secretary Ramon M. Lopez and Social Welfare Secretary Rolando Joselito D. Bautista.

The president last met with the heads of Asean member-states and President Moon at the Asean Summit in Bangkok in October. This will be his second visit to South Korea during his term.

The Philippines and South Korea are expected to sign agreements on education, tourism and social security, among other things, Ms. West said.

Summit participants are expected to issue a joint vision statement for peace, prosperity and partnership. The co-chairman will also issue a statement on the commemorative summit.

“These two represent the strong partnership between Asean and ROK,” Ms. West said.

The summit will focus on the 30-year cooperation between Asean states and South Korea as well as connectivity and concerns on security in the Korean peninsula.

Mr. Duterte won’t have time to meet with the Filipino community in South Korea during his two-day visit, she added. — Charmaine A. Tadalan

Customs to block vape products

THE Bureau of Customs (BoC) has ordered ports nationwide to block imported vapor products after President Rodrigo R. Duterte outlawed their use.

“All importation of vape products and related items shall immediately be subject to seizure by the Bureau of Customs,” it said in a statement on Thursday.

The bureau said it had consulted other regulatory agencies including the Food and Drug Administration before it issued the order.

The import ban covers only vape products, Customs spokesman Jet Maronilla said in a mobile-phone message. “All tobacco-based products like heated cigarettes are technically not included,” he added.

Mr. Duterte on Tuesday ordered law enforcers to arrest anyone vaping in public, and outlawed vape imports after Health authorities confirmed the first vape-related lung injury in the country.

The president said vaping was contrary to public health.

The Health department earlier said the Office of the President was finalizing an executive order for the ban.

Vaping groups have said the ban would lead to vapers going back to smoking cigarettes. They also said smokers should be given alternatives including e-cigarettes and heated tobacco. — Beatrice M. Laforga

Peso barely moves after unclear US-China dialogues

THE peso barely moved against the dollar on Friday as talks between the world’s two biggest economies to finalize their trade deal continued to be uncertain.

The peso closed at P50.80 a dollar, only 6.5 centavos stronger than a day earlier, according to data from the Bankers Association of the Philippines (BAP).

The peso opened at P50.89 a dollar dollar, strengthened to as much as P50.725 and weakened to as much as P50.845 against the greenback.

Dollars traded slipped to $1.099 billion from $1.439 billion on Thursday.

The local currency barely moved against the greenback this week due to the clout of the US-China trade deal talks, a trader said.

“The peso ended slightly stronger because some institutions were anticipating their flows this month and as remittances come in as the holiday season gets closer,” he said by telephone.

On Thursday, the Chinese commerce ministry said it would seek to finalize a “phase one deal” with the US.

“This is in line with the interests of both China and the United States, and of the world,” said Gao Feng, a spokesman at the ministry.

Previously, sources including trade experts and those close to the White House told Reuters that a phase one deal finality could slide into 2020 with Beijing looking for more “extensive tariff rollbacks” while the US countered with new demands for its part.

US President Donald J. Trump told reporters in Texas on Wednesday that China was not “stepping up to the level that I want.” — Luz Wendy T. Noble with Reuters

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