Great things to come

Cebu Pacific yesterday officially joined the growing list of both Philippine and foreign air carriers that could not refuse the promise and huge potential that the international airport in Clark offers, as the Gokongwei-owned company launched its maiden flights from the former American air base to Hong Kong, Bangkok, Singapore and Macau.

Aside from Cebu Pacific, others that are now offering flights from Clark to several destinations in the Philippines and other countries and back include Tiger, Sea Air, Asiana, Air Asia, and soon, Zest Air and Spirit of Manila.

With the influx of flights originating and destined for the Diosdado Macapagal International Airport or DMIA, Clark International Airport Corp. (CIA) president Victor Luciano wants the second terminal up by the first quarter of 2010.

A bidding conducted for the construction, management, and operation of DMIA’s Terminal 2 recently was declared a failure after Admiral Energy, the lone bidder, did not pass the post-bidding qualification requirement – airport operator experience.

Luciano tells us that there was nobody in the Admiral Energy consortium that possessed this very important qualification, forcing CIAC to declare a failure of bidding. The construction, operation, and management of Terminal 2 was supposed to be a 70-30- joint venture between the winning bidder and CIAC, respectively, with the private sector partner putting up the required funds.

But the dynamic head of CIAC sees the failure of bids more of an opportunity than a failure.

CIAC is now looking at three options in order for the process of putting up the new terminal to be in place by end-November this year.

The first is still via a joint venture between a private group and the CIAC through an unsolicited proposal. According to Luciano, the proposal can cover just the construction and operation of the second terminal or a bigger facility covering other aspects of the airport.

The second involves a second bidding. There were 11 parties, including big names in Philippine business (including the Ayala group and Asia Emerging Dragons Corp.), that bought the bid documents during the first bidding, but only two underwent the prequalification process and one was prequalified.

Luciano said they are now more open to reviewing the terms of reference of the bidding itself, including a calibrated construction of the new terminal.

Many of those that initially expressed interest in entering into a joint venture with CIAC for Terminal 2 are proposing that instead of building a terminal that will have a seven to eight million passenger capacity immediately, the project should begin with a smaller capacity, say three to four million, and then expand it based on passenger growth.

The CIAC administration is now open to this proposal, which will assuage apprehensions that a huge capacity from the start may just create a “white elephant.”

The third proposal sounds promising. CIAC is looking at official development assistance or ODA as a possible source of funds for the construction of the terminal.

Luciano explains that the ODA source has the choice of having its choice private group as an equity partner in the venture, or CIAC can just operate the facility.

One of the possible sources is Korea, which Luciano said is quite optimistic with the prospects of Clark as the new international gateway, after having conducted a feasibility study on the project.

The DMIA is envisioned to be the future international gateway of the Philippines, with an expanded first terminal capable of handling two million passengers.

Gokongwei earlier emphasized that Clark is the gateway for central and northern Luzon and CEB’s fourth operational hub, aside from Manila, Cebu and Davao.

He pointed out that airline service will play a pivotal role in economic growth in Clark and CEB is committed to being a catalyst for this growth.

Gokongwei said they expect a huge potential for growth in this part of the country, pointing out that DMIA has a catchment area covering eight million people within a 100 kilometer radius.

CEB will base an Airbus A319 aircraft in Clark and will operate daily flights from Clark to Hongkong and Singapore; four times weekly to Macau; and three times weekly to Bangkok. It will also operate its Cebu-Clark flights.

CEB is the only Filipino carrier operating international flights out of Clark and is the only airline offering a direct Clark-Hongkong and Clark-Bangkok service. Carriers operating in Clark include Tiger, Air Asia, Asiana, and Seair.

Aside from the $40 million investment in the aircraft that will be fully based in Clark, CEB is also investing in the necessary crew and ground support in Clark.

CEB’s Clark hub is the company’s third investment in the area. The first was its investment in a fully automated simulator and the second was made last year when the airline entered into a joint venture with Singapore Airlines for a heavy maintenance facility in Clark.

Groundbreaking for this is scheduled for the second quarter of next year and is expected to create 500 new jobs. CEB invested around S$70 million in this joint venture project. Aside from servicing the maintenance requirements of CEB in Clark, Gokongwei said they hope to get the contracts to maintain the aircraft of the other airlines operating at DMIA.

Everything seems to be on track to attaining President Arroyo’s vision for this part of Central Luzon and specifically for Clark. The Ninoy Aquino International Airport (NAIA) is badly in need of decongestion and DMIA appears to be the only solution at this point. (Because NAIA only has one runway as against DMIA’s two, imagine the air traffic resulting from several flights intending to take off and land at around the same time.) And with a hard-working and highly motivated person at the helm of CIAC, the President’s dream will definitely soon be realized.

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