Outsource CAAP, NAIA management

Albert Einstein was supposed to have defined insanity as doing the same thing over and over again and expecting different results. That is exactly how government is managing its aviation regulatory functions through the Civil Aviation Authority of the Philippines (CAAP) and NAIA, our premier international airport. It is time to do something different.

Last week, the aviation navigational facilities managed by CAAP at NAIA failed for the second time in October. Again, it forced the diversion of at least a dozen international and domestic flights to Clark. It is costing the airlines a pretty penny but they are afraid to more forcefully speak out on the incompetence of their regulator.

The cost and the inconvenience of those diversions to the airlines and to the thousands of passengers should be enough for P-Noy to take notice. Still more important is safety. What if those creaky ancient navigation facilities conk out at a perfect moment for a really catastrophic disaster to happen? Our lives are at stake!

Again last week, CAAP, as usual and as expected, flunked a review conducted by inspectors from the International Civil Aviation Organization (ICAO). That means the Philippines will remain in Category 2 status. No good news before Christmas as the CAAP Chief hoped.

 Two “significant safety concerns [SSC]” were reported to have been left unaddressed during the 10-day evaluation. CAAP, according to the inspection team, failed in “aircraft registration and flight safety inspection.”

These deficiencies have been long running problems and I frankly don’t see favorable resolution under government auspices. The aircraft registration function involves getting the right IT solution in place. That sounds simple enough. But getting the right people to man it who are technically capable, willing to receive government pay and not susceptible to corruption seems like a tall order.

Then there is flight safety inspection. At present we have Piper cub pilots being tasked to be check pilots for 747s. Why would a 747 or Airbus captain want to be a check pilot receiving government pay at CAAP?

I understand that foreign regulators also want to see a program to develop the technical skills of our young people to properly man our aviation regulation and services sector. Signing up retired PAL pilots as check pilots may work as a stop gap measure but not good enough for the long term.

The air traffic controllers, on the other hand, are getting older and the young ones move on for better pay and work conditions elsewhere abroad. They are also overworked, not good for such a mentally demanding job.

I think it is time to say we cannot do it via the government route. The rules of the bureaucracy are just too cumbersome and unresponsive to the special needs of running CAAP and NAIA. It is time to think of outsourcing the jobs.

It is no longer so unusual to think that regulation can also be outsourced by government. There are many governments looking at the private sector not just to provide services to the public like delivering mail. Many governments have also started to outsource the implementation of regulatory policy as well.

In the case of CAAP, it is likely that the private sector company that could run some of its regulatory functions will be foreign. In the case of NAIA, airport management is something many Filipinos can do quite well but they need to be out of government to perform to world standards. The Filipino running Changi International Airport is a good example.

I realize there would be those in government who will say that outsourcing CAAP and NAIA management to a foreign entity is an insult to the Filipino. That’s false pride and false patriotism.

Outsourcing regulation of the aviation sector is not so outlandish an idea. CAAP will still be there and will still be responsible for aviation regulation. But functions like air traffic control, aircraft registration and flight safety inspection can be successfully outsourced. The private company will be paid to get qualified personnel of whatever nationality who will perform their functions according to international standards under CAAP supervision.

NAIA airport management on the other hand, can be given to a private management company after a transparent public bidding. There is Filipino capability here but we need experienced professional managers not retired Air Force Generals.

Heathrow among other airports in Britain are owned and managed by a private company, the Spanish firm Ferrovial. China’s sovereign wealth fund last week bought a 10-percent stake in Heathrow. Ferrovial is also selling its stake in another British airport, Stanstead, under orders from the Competition Commission and an American consortium may win the bidding.

Recto Mercene of Business Mirror has a sad story to tell about how dysfunctional CAAP had been.

Mercene reports that “the ICAO group’s visit coincided with the breakdown of the very high frequency omni-directional range (VOR), a crucial navigational aid in major airports that caused the diversion to Clark of nine international flights and three domestic flights.

“On Oct. 9 the VOR conked out again, forcing at least 13 local and one international flight to be diverted to the Diosdado Macapagal International Airport.

“Two years ago, the VOR/DME (distance measuring equipment) failed to be on air for two months after more than 12 years of service.

“The CAAP tried to cannibalize the Subic VOR to replace the so-called defective elements bugging the Manila VOR. The Manila International Airport Authority (MIAA) agreed to fund the purchase of a new VOR, estimated between P80 million and P120 million.”

Since then and a succession of DOTC Secretaries, purchasing a new VOR had become an elusive dream for the country’s supposedly premier international gateway. The details of this failure are too gory to recount in this space.

So we will remain in Category 2 status. That means our flag carrier Philippine Airlines cannot use its newly purchased fleet of B777s to fly its regular US routes as well as expand to new routes in the United States and Europe.

No wonder PAL top honcho Ramon Ang is said to be actively looking for a regional airline from a country with Category 1 rating to buy. Cebu Pacific is also reported to be mulling signing up aircraft wet leases with an American airline so they could fly to the US.

The CAAP Chief said it is premature to say they failed the latest test. The final report, he pointed out, is due in February yet. Perhaps we can give him benefit of the doubt if he says he will resign and support outsourcing if he fails in February. Until then we are tired of keeping our hopes high.

All this mess had been long time running. We were downgraded way back in 2007 when ICAO found 89 SSC during an inspection. Indonesia only took two years to regain status after it was downgraded. It has now been five years for us, two under P-Noy’s watch.

In the meantime, it is stupid for Tourism Asec and DOT spokesman Benito Bengzon to say the CAAP failure to upgrade its rating is unlikely to stop foreign tourists from visiting the Philippines. I am sure this is not how Tourism Secretary Mon Jimenez sees it.

I have had many conversations with Mon J and he has emphasized the need for such things as the rating upgrade, adequate infra like airports, ports and roads to be all in place. That’s why Mon J was active in convincing DOF Sec. Cesar Purisima to see the light on the airline taxes and worked out the problematic overtime problems of Customs and Immigration at the airport.

Mon J knows he cannot meet his 10 million tourist arrival goal unless everything is in place. I expect Mon J to take a leading role in getting top level attention to resolve this Cat 2 issue as well as the delayed NAIA-1 modernization. Mon J is the type of person who will not resort to a consuelo de bobo the way his supposed spokesman did.

“The failure (of CAAP) to obtain Category 1 rating does not in any major way affect the efforts of the DOT to attract foreign visitors,” Bengzon told The STAR.

It does, Mr. Bengzon, it seriously does. Check with Mon J again.

 Superpowers in transition

 This week, the United States will have its presidential election. China will have its 18th National Party Congress that could also prove to be a turning point as new leaders assume office.

For an analysis of the two events, here is the link to my column on the ABS-CBN News website: http://www.abs-cbnnews.com/blogs/insights/10/29/12/superpowers-transition

Bridges

A reader sent me this quote supposedly from Nikita Khrushchev.

Politicians are the same all over. They promise to build a bridge even where there is no river.

Boo Chanco’s e-mail address is [email protected]. Follow him on Twitter @boochanco