By Ashley Erika O. Jose, Reporter
THE Philippines is poised to boost its aviation sector by upgrading the Ninoy Aquino International Airport (NAIA) and other key airports, but this will only be successful if critical infrastructure projects are developed at the same time, according to analysts.
More than three months ago, the private operator of NAIA, the San Miguel-led New NAIA Infra Corp. (NNIC), took over the operations and maintenance of the country’s main gateway.
The government is banking on the multibillion-peso redevelopment of the airport, which has faced criticisms, to help boost the country’s economy by increasing flight capacities and improving services.
Ramon S. Ang-led San Miguel Corp. (SMC) is also the company behind the development of the P740-billion Bulacan International Airport, or the New Manila International Airport (NMIA), which is expected to see development work this year and to be operational by 2028.
This year alone, the Philippines witnessed its aviation projects take off with the recent approval of the joint venture between the Cavite provincial government and the Sangley Point International Airport (SPIA) consortium — making three airport development projects within Greater Manila — casting doubts on the airports’ operational viability.
CONSOLIDATIONAs opposed to competing the operations of the two airports — the Bulacan International Airport with NAIA — Roderick M. Danao, chairman and senior partner of PwC Philippines, said it is likely that the operations of the two airports will be consolidated since the airports are being operated by SMC.
If the current developer of Bulacan will not be able to control NAIA, then they will be competing against each other, Mr. Danao said.
“It can put tremendous pressure on the long-term viability of Bulacan. Remember that it is a P700-billion project. It makes sense that they may want to consolidate the two for better planning and long-term project viability because now you can control the two,” Mr. Danao said in an interview.
If the Bulacan airport and NAIA work in tandem, the airports’ capacity will quadruple naturally, he said.
“We can have more flights inbound and outbound. But here is the challenge now: it does not stop there. That is why the regional airports are being developed. They are the natural tributaries of the passenger volume via Manila,” Mr. Danao said.
For Nigel Paul C. Villarete, senior adviser on public-private partnerships at the technical advisory group Libra Konsult, Inc. and former chief executive officer of Mactan-Cebu International Airport Authority, there is a need to rationalize the number of airports in Metro Manila.
“Vis-a-vis their existing and proposed capacities as well as their locations and distances from each other,” he said.
Airports operate more efficiently with size but only up to a certain point, Mr. Villarete said, adding that the Philippines should not have more airports than what could be more efficiently served by a certain number.
“Locating more airports in strategic locations vis-a-vis the metropolitan area, of course, has its merits, but there remains the economy of bulk, especially with costly infrastructure,” Mr. Villarete said.
He said further complications would likely ensue if numerous airports are run by different and competing ownership.
“With one single owner, numerous airports can be justified by their owners through profitability indicators,” Mr. Villarete said.
Major infrastructure development needed
For Rene S. Santiago, former president of the Transportation Science Society of the Philippines, redistribution of flights to the three airports may not happen anytime soon.
It would be better for airline companies to decide on flight allocation or distribution than leaving it to the government, Mr. Santiago said, further noting, however, that airlines will not decide on their own unless forced.
INFRASTRUCTURE NEEDEDFor now, separation between domestic and international flights will not be feasible amid the absence of an expressway or rail links connecting the airports.
Mr. Santiago said separating domestic and international flights would become a major problem due to inter-line transfers.
But he did not entirely disregard the idea, suggesting that it could be possible for Clark International Airport and NAIA once the North–South Commuter Railway is completed and operational by 2029.
Mr. Danao said developing the right infrastructure is very important as it can boost tourism anywhere in the Philippines.
“From my perspective as a business advisor, we need to develop the countryside, too. Because these expected massive capacities cannot be accommodated all within Metro Manila and Luzon. When you have that kind of big capacity, you can accommodate more airlines,” he said.
However, a national agency overseeing airports will be needed to ensure service and operational efficiency, Mr. Villarete said.
Mr. Villarete said the Civil Aviation Authority of the Philippines (CAAP) should exercise its default function amid the absence of a “national airport agency.”
“I have long proposed the establishment of a national oversight agency for airports to rationalize their size and locations, but we don’t have one till now. CAAP had to take that role in the meantime,” he said.
Transportation Undersecretary for Aviation and Airports Roberto C.O. Lim said that the Department of Transportation (DoTr) is considering either creating an independent agency or forming a joint venture with government corporations under a public-private partnership (PPP) scheme to privately manage and operate the Philippines’ air traffic management system.
The DoTr wants CAAP to focus solely on being a regulator, Mr. Lim said, adding that currently, CAAP is responsible for both operating airports and managing air traffic control.
Ricardo P. Isla, chief executive officer of AirAsia Philippines, said the low-cost carrier is optimistic about the operations of NAIA under its new private operator, noting that the company is actively coordinating with NNIC.
“With all the new airport developments, you already see the NAIA and all the construction that is happening. There will be Bulacan, there is Sangley, and all the public-private partnership airport developments across the country. We can dream bigger,” Cebu Pacific Chief Marketing and Customer Experience Officer Candice A. Iyog said.
Cebu Pacific also plans to further expand its Manila hub, while also strengthening its hubs in Cebu and Clark and opening new bases in Davao and Iloilo.
“The potential economic impact of these airport developments will be massive. We are opening and expanding our capacities in tourism, bringing more jobs for Filipinos and more opportunities for us to develop our products to cater to them,” PwC Philippines’ Mr. Danao said.