Civilize the airports!

Airports are more than just terminals for jetliners. Airports present to visitors the first impression of the city and the country where it is located. Lousy airports negate all the money and effort we put into attracting tourists and investors. Airports like ours tell the world the worst about the country and our people.

That is probably why the airports in our neighboring ASEAN countries are spectacular. Bangkok, Kuala Lumpur and, lately, Vietnam seem to all be competing with Singapore in the quality of design, efficiency and overall operations.

On the other hand, we don’t seem to care. The roofs leak, the toilets smell, ceilings collapse, tanim bala extortion by airport security and an Australian visitor fell through a sinkhole in the floor of Terminal 2 as he exited the immigration area some months ago. Air conditioning works now and then, and the NAIA terminals suffered total power blackout for hours due to maintenance failure.

The lack of competence of the NAIA GM can be seen in his farewell address to his staff as he blamed media for his problems:

“…The succeeding months proved to be non-significant, but not to the media. The broken glass panels, a 2×2 meter slab falling, the low water pressure and the wrong spelling of the signages (sic) were highlighted for lack of something big.”

As for the five-hour power outage that hit NAIA Terminal 3 earlier this year, Honrado said it was a “blessing in disguise.” He explained: “We became more aware of the importance of maintenance.” Duh!

We all know it need not be like this. So, why can’t we have civilized airport terminals?

But we can. Take a look at what is going on in Mactan Cebu that is now managed by a private group. And yes, we can’t have a civilized airport in Manila because incompetent government officials insist on running it.

The outgoing Aquino administration has actually finalized details of a plan, that was subsequently approved by P-Noy himself, that will result in having a private company rehabilitate and eventually run NAIA. The approval, unfortunately,  is now over a year old and ignored.

DOTC was also supposed to bid out the operations and maintenance of five domestic terminals, but cancelled the bidding at the last minute. They are waiting for legal opinions daw from other government lawyers, as if DOTC didn’t have a platoon of lawyers in-house.

I just attended an economic briefing in Cebu over the weekend and noticed the old Mactan Cebu airport terminal has better service and is better looking. The airport’s management had been privatized for almost a couple of years now.

They are still building the new terminal, but the private management already showed how a professional view of passenger traffic flow through the old building can make a whale of a difference. They also took pains to make sure there is order in the taxi queue.

More than that, Megawide and its Indian partners GMR have made extra effort to market the airport abroad. They have been convincing airlines to fly directly to and from Mactan. They are also working with tour agencies in Japan, Korea and elsewhere to bring tour groups to Cebu.

They organized a commercial team to carry out detailed analysis on travel flows, economic drivers for travel, yields on the routes, yields on competitors’ routes, factors driving demand to Cebu and the region and many other parameters. They then packaged these into compelling business cases supported by the airline incentive program for landing charges which ultimately produced favorable results.

The passenger traffic in 2014 was 6.9 million a year (1.69 million International, 5.9 domestic). The traffic increased to 8 million in 2015. Megawide expects traffic to reach 8.9 million in 2016.

What I like best about the Mactan Cebu airport is that people from VisMin don’t have to go to Manila to catch international flights and suffer the incompetence of NAIA management. OFWs can go directly to the countries where they work instead of spending more time and money in Manila.

Making Mactan Cebu useful for OFWs wasn’t simple, nor was it easy. Megawide had to exert a lot of effort to convince government bureaucrats in Manila to assign people to process the papers of OFWs departing from Mactan Cebu.

The introduction of more international flights can be attributed to the efforts of Megawide to make this happen. Here is a short list of new international flights from Mactan Cebu:

• Osaka (PAL) (new route) (seven flights a week)

• Nagoya (PAL) (new route) (four flights a week)

• Narita (PAL and Cebu Pacific) (seven  flights and four flights a week)

• Los Angeles (PAL) (new route) (three flights a week)

• Dubai (Emirates) (new route) (seven flights a week)

• Xiamen (Xiamen Airlines) (new route) (three flights a week)

• Taipei (Cebu Pacific and EVA Air) (new route) (four and sevenflights a week)

•  Pusan by Jin Air (seven flights a week)

Cathay Pacific and Silk Air increased frequencies in their existing routes.

 There is also a new domestic flight from Cebu to El Nido by Ayala-owned Air Swift. Philippine Airlines re-established its secondary hub in Cebu with six additional domestic routes from April 2015 onwards (Davao, Cagayan de Oro, Butuan, Bacolod, Iloilo, Tacloban).

PAL also established a transfer facility in Cebu so that passengers can now easily connect domestic to domestic with minimum 60 minutes connecting time and domestic – international / International – domestic with minimum 90 minutes connecting time. Travelers from Visayas and Mindanao can transfer through Cebu without having to pass by Manila.  

The Megawide consortium is hopeful that with increased airport capacity delivered through the new Terminal 2, they will be able to produce growth in currently served as well as unserved markets from Cebu. When I last talked to PAL president Jimmy Bautista, he was very optimistic about the future of Mactan Cebu as an international hub.

 The new terminal is expected to be commissioned in June 2018, that’s 36 months after groundbreaking (which was held June 29, 2015). The delay in construction start was the fault of DOTC which failed to timely inform the Philippine Air Force to vacate the land needed to build the new terminal.

Then it took some time for DOTC to bid out the construction of the replacement building for the Air Force. Indeed, the groundbreaking date was mostly ceremonial, just so they could say it was P-Noy who started the project construction.

 PPP is ideal for building and running airports. There is still so much money in private hands waiting to fund viable projects. The BSP even has to pay interest to sterilize these funds to help the BSP meet its inflation target.

 On the other hand, government funds have so many other urgent uses. It has to invest more on human capital through education, health services and in improving food security and upgrade farmer incomes to fight poverty.

 ODA funded projects, on the other hand, benefit the companies of donor countries rather than our own. While offering concessional interest rates, the costs of ODA projects are not subjected to rigorous international bidding rules. The cost of corruption could be hidden in the project cost. In the Palawan Airport, only Korean companies were allowed to bid. Our local construction companies are more than capable to build our airports.

 I am glad to note incoming Transport Secretary Art Tugade is inclined to have a more vigorous partnership with the private sector in developing airports and other infrastructure. In so doing, Art also recognizes technical limitations of the DOTC staff in implementing projects.

Public Private Partnership is also the most logical way of delivering long needed infrastructure as quickly as possible. We have to civilize our airports so as not to demean the Filipino. I hope president-elect Duterte will see to it that this happens.

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