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Tuesday, December 16, 2014

AviTrader Daily Aviation News Alert

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Emirates reject Delta’s apology regarding Anderson’s 9/11 comments

February 20, 2015 · 556 Views

The bitter dispute between US- and Gulf-based airlines has reached a new level after Emirates flatly rejected an open apology made concerning what was seen as incredibly tactless and insensitive remarks made by Delta’s Chief Executive, Richard Anderson. The unfortunate incident relates back to comments made by a group of American airlines that a number of the larger Gulf carriers had benefited from state subsidies amounting to a figure in excess of US$40bn. As a consequence the American airlines either wanted to renegotiate or scrap the current Open Skies agreement.
Offended by such claims, the Gulf carriers retaliated by questioning whether or not US airlines had received government subsidies totaling US$5bn in the wake of 9/11. Unfortunately Delta’s Anderson, responding to this claim on CNN, said: “It’s a great irony to have the United Arab Emirates from the Arabian Peninsula talk about that, given the fact that our industry was really shocked by the terrorism of 9/11, which came from terrorists from the Arabian Peninsula.” While the UAE and Qatar, two of the States’ allies who have offered either military or logistical support for international operations were particularly upset by these comments, Delta simply made it clear that Anderson had been responding to claims regarding post 9/11 subsidies. “He didn’t mean to suggest the Gulf carriers or their governments are linked to the 9/11 terrorists. We apologize if anyone was offended.”
Unfortunately the largest of the three main Gulf carriers did not see this as acceptable. “We believe that the statements made this week by Mr. Anderson were deliberately crafted and delivered for specific effect,” it confirmed in a statement. However US airlines continue to complain that they have lost significant numbers of bookings since 2008 as a result of Gulf competition and cited documents they indicate demonstrate aid which has allowed their competitors to offer cheap fares. In retaliation, Gulf officials say that most US carriers do not fly the same routes and are losing business only because they offer an inferior service.
This is not a dissimilar situation to the one between Gulf airlines and European carriers, including Lufthansa, and coincidentally has come at the same time as US airlines are trying to have US Exlm Bank closed down. They believe Gulf carriers are benefitting to a greater degree from the export credit agency. The tit-for-tat dialog continues with Western airlines showing concern for the safety of thousands of service industry jobs, a complaint to which Gulf carriers have responded by making it very clear they support at least as many jobs in the aerospace sector with their huge orders for aircraft.


Snecma and HAL to create joint venture and build a new production facility in India

February 20, 2015 · 655 Views

Snecma (Safran), a leading manufacturer of aircraft engines, and Hindustan Aeronautics  (HAL), a leading aerospace manufacturer, signed a Memorandum of Understanding (MoU) on January 28th, 2015 in Bangalore to explore establishing a joint venture in India for the production of aero-engine parts.  The proposed joint venture will initially focus on the manufacture of high-tech parts for the Dassault Rafale’s Snecma M88 engine, then subsequently contribute to other major aerospace projects of HAL & Snecma, in India and worldwide. Spanning over 30,000 m², the proposed joint venture’s new plant is expected to benefit from substantial investment by the two partners, providing it with state-of-the-art machinery and equipment. This agreement marks a major step forward in the long-standing collaboration between Snecma and HAL. The proposed joint venture will further broaden the scope of the excellent relations established over the past 60 years between Safran affiliates and the Indian aerospace industry. For example, Snecma manufactures the M53 engines powering the Mirage 2000H “Vajra” fighters operated by the Indian Air Force.


Design flaws led to 787 battery fire

December 2, 2014 · 197 Views

On the 7th January 2013 a fire was reported on board a Boeing 787 Dreamliner while parked at Boston’s airport in the USA. The fire was put down to a problem with one of the plane’s lithium-ion batteries. A week later an All Nippon Airways 787 Dreamliner had to make an emergency landing after smoke was discovered inside the plane which was subsequently traced back to another lithium-ion battery. As a consequence of this incident, all 787 Dreamliners were grounded until April of that year until further acceptable testing and improvements were carried out to the battery system on board the plane. The battery itself was manufactured by GS Yuasa and comprised eight individual cells making up a combined weight of 63lbs.
Nearly two years later and the results of the investigation into the first incident have concluded that the lithium-ion battery installed in the plane should not have received certification by the FAA. The National Transport Safety Board (NTSB) were also critical of Boeing who they believed had erroneously ruled out the chances of thermal runaway in its assessment of the battery’s safety. Boeing’s battery tests to obtain original certification included crushing battery cells, driving nails through them and deliberately introducing short circuits to cause failure. Boeing found “nothing adverse happened” while these tests were carried out, and so deemed the battery’s box and internal protection to be of an acceptable standard. Boeing stated that it had followed the certification process set out by the FAA. It would seem that while the cause of the fire has been clearly identified, responsibility for its occurrence has not been accepted in full by anyone.


Rolls-Royce forced to axe 2,600 jobs after second profit warning this year

November 5, 2014 · 164 Views

Back in February this year, Rolls-Royce, the FTSE-100 engine maker, lost over £3bn of its value after shocking the market with its first profits warning in a decade. To announce a second one this October has created considerable concern and Rolls-Royce has decided that over the next 18 months they need to reduce costs by up to £80m a year by axing 2,600 jobs, the majority of which will be in the aerospace sector in Britain and the United States. The focus is on Rolls-Royce’s key Trent engines as they move from the development to the production phase, which consequently requires fewer engineers.
Back in February John Rishton, Rolls-Royce group’s Chief Executive, had admitted that the future was “bumpier than I had expected”, while blaming the current problems on deteriorating economic conditions and a tit-for-tat trade war between the EU and Russia over the Ukrainian crisis which had affected its nuclear and energy business as well as its power-systems unit. This week Rishton has had to admit that “We are taking determined management action and accelerating our progress on cost. The measures announced today will not be the last; however they will contribute towards Rolls-Royce becoming a stronger and more profitable company.”
Another consequence of the situation is the unexpected departure of Finance Director, Mark Morris, leaving the company after 27 year without any explanation. He will be replaced by David Smith, who is being promoted from Finance Director of the Rolls-Royce Aerospace division. This second profit warning saw share value fall 11% to 832p, wiping a further £2bn off the company’s value. However, news of the redundancies was well received by investors and the share price rallied by 2%, currently standing at 832p. This is clear confirmation of comments made by Espirito Santo’s analyst, Ed Stacey, who indicated that investors would be expecting a clear message from the new Finance Director and tight control on all finances.


Air France-KLM selects GEnx engines for Boeing 787 fleet

March 25, 2014 · 113 Views

Air France-KLM selected the GEnx-1B engine to power its 25 Boeing 787 Dreamliners and 12 leased 787 aircraft. The total engine order is valued at more than $1.7bn. Air France-KLM and GE Aviation have also signed an agreement that will allow Air France-KLM to offer maintenance, repair and overhaul (MRO) services for the GEnx-1B engine. Under this agreement, Air France-KLM will be licensed to perform maintenance and overhaul work on the GEnx-1B engine and GE will provide technical support and assistance on overhaul workscoping and component repair licenses, comprehensive material support and training.


ILFC closes $1.5bn senior secured term loan

March 7, 2014 · 80 Views

International Lease Finance Corporation (ILFC) has closed a new senior secured term loan of $1.5 billion. The loan will bear interest at LIBOR plus 275 basis points with a 0.75% LIBOR floor, is priced at 99.5% of par value, and will mature in 2021. The collateral used to support the transaction has an initial weighted average age of 9.1 years. It will be secured primarily by a first priority-perfected lien on the equity of certain of ILFC’s subsidiaries, which directly or indirectly own a pool of aircraft and related leases. ILFC plans to use the proceeds for general corporate purposes, including purchasing aircraft and supporting the company’s liquidity cushion.


Airbus Commercial reports another year of financial improvement

February 26, 2014 · 80 Views

In 2013, Airbus achieved a new industry record of 1,619 gross commercial orders (FY 2012: 914 gross orders) with net orders of 1,503 aircraft (FY 2012: 833 net orders), excluding ATR. Gross orders comprised 1,253 A320 Family aircraft, 77 A330s, 239 A350 XWBs and 50 A380s. Fourth-quarter orders included Emirates Airline’s agreement for 50 A380s and Etihad Airways’ order for 50 A350 XWBs, 36 A320neos and one A330-200F. Airbus Military (now part of Airbus Defence and Space) received 17 net orders (FY 2012: 32 net orders). Airbus’ net order intake increased sharply to €202.3bn (FY 2012: €88.9bn). At the end of 2013, Airbus’ consolidated order book was valued at €647.4bn (year-end 2012: €525.5bn). The Airbus Commercial backlog was worth €627.1bn (year-end 2012: €505.3bn), comprising 5,559 Airbus aircraft (year-end 2012: 4,682 units) and representing over eight years of production. Airbus Military’s order book was worth €20.8bn (year-end 2012: €21.1bn). Airbus series aircraft deliveries increased to 626 aircraft (FY 2012: 588 aircraft, including three A330s without revenue recognition). Airbus Military delivered 31 aircraft (FY 2012: 29 aircraft). Airbus’ consolidated revenues increased seven percent to €42,012m (FY 2012: €39,273m), reflecting higher commercial and military aircraft deliveries. The Division’s consolidated EBIT rose to €1,710m (FY 2012: €1,252m). Airbus Commercial’s revenues rose to €39,889m (FY 2012: €37,624m). The Airbus Commercial reported EBIT was €1,595m (FY 2012: €1,147m) with the EBIT before one-off at €2,216m (FY 2012: €1,669m). Airbus Commercial’s EBIT before one-off benefitted from the improved operational performance, including favourable volume, some better pricing and an improvement in A380 losses. It also included higher A350 XWB programme support costs. Revenues at Airbus Military rose to €2,893m (FY 2012: €2,131m), driven by the A400M ramp-up and higher volumes from both light and medium transport planes and tankers. The EBIT at Airbus Military was €166m (FY 2012: €93m).


Boeing Commercial Airplanes reports full year revenue of $53bn

January 29, 2014 · 76 Views

Boeing Commercial Airplanes fourth-quarter revenue increased to $14.7bn and full-year revenue increased to a record $53bn on higher delivery volume. Fourth-quarter operating margin improved to 10.3% and full-year operating margin grew to 10.9% on the higher volume, favorable delivery mix and continued strong operating performance. During the quarter, the company launched the 777X with 259 orders and commitments. During the year, the 787 program completed first flight of the 787-9, successfully launched the 787-10 and began operating at a 10 per month production rate in final assembly. The 737 program delivered at a record production rate of 38 per month and has won nearly 1,800 firm orders for the 737 MAX since launch. In 2013, a record 648 commercial aircraft were delivered. In January 2014, the company reached an eight-year contract extension through 2024 with the International Association of Machinists & Aerospace Workers District 751 (IAM). Commercial Airplanes booked 465 net orders during the quarter and 1,355 during the year. Backlog remains strong with 5,080 airplanes valued at a record $374 billion.


A350 XWB in Bolivia for high altitude testing

January 9, 2014 · 67 Views

The A350 XWB development aircraft, MSN3, is in Bolivia where it will perform a series of tests at the high altitude airfields of Cochabamba and La Paz. Cochabamba is around 8,300 feet above sea level, and La Paz is one of the world’s highest airports at 13,300 feet. Operations at such high altitude airfields are particularly demanding on aircraft engines, Auxiliary Power Unit (APU) and systems. The aim of these trials is to demonstrate and validate the full functionality of engines, systems, materials as well as to assess the overall aircraft behaviour under these extreme conditions. A number of take-offs with all engines operating and with simulated engine failures are being performed at each of the airfields to collect data on engine operating characteristics and validate the aircraft take-off performance. The autopilot behaviour will also be evaluated during automatic landings and go-arounds. Since the A350 XWB’s first flight with MSN1 on June 14th 2013, over 800 flight test hours have been performed in close to 200 test flights by both MSN1 and MSN3. In total the A350 XWB flight test campaign will accumulate around 2,500 flight hours with the fleet of five aircraft. The rigorous flight testing will lead to the certification of the A350-900 by the European EASA and US FAA airworthiness authorities, prior to entry into service in Q4 2014.


Firefly welcomes first ATR 72-600

July 5, 2013 · 66 Views

Firefly, Malaysia Airlines’ subsidiary carrier has taken ownership of its first brand-new ATR 72-600. The aircraft is the first of 20 latest generation firm ATRs, plus 16 options, ordered by Malaysia Airlines in December 2012. Firefly currently operates 12 ATR 72-500s, and with the arrival of the new ATR 72-600s will almost triple its exclusively ATR 72 aircraft fleet, taking the total to over 30 aircraft.


GE’s Passport engine begins first full engine test

June 26, 2013 · 42 Views

Certification testing is underway on the first Passport development engine at GE Aviation’s Peebles Testing Operation in Ohio. The engine began ground testing on June 24th and ran for more than three hours, reaching more than 18,000 lbs. of standard day sea-level takeoff thrust. Eight Passport engines and one core will be involved in the engine certification program. Flight testing on GE’s flying testbed is scheduled for 2014. Engine certification is expected in 2015. The Passport engine certification program follows three years of validation testing. GE Aviation has conducted validation tests on the fan blisk design, including two fan blade-out rig tests, ingestion tests and a fan aero rig test to demonstrate fan efficiency. Testing is complete on the third eCore demonstrator, and GE has accumulated more than 300 hours of testing on eCore demonstrators to date.


Rolls-Royce wins order from CIT to power 23 aircraft

May 22, 2013 · 55 Views

Rolls-Royce has won an order from US leasing company CIT Aerospace for Trent XWB engines, to power ten Airbus A350 XWB aircraft and Trent 700 engines to power 13 Airbus A330 aircraft. The Trent XWB engines will power ten CIT A350 aircraft that were announced in January 2013 which were in addition to five A350 XWB aircraft already on order. The Trent XWB, specifically designed for the Airbus A350, is the fastest selling Trent engine ever, with more than 1,200 already sold. The engine variant that will power the A350-800 and -900 was awarded European Aviation Safety Agency (EASA) type certification in February. The engine will power the first flight of the Airbus A350 XWB this year and the aircraft’s first in-service flight in 2014.


Canada Jetlines and Boeing sign purchase agreement for up to twenty one 737 MAX aircraft

December 15, 2014 · 85 Views

Canada Jetlines (Jetlines) signed a definitive purchase agreement with Boeing to acquire up to twenty-one Boeing 737 MAX aircraft for delivery commencing in 2021. The Agreement includes five firm orders, purchase rights for an additional sixteen 737 MAX and some conversion rights to the 737-8 MAX aircraft. “This Agreement with Boeing is a major milestone for Jetlines,” said Jim Scott , CEO of Jetlines. “We are thrilled to be partnering with Boeing. The Agreement provides Jetlines access to leading edge aircraft technology in the future.”


Rockwell Collins awarded US$420m ARC-210 radio contract

December 15, 2014 · 911 Views

Rockwell Collins has received a US$420m, four-year contract from the Naval Air Systems Command (NAVAIR) for continued deliveries of the ARC-210 advanced airborne software defined radio (SDR) system. Installed on more than 180 different aircraft platforms in 45 countries, the ARC-210 is considered the world’s standard for airborne radios. This contract will ensure that U.S. and international military aircraft will continue to be fitted with this highly capable and reliable radio. The ARC-210 SDR provides Joint Precision Approach and Landing System (JPALS) UHF data link, SATCOM Integrated Waveform and Combat Net Radio capabilities and is certified with Tactical Secure Voice 2, making it the only modernized, qualified airborne software defined radio with such capability.


WestJet selects Global Eagle Entertainment’s Content Services for launch of new wireless Inflight Entertainment System

December 15, 2014 · 103 Views

Global Eagle Entertainment, a worldwide leading provider of content, connectivity and digital media solutions to airlines, has been selected by WestJet to manage its inflight content services. WestJet is currently overhauling its existing inflight entertainment (IFE) system and replacing it with a wireless IFE solution. Global Eagle Entertainment (GEE) will provide a broad array of content that can be accessed by passengers using their personal electronic devices or tablets rented from the airline. Through this long-term agreement, GEE will provide a selection of current movies and television, including a wide catalog of engaging and entertaining programs, beginning in the first quarter of 2015.


Change in Finnair’s shareholders’ nomination board

December 15, 2014 · 534 Views

Per Wennberg, nominated to Finnair’s Shareholders’ Nomination Board by Skagen funds, has decided to resign the Board following the decision of Skagen funds to sell their shareholding in Finnair. Skagen funds was one of the three largest shareholders of Finnair. According to the rules of the Shareholders’ Nomination Board, the shareholder eligible to appoint the succeeding member to Mr. Wennberg, is the fourth largest shareholder of Finnair Plc as of the first weekday in September 2014 based on the registered holdings in Finnair’s shareholder register. The fourth largest shareholder was Ilmarinen, who has nominated Managing Director Harri Sailas to the Shareholders’ Nomination Board. The other members of the Board are Eero Heliövaara, Director General of the Government Ownership Steering Department, Prime Minister’s Office (Chairman); Robin Backman, Portfolio Manager, KEVA; and Klaus Heinemann, Chairman of Finnair’s Board of Directors.


Norwegian submits formal complaint about differential treatment to the EU and ESA

December 15, 2014 · 103 Views

Norwegian wants equal conditions of competition in the Scandinavian aviation market and has therefore submitted a formal complaint regarding unlawful differential treatment in favour of SAS to the European Commission and ESA (EFTA Surveillance Authority). Discriminatory conditions and liscencing practises prevent Norwegian from obtaining access to traffic rights on the same terms as SAS; in addition the differential treatment generates significant additional costs for SAS’ competitors in Scandinavia. The authorities argue that the differential treatment is justified by “grandfathered rights” due to historic explanations mainly because of the fact that its majority owners are the governments of Norway, Sweden and Denmark. Norwegian has for the past five years on numerous occasions applied for and requested equal treatment and conditions to no avail. Every time, the rejections by the Scandinavian national aviation authorities have been justified by SAS’ historically defined conditions and that its majority owners are the governments of Norway, Sweden and Denmark. The issue at hand revolves around a joint Air Operator Certificate (AOC) that SAS benefits from and that Norwegian is denied access to on equal terms. Norwegian has not until now filed a formal complaint to European authorities, hoping and trusting that Scandinavian aviation authorities would create an equal set of rules for all the companies operating in the same market. The European Aviation Safety Agency (EASA) has also criticized the special treatment and concluded that the preferential treatment is in breach of European law. Still it has prevailed. A major competitive disadvantage for Norwegian compared to SAS is its limited access to traffic rights – or the ability to open new routes. The joint Scandinavian AOC, which only SAS benefits from, gives access to traffic rights both within the EU and EFTA (Norway), an advantage not available to Norwegian as Norway is not a part of the EU. If Norwegian had the same traffic rights, it would be able to operate, for instance, flights between Helsinki and Dubai, London and Tel Aviv and Barcelona and Tel Aviv. Norwegian recently applied to the authorities to get access to these routes, but was denied because the airline does not hold an EU AOC.


AirAsia X places firm order for 55 A330neo

December 15, 2014 · 117 Views

AirAsia X, the long haul affiliate of Asia’s largest low cost airline, has placed a firm order with Airbus for 55 A330neo aircraft. This is the largest single order to date for the best-selling A330 Family and reaffirms AirAsia X’s position as the biggest A330 airline customer worldwide, having now ordered a total of 91 aircraft. The announcement covers the firming up of a Memorandum of Understanding (MOU) for 50 A330neo signed during the Farnborough Air Show in July 2014, plus an additional five aircraft. Deliveries of the newly-ordered aircraft will begin in 2018. Rolls-Royce has been selected by AirAsia X to power 10 Airbus A330ceo and 55 Airbus A330neo aircraft with engines and long-term TotalCare support worth US$6.2bn.


HAITEC VIP Maintenance receives LBA approval

December 15, 2014 · 441 Views

HAITEC Aircraft Maintenance GmbH was recently granted its Maintenance Organization Approval from Germany’s Civil Aviation Authority (Luftfahrt-Bundesamt LBA) for its VIP Maintenance Division. VIP Maintenance commenced operations on November 20th, 2014, in its 4,300 m² hangar dedicated to VIP customers at the Airport Erfurt-Weimar, welcoming the first Gulfstream G550 owned by Silk Way Airlines, based in Baku, Azerbaijan. Currently, HAITEC VIP Maintenance, an EASA-Part 145 organization, has approvals for Gulfstream G550 and the Airbus 320 family and, besides Standard Line and Base Maintenance, will concentrate on cabin refurbishment and interior design applications. “Since 2008, HAITEC has been providing Line and Base Maintenance for almost all types of Boeing and Airbus aircraft, as well as the MD-11 and Gulfstream GV-SP. We have approvals from Russia, Qatar, the United Arab Emirates (UAE), Bermuda and Azerbaijan and are in preparation for obtaining further approvals. Concurrently, our workforce planning is in full swing as we want to grow our VIP team in Erfurt to about 100 professionals by the end of 2017,” says Michael Bock, CEO of HAITEC Aircraft Maintenance GmbH. The new VIP facilities in Erfurt are part of a grand investment of €30m to significantly increase HAITEC’S competitiveness and aircraft maintenance capacities over the course of the next three years.


United increases service to China this Summer

December 15, 2014 · 129 Views

United Airlines will operate additional flights to Shanghai and Chengdu, China, from the airline’s premier trans-Pacific gateway hub in San Francisco during the peak summer travel season. The current daily service between San Francisco and Shanghai will increase to two flights daily from May 6th to Oct. 24th, 2015, and the three-times-weekly service between San Francisco and Chengdu will increase to daily service from June 4th to Sept. 1st, 2015, both routes subject to government approval. United will operate the flights with Boeing 777-200 aircraft featuring a total of 269 seats. The new summer-season service will operate in addition to United’s current daily year-round flights between San Francisco and Shanghai.


Retired chairman and CEO of Alaska Air Group, joins Honeywell’s Board Of Directors

December 15, 2014 · 624 Views

William S. Ayer, former chairman and chief executive officer of Alaska Airlines and Alaska Air Group has been elected to its Board of Directors. He will serve on Honeywell’s Corporate Governance and Responsibility and Management Development and Compensation Committees. Ayer was appointed CEO of Alaska Air Group in 2002 and became Chairman of the Board in 2003. He retired from the company at the end of 2013. Alaska Air Group, through its subsidiaries, provides passengers and cargo air transportation services in the United States.


Boeing selects GE Aviation for 777X common core avionics systems

December 15, 2014 · 510 Views

GE Aviation has been selected by The Boeing Company to provide the Common Core System (CCS) and the Enhanced Airborne Flight Recorder (EAFR) for the Boeing 777X aircraft. Selecting the GE common core system and enhanced airborne flight recorder enables Boeing to bring the latest generation of proven capabilities from the 787 to the 777X. The 777X has 300 orders and commitments from customers Lufthansa, Etihad, Qatar, Emirates, ANA and Cathay Pacific. The latest systems technology for the 777X will touch two major GE Aviation facilities including the common core system and the enhanced airborne flight recorder from Grand Rapids, Michigan and the remote data concentrators from Cheltenham, United Kingdom. The CCS is often referred to as the “central nervous system and brain” of the airplane and hosts the aircraft’s avionics and utilities functions, eliminating several boxes and reducing hundreds of pounds of wire. GE’s CCS on both the 787 and 777X share common components and technologies and can be scaled up or down depending on customer needs. The CCS open system architecture significantly reduces the cost of modifying software so that the developer may only be required to test and certify functions that have been altered.


New landing gear cooperation between Lufthansa Technik and SPPCA

December 15, 2014 · 512 Views

SPP Canada Aircraft (SPPCA), a global provider of landing gear systems for commercial aircraft, has formed a business alliance for Product Support Services with Lufthansa Technik AG and Hawker Pacific Aerospace. Lufthansa Technik and its subsidiary Hawker Pacific Aerospace are two of the world’s leading providers of landing gear maintenance and technical support services. All three parties have consolidated their partnership in a General Terms Agreement, after signing a Memorandum of Understanding in 2013. The agreement will allow customers to benefit from SPPCA’s design and manufacturing know-how and Lufthansa Technik’s MRO expertise as they provide aftermarket support services to SPPCA’s landing gear components. “We look forward to providing excellent MRO solutions for SPPCA’s landing gears and to supporting SPPCA with the quality, value and commitment to service that are critical to their success in this competitive market,” says Andreas Tielmann, Vice President Aircraft Systems at Lufthansa Technik AG.


Six airports in Philippines being opened up for public-private partnership

December 15, 2014 · 155 Views

Less than a month after Mayanmar announced a 30-year public-private partnership for the country’s second largest airport at Mandalay, on Dec. 15th it has been announced that the Philippines will be looking to do the same with six of their own airport projects by putting them up for tender next year. This would appear to be continued proof of the continued increase in air traffic in Asia and the demands for improved infrastructures throughout the region. The value of these tenders is anticipated to be in the region of PHP116 billion pesos (US$2.6bn). Again similar to the Myanmar process, prospective investors are being invited by the Department of Trade and Communications (DOTC) to pre-qualify for the right to bid on the projects themselves.
The six airports are at key tourist and commercial destinations in both the centre and southern regions of the Philippines. As the DOTC reports: “The fact that the traffic at these airports has either exceeded their current design capacities or is nearing the design capacity levels, coupled with the anticipated influx of growing number of domestic and international passengers in years to come, make the fast and proactive development of these airports crucial”. The aim of this program is to increase the number of foreign tourists to the Philippines from 6 million to 10 million by 2016.
Those up for tender for concession contracts to operate and expand are Davao Airport, Iloilo Airport Bacolod-Silay Airport and Laguindingan Airport, the four for a total of just under PHP110bn pesos and which, according to the DOTC, last year catered for 7.7 million passengers between them. The existing airports of Bohol and Puerto Princesa which dealt with 2.1 million passengers last year will be handed over to the private sector when construction has been completed. The new Bohol Airport will have cost PHP4.6bn pesos, while the Puerto Princesa Airport construction will have come in at PHP20.3bn pesos and operations and maintenance will fall into the hands of the private sector once building is complete. The DOTC indicated that packages of two or more airports would be offered to increase attraction to investment, while it is believed interest has already been shown by JG Summit Holdings, San Miguel, Megawide Construction and Aboitiz Equity Ventures.