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report 2011

Clark International Airport report for 2011

Despite another challenging year for the global aviation industry, Clark International Airport (IATA code: CRK) continued to post encouraging operational statistics for the 3rd consecutive year. Driven by additional flights and new routes, international passenger volume recorded a year-on-year increase of 19%, which is significantly higher than the 6.4% increase in global passenger volume. Consequently, gross income increased by 10%, from Php 311M in 2010 to Php 343M. A momentous development was also witnessed this year, with two airlines making the decision to start operations at CRK in 2012. AirAsia Philippines (AAP),

the Philippine affiliate of one of the world’s leading budget airlines – AirAsia Berhad, committed to station 13 aircraft at CRK within the next 5 years. AirPhil Express, the low cost subsidiary of national flag carrier Philippine Airlines (PAL) is also scheduled to start operations in the first half of 2012. In addition, Clark is well on track in its vision to become a competitive logistics hub in the Asia Pacific Region. SIA Engineering (Philippines) Corporation, the state-of-the-art maintenance, repair and overhaul (MRO) facility located in Clark has announced its plans to construct two wide-body hangars that can accommodate twin-aisle aircraft such as B747 and B777.

Moreover, Metrojet Engineering, the leading business jet operator in Asia, has signed a Memorandum of Agreement with CIAC to develop a 3-hectare MRO facility. However, the airport industry has significantly evolved in recent years that successful airport management entails careful planning and responsive operations. Acknowledging the greater role that it will play in the future of the Philippine aviation industry, CIAC has been investing significant time and effort in planning our forward-thinking strategies.

Thus, the approval of the Revised Land Use Plan of the Clark Civil Aviation Complex and implementation of a new organizational structure are notable accomplishments that give evidence of our strong commitment in the achievement of our long-term plans and vision. Along with efforts to strengthen its organizational capabilities, various infrastructure projects are also planned for development from 2012-2016. Among these is the construction of a new passenger terminal building, envisioned to provide a unique, atypical airport experience, providing services beyond that of a traditional airport terminal.

However, building a new terminal facility is only one way through which CIAC aims to develop CRK and the Clark Civil Aviation Complex (CCAC). As airports around the world advance to become new drivers of economic activity, our ultimate goal in CIAC is to develop the CCAC into a world-class aerotropolis, geared toward providing greater economic opportunity for the region and the whole country. In line with this, the development of the Global Gateway Logistics City, a 177-hectare master planned mixed use area is a significant step toward this vision. Divided into four major zones – Business Park, Logistics Park, Aero Park and a Town Center, GGLC aims to develop a modern and fully-integrated work environment that shall provide the workforce with a high quality of life.

This vision will only be realized by building even stronger relationships with our stakeholders, whose support and confidence in CIAC has been instrumental in our continued success. In closing, I would like to extend my gratitude to all our stakeholders – government agencies, private entities, airlines, area locators, the media and the general public – for their unwavering trust and confidence. Most importantly, I acknowledge all our employees, whose hard work and dedicated efforts pushed both CIAC and CRK to another record year. As we look ahead to 2012, we hope to continue serving the people as we build on our strengths and create sustainable growth for the region and the Philippine economy.

FOR 2011, CIAC posted a significant increase of 19 percent in international passenger volume, with a total of 725,023 passengers compared to 607,704 passengers in 2010. This increase is largely attributed to the additional flights and routes of Seair and Jin Air. In the first quarter of 2011, Seair started flying to Hongkong, Macau and Bangkok, in addition to its existing flights to Singapore in 2010. On the other hand, Jin Air increased flights to Incheon, South Korea from 1 flight per week in 2010 to 4 flights per week in 2011. The 19% increase is a noteworthy accomplishment for CIAC, as it is higher than the global international passenger increase of 6.4%, as reported by Airports Council International. The growth in passenger volume likewise contributed to the 21 percent increase in the passenger terminal fees collected. Since 2003, the Clark Airport has carried more than 3.6 million passengers and by the end of 2012, passenger count is expected to reach more than 4.5 million, as Clark Airport expects considerable growth once AirAsia Philippines and Airphil Express start operations in 2012

AIRASIA PHILS. signed on 24 March 2011 a Memorandum of Agreement (MOA) with CIAC to establish its hub operations at Clark International Airport. Philippines AirAsia is an affiliate of AirAsia Berhad, one of the world’s leading budget airlines based in Malaysia. As the fourth member of the AirAsia Group, which includes AirAsia Berhad, AirAsia Thailand and AirAsia Indonesia, AirAsia Philippines is 60 percent owned in equal partnership by Filipino entrepreneurs Marianne Hontiveros, Antonio Cojuangco Jr. and Michael Romero. The remaining 40 percent is owned by AirAsia Berhad, through its wholly-owned subsidiary AirAsia International, Inc. The first brand new A320-200 aircraft of AirAsia Philippines landed at Clark Airport on 15 August 2011. The aircraft was flown to Clark Aiport straight from the Airbus factory in Toulouse France. The delivery was marked by a simple event, which included a water cannon salute and a short media launch. By 2012, the AirAsia Philippines will have a fleet of four Airbus 320s to serve its international and domestic route plan. Based on the route plan presented on its Business Plan, AirAsia Philippines has committed to station 13 aircraft at Clark Airport within the next 5 years. AirAsia Philippines will commence its operations in the first quarter of 2012 with domestic flights to Davao, Kalibo and Puerto Princesa. International operations to Kuala Lumpur, Hong Kong, Macau and Bangkok are set to start in the second quarter of 2012.

AIRPHIL EXPRESS signed a Memorandum of Agreement (MOA) with CIAC on 11 August 2011, paving the way for the local budget carrier to operate international and domestic flights at Clark Airport. With the goal of serving the growing number of travellers based in the northern regions of the country, Airphil Express will initially offer domestic flights to Cebu, Kalibo, Davao and Puerto Princesa and initial international flights to China (Hong Kong, Beijing, Pudong, Hangzhou) and Indonesia (Bali). As the low cost subsidiary of national flag carrier Philippine Airlines (PAL) owned by business tycoon Lucio Tan, Airphil Express will utilize Airbus A320s for its initial operations at Clark. Airphil Express will offer travellers with compelling value propositions. Among them is the free 15-kilo check-in luggage allowance with the addition of a 7-kilo hand-carry baggage allowance. METROJET ENGINEERING Clark (MEC), the leading business jet operator in Asia, is set to develop a three-hectare maintenance, repair and overhaul (MRO) facility within the Clark Civil Aviation Complex (CCAC). A lease agreement was signed on 23 December 2011 for the construction and development of a hangar space and office building. This MRO facility shall service business jets and helicopters, and also provide a range of business aviation services, including avionics upgrades, interior refurbishment, aircraft exterior paintwork and storage facility of spare parts. Initial investment cost is $5 Million, while the total expected project cost is at $40 Million.

ISO 9001:2008 CERTIFICATION. On 20 December 2011, TÜV Rheinland Philippines conducted the 2nd surveillance audit on CIAC’s International Passenger Facilitation Processes, along with an expansion audit on the Internal Processes of the Accounting, Human Resource, Procurement, Property and Treasury departments. Assisted by the Quality Management System (QMS Core Group), the auditors from TÜV conducted an extensive assessment and review of the processes involved, and later announced that CIAC has successful passed its re-certification audit to ISO 9001:2008 Standards. In support of the QMS expansion project, seminarworkshops on QMS awareness, documentation, and advanced audit were facilitated by the QMS Consultant— Ms. Carmina M. Espiron. Auditors and process owners from different departments participated on the said trainings, as well as on the various QMS activities. Malacañang has recognized the sterling achievements of the CIAC with regards to passenger facilitation at Clark Airport. President Benigno “Noynoy” Aquino III awarded CIAC with a plaque in recognition of the ISO 9001:2008 standard that further improved International Passenger Facilitation Process. The presidential award came after the TÜV extended the ISO 9001:2008 certification of CIAC. A company-wide quality management system was listed in the pipeline of CIAC plans and programs for year 2012. All departments and offices looked forward to the full establishment and full implementation of QMS in CIAC. The incessant thrust of CIAC for standardized quality systems in the corporation signifies its commitment on infusing quality in its culture and on providing high level of customer satisfaction to its passengers and other clients.

The revised land useplan of the Clark Civil Aviation Complex was approved by the CIAC Board of Directors on 15 February 2011 after a careful consideration of the following: terrain, control tower location, airline lease area, fuel storage, transport and rail access, rescue and fire fighting facilities and new developments in the aviation complex. The Asia Foundation (TAF) supported by the USAID provided a grant to CIAC for the revision and updating of the land use plan for the 2,367-hectare Clark Civil Aviation Complex (CCAC). TAF hired AECOM Philippines, a global provider of professional services on infrastructure, to prepare a comprehensive land use plan for the southern and eastern land areas of the CCAC. The revised land use plan will enable CIAC to properly develop and manage the CCAC in the most efficient way. TAF also worked with CIAC management and officers in preparing a five-year business plan for the airport. The plan laid out strategies to improve airport operations, safety, security, area development and infrastructure.

CLARK INTERNATIONAL AIRPORT BILATERAL AGREEMENTS

  • Australia 4,000 seats per week + 1,300 tons per week for cargo
  • Bahrain 31 frequencies per week + 200 tons per week for cargo
  • Belgium 2 frequencies per week
  • Brunei 1 frequency per week + 1,400 tons per week for cargo
  • Cambodia 32 frequencies per week
  • Canada 7 frequencies per week
  • China 6,000 seats per week
  • Egypt 3 frequencies per week
  • Finland 7 frequencies per week
  • Germany 7 frequencies/week
  • Hong Kong 6,300 seats per week + 1,400 tons per week for cargo
  • India 7 frequencies per week
  • Indonesia 3,000 seats per week
  • Iran 7 frequencies per week + 700 tons per week for cargo
  • Japan 14 frequencies + additional 6 coefficients Clark to Osaka and/or Nagoya
  • Korea 19,000 seats per week + 400 tons per week for cargo
  • Kuwait 14 frequencies per week
  • Libya 5 frequencies per week + 300 tons per week for cargo
  • Macau 6,300 seats per week + no restriction on capacity & aircraft for cargo
  • Malaysia Unlimited + 700 tons per week for cargo
  • Nauru 1 frequency per week
  • Nepal 2,500 seats per week
  • Netherlands 7 frequencies per week + 700 tons per week for cargo
  • New Zealand 3 frequencies per week
  • Pakistan 2 frequencies per week Palau 200 seats per week
  • Papua New Guinea Unlimited
  • Qatar 3 frequencies per week + 400 tons per week for cargo
  • Singapore 10,000 seats per week and maximum of 200 tons per week without 5th freedom rights for cargo
  • Spain 14 frequencies per week and with 3rd, 4th & 5th freedom traffic rights and with any type of aircraft for cargo)
  • Switzerland 3 frequencies per week
  • Taiwan 450 seats per week
  • Thailand 8,700 seats per week + 700 tons per week for cargo
  • Turkey 3 frequencies per week
  • United Arab Emirates 42 frequencies per week + unlimited for cargo)
  • United Kingdom 7 frequencies per week for B747 or 10 frequencies per week for small aircraft

Upcoming New Flights

  • Bali, Indonesia
  • Beijing, China
  • Hangzhou, China
  • HongKong, China
  • Pudong, China
  • Cebu, Philippines
  • Davao, Philippines
  • Kalibo, Philippines
  • Puerto Princesa, Philippines
  • Ho Chi Minh, Vietnam
  • Kota Kinabalu, Malaysia
  • Davao, Philippines
  • Kalibo, Philippines
  • Bangkok, Thailand
  • Hong Kong, China
  • Kuala Lumpur, Malaysia
  • Macau, China
  • Davao, Philippines
  • Kalibo, Philippines
  • Puerto Princesa, Philippines

Budget Carriers’ Terminal

Acknowledging the greater role that the Clark International Airport will play in the future of the Philippine aviation industry, the CIAC is currently pursuing expansion plans to accommodate the anticipated traffic increase in the coming years. While the official transition from NAIA to Clark Airport as the Philippines’ main international gateway may still take some time, CIAC has already started preparations to fully take on this future role.

Despite global financial difficulties, the Civil Aeronautics Board (CAB) projects continuous traffic growth for both domestic and international traffic, mainly due to cheaper fares and additional routes offered by local LCCs led by Cebu Pacific, Air Philippines, and Seair. With three of the five airlines currently operating at Clark airport being low cost carriers, Clark Airport is sometimes classified as the LCC airport of the Philippines.

The LCCs operating at Clark Airport project continuous growth with the scheduled route and frequency additions of Seair and the upcoming flights of Airphil Express and AirAsia Philippines in 2012. Given that terminal capacity is one of the major constraints, the construction of a new terminal is considered to be of utmost importance. From several options put forward, CIAC Management has decided to construct a Budget/LCC Terminal with a capacity of 10 to 30 million passengers per year.

Although Low Cost Carriers (LCCs) are a relatively new entrant in the Asia Pacific region, the advent of Asian LCCs like AirAsia and Tiger Airways have successfully driven the growth of this service model in the region. As proof of the significant contribution of these LCCs, both Singapore and Kuala Lumpur airports have opened stand-alone budget terminals to serve the rapidly growing low cost air travel market. Given the experience of CIAC in handling LCCs and this global trend of rising LCC penetration rate, CIAC Management has decided to build a Budget/LCC terminal, pending the construction of the proposed gateway terminal. Detailed plans are currently being finalized and completion of the Budget/ LCC Terminal is targeted to be accomplished before 2016. Budget Carriers’ Terminal C

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