PHL secures permanent rights to fly over Russia (Business Mirror (Philippines))

THE Philippines was able to secure the rights to fly over Russian airspace via two route networks that could help enhance the air traffic between the Philippines and Europe, and between the Philippines and North America.

This immediately benefits Philippine Airlines (PAL), which has a direct Manila-London route, shortening said flights by two hours, as well as its flights from New York and Toronto, to Manila, which could cut travel time by 1.5 hours, depending on the time of year.

In an interview with PAL President Jaime J. Bautista on the sidelines of the media briefing for Philippine Gold: Treasures of Forgotten Kingdoms last Friday, he said the permanent overflights were part of the new air-services agreement (ASA) between both countries, signed in July.

Before, we had to secure permission from Russia [for these overflights] every month, he said.

PAL has said the route over Siberia is the quickest option, and is far away from any conflict areas. It also enables the carrier to save on fuel costs.

In a separate interview, DOT Undersecretary for Market Development Benito Bengzon Jr. said the overflight rights for the Trans-Siberian route network is for one designated airline of the Philippines-in this case PAL. On the Cross-Polar routes, two designated carriers of the Philippines have the right to overfly Russia. PAL is also one of the designated carriers for the Cross-Polar routes.

The Cross-Polar routes help shorten the travel time and distance from North America to the Philippines due to reduced headwinds in the polar region. A PAL source could not say exactly how much fees it will have to pay Russia each time the carrier uses the latter’s airspace, but it’s definitely big money.

The new ASA allows Philippine carriers to fly seven times a week between any point in the Philippines to three points in Russia-Moscow, Saint Petersburg and Vladivostok. The air talks were held in Moscow on July 22 and 23.

For now, said Bautista, there are no plans for the airline to mount scheduled flights to these destinations due to the limited market. Matagal pa ‘yan [it will be a while ’til we mount scheduled flights], he told the BusinessMirror.

But he said, PAL will probably continue its charter flights between Vladivostok and several destinations in the Philippines including Kalibo and Cebu. These charter flights usually reach their peak during the winter months when it gets too cold in Vladivostok. Bautista said last December, for instance, there were about 20 chartered flights from PAL using its Airbus 320.

Russia is considered one of the high market growth targets of the DOT to help the latter attain its 10-million visitor arrivals target by 2016.

Bengzon said, before the ruble fell, Russian visitor arrivals in the Philippines were growing by 30 percent. From January to May 2015, however, data from the DOT showed visitor arrivals from Russia plunged by 24.93 percent to 12,401. Arrivals from the Commonwealth of Independent States, however, jumped by 50.37 percent to 4,317. Under its National Tourism Development Plan for 2011-2016, the DOT is trying to attract 39,267 Russians to visit the Philippines this year, and 46,374 in 2016.

PAL is one of the major sponsors of Philippine Gold: Treasures of Forgotten Kingdoms, a groundbreaking exhibit of Philippine gold artifacts dating from the 10th to the 12th century in New York. The exhibit, spearheaded by Asia Society and Ayala Museum, with special participation from the Bangko Sentral ng Pilipinas (BSP), will feature over 120 gold objects from said museum (the Leandro and Cecilia Locsin collection) and the BSP. The exhibit will run from September 11, 2015, to early January 2016 at the Asia Society Museum along Park Avenue.

Doris Magsaysay-Ho, chairman of the Asia Society Philippines, believes that the Philippine gold exhibition is timely as the country hosts the Asia-Pacific Economic Cooperation Leaders Summit this November. While the Philippines has a lot of press coming out on economic issues, we thought there could also be a cultural story.

These artifacts are also very little known scholarship-wise, so with the opportunity to bring them to New York, we are holding symposiums that place the collection in the whole realm of historical scholarship.

For his part, Ayala Corp. Vice Chairman Fernando Zobel de Ayala anticipated the pride the exhibition will instill in Filipinos around the world. It will give Americans and visitors to New York the opportunity to get to know more about our rich culture and I have no doubt that it will also give Filipino-Americans great pride to see these pieces from their country.

BSP Gov. Amando Tetangco Jr. said among the objects to be exhibited in New York are pre-historic gold nuggets used as a form of currency. This shows we had a flourishing economy due to the barter trade.

Ayala Museum curator Ken Esguerra declined to place a value on the entire collection that will be exhibited in New York. He described them as priceless due to their significance to the country’s national heritage.

PAL’s Bautista said it will be securing its own insurance for the transport of the gold objects, while Asia Society and other exhibit organizers have their own insurance for the collection.

In a disclosure to the local bourse, PAL Holdings Inc. said it booked a net income of P5.86 billion in the first six months of the year, a tenfold rise from the P560.25 million registered in January to June 2014.

In the same comparative periods, revenues rose by 14.3 percent to P55.94 billion from P48.95 billion, while expenses increased by 5.5 percent to P50.6 billion from P47.97 billion.

Passenger revenues rose by 15 percent to P47.17 billion from P41.01 billion as the airline’s passenger volume grew rapidly by 37 percent.

Maintenance costs ballooned by 47.7 percent to P5.55 billion from P3.76 billion, but fuel costs dropped by 21.3 percent, as jet-fuel price averaged to $88.37 per barrel during the period under review.

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