The Market Monitor Minding the Nation's Business
The battle for the construction of an alternative to the ageing and dilapidated Ninoy Aquino International Airport (Naia) continues as the demand for more airports gained added urgency with passenger volumes increasing rapidly.
Air passengers passing through Manila would probably more than double to 140 million by 2035, from about 60 million in 2014, according to the International Air Transport Association. Naia, with four terminals, is already handling traffic in excess of its capacity of 31 million air passengers a year.
There are currently firm offers for the development of the former Clark Airbase in Pampanga, Sangley Point, a former US naval base in Cavite; and a new development in Bulacan.
All-Asia Resources and Reclamation Corp. (ARRC) said it would offer a development plan for Sangley Point.
ARRC is a venture of property magnate Henry Sy’s Belle Corp. and the Solar Group of businessman Wilson Tieng; it offered to spend $20 billion (P1 trillion) to build an airport and seaport at Sangley Point.
“Clark and Sangley are strategically located to serve the northern and southern parts of Luzon, said ARRC Vice Chairman Edmund Lim. “Those in Metro Manila can choose which one is more convenient to them, which will also help ease traffic.”
An international airport in Sangley, Lim said, can be up and running in four to five years after the government gives a notice to proceed.
“It would be built by our company in partnership with foreign partners, without the need for a single cent from the government. We have already signed all the contracts to make this happen. We are ready but we need the government to give its nod,” he said.
Clark only needs to be upgraded Lim said, adding that “its operations and maintenance should be privatized,” alluding to a government decision to continue to maintain and operate Naia apparently to give way to the development of a new airport.
Naia has two intersecting runways and limited space for expansion, especially for a new parallel runway, Lim observed. “We can have more than one airport we can be proud of. Clark is underutilized because it really needs to have a new terminal and infrastructure for easy access. It is the one that must be privatized, not Naia,” he said.
San Miguel Corp. (SMC) is also offering to develop more than 2,000 hectares of land in Bulacan for another Naia alternative with an investment of P700 billion.
The project is envisioned to handle an initial 50 million passengers yearly. That figure can be doubled with the addition of runways and terminals.
SMC has submitted the plan to the Department of Transportation (DoTr) for up to six runways to be built on the Bulacan property.
SMC President Ramon Ang said the project would be built without any guarantee or subsidy from the government.
“We will finance everything, build everything by ourselves and take the risk,” he said.
The government could sell the 600-hectare property where the current Naia complex stands for $20 billion, and convert the area into a business district, he said.
Air passengers passing through Manila would probably more than double to 140 million by 2035, from about 60 million in 2014, according to the International Air Transport Association.
Naia, with four terminals, is already handling traffic in excess of its capacity of 31 million air passengers a year.
A bigger airport will help the nation’s travel and tourism industry, which accounted for 6.1 per cent of the economy in 2016, up from 4.2 percent the previous year, according to data from the World Travel and Tourism Council.
SMC, in its Bulacan proposal, plans to initially build four runways with a length of 3.5 kilometers and width of 600 meters that can serve 100 million passengers annually. Eventually, the project would be expanded to six runways and service 150 million passengers, according to the proposal.
CAPA Aviation Analysis, in a new report, discussed expansion issues at Naia, how airlines were dealing with limited slots, and how the Philippines was missing out on valuable tourism prospects at a time of robust economic growth.
Because the government was moving “slow” in establishing a new international airport, Naia passengers still have to cope with a service level “far below that of its Asian peers.”
“The inability to add flights has hampered growth,” CAPA said.
“Naia would have experienced much faster passenger growth over the past few years, given the rapid growth in the Philippines economy, if airlines had been able to add more flights,” it added.
Air passenger growth has been on the rise at Naia, which handles about 80 percent of all international traffic, and 90 percent of domestic traffic.
Naia, designed to handle about 31 million passengers yearly, accommodated about 39.5 million passengers last year, 8 percent higher than the level in 2015. The previous year, passenger growth was at 7 percent.
CAPA said the Philippines, which grew 6 percent last year and would likely expand by that figure over the next few years, was missing growth opportunities.
“Typically, passenger growth is at least double the GDP growth, but the Philippines has fallen short of this metric over the past few years due to the congestion at Manila,” CAPA said.
Naia has very limited expansion options, given its locations within the capital district. Airlines have been coping by up-gauging, or using larger aircraft, to accommodate more passengers without adding flights, taking off-peak hours and using more secondary gateways.
“However, the new airport is still in the study phase and is at least several years away from opening. In the meantime, it is imperative for authorities to invest in upgrading and improving the existing airport,” it said.
“While there is no space at Naia for new terminals or runways, upgrades to the existing terminals are planned, along with the anticipated air traffic management improvements,” it added.
LUIS LEONCIO