NEPA opposes government on selling NAIA I, privatizing management viable but needs further study

2 November 2011


Recently DOTC Secretary Mar Roxas made pronouncements that the government is studying the plan to sell NAIA 1 to raise funds for the development of a premier gateway airport ostensibly that of the Diosdado Macapagal Airport.  The National Economic Protectionism Association (NEPA) opposes the government plan to sell the NAIA I but is amenable to privatizing airport management if this will pave the way for a more efficient and friendlier environment for air travelers.

NEPA President Bayan De la Cruz states that, “selling government assets such as the NAIA I should not be the first option as the NAIA already constitutes part of the national patrimony. If the intent is to provide for better services, then privatizing management can be considered an option”.

NEPA President Bayan De la Cruz states that, “NEPA is particularly concerned with the aviation industry as two of its stalwarts were pioneers in the airline industry. Established in 1934, its roster includes Ramon Fernandez, Sr. who co-founded the Philippine Airlines in 1942 and became the cornerstone for the airline industry in Philippines and the FEATI airline established by Salvador Araneta.”

“If privatizing NAIA I will only result in fulfilling vested business interests and earn revenue for government coffers without the assurance for a quality world-class service among major users such as airlines and passengers, the end goal then is defeated,” dela Cruz warned.

Metro Angeles businessmen and other locators at Clark Economic Zone have been lobbying the government to make DMIA as a premier gateway but due to distance to Metro Manila, the government has been reluctant to go full blast on its development as the Philippine’s primary international gateway.

NAIA terminal 1 has recently been dubbed as the world’s worst sleeping airport by sleepinginairports.net, a website dedicated to information on airports with sleeping facilities.

“The tag on NAIA terminal 1 as the world’s worst is not a reflection on the entirety of NAIA,” said dela Cruz, adding “terminal 2 and 3 which are part of the Ninoy Aquino International Airport are at par with the best in the world.”

The terminal was designed in 1973 and finished construction in 1981, the time when backpackers and low-cost airlines were still unheard of in air travel around the world. With the advent of low-cost travel brought about by the birth of budget airlines, budget travelers increased astronomically and flight connections were made easier allowing passengers to connect on transit and the need to sleep in airports to catch flights.

“The first terminal 1 was not designed to have ample space for sleeping transit passengers and backpackers unlike its modern and state-of-the-art rivals in developed countries,” said dela Cruz.

Only Centennial Terminal 2 which is operated by PAL and Terminal 3 which is operated by Cebu Pacific have been built in recent years but used exclusively by for their domestic and international operations. International airlines embark and unload passengers and cargoes at Terminal 1 at the far end of the NAIA complex.

“It is no surprise that we qualify for having the world’s worst being compared to the best and newly-built terminals around the globe but what is disturbing is the misconstrued fact that reflects the entire NAIA complex as the world’s worst,” dela Cruz argued.

The NEPA president proposes the swapping and sharing among airline users at the NAIA complex by establishing guidelines on the effective and efficient use of the airport. Among those suggested is to allow international airlines to share the underused Terminal 2 and 3 to maximize capacity of the two newly-built modern terminals.

“To improve the image of NAIA as our main gateway airport, we should allow international airlines to share with our two major domestic airlines for the use of terminals 2 and 3 and transfer smaller domestic airlines to the old terminal 1,”  Bayan dela Cruz suggested.

Under this arrangement dela Cruz opined that NAIA can go ahead with the construction of a new terminal at the present Domestic Terminal allowing for the full modernization of the entire NAIA complex and make Manila in the league of capital cities around the world with best airport.

As regards to the current policy tack of government on airport privatization, the young NEPA president says “it is high time the government privatizes the operations of some if not most of our airports including terminals to improve quality of service not only among our international airports but among domestic airports as well,” adding that government cannot afford to continue operating airports with minimal resources allotted in the budget.

“We lack capital to develop our more than 86 airports and the government is not even willing to invest on this kind of infrastructure that is vital in national development,” dela Cruz says. The Philippines is but one of the few countries around the world where airfields abound as these were built by the Japanese and Americans during World War II.

Currently, around half of these airports have regular scheduled commercial flights serviced by domestic airlines such as Philippine Airlines, Cebu Pacific, Airphil Express, Zest Airways, and SEAir. Smaller community airports have seasonal flights serviced by air taxis and charter airlines.

The other half of the Philippine airports have become unserviceable due to neglect in management and poor facilities, but they form part of an untapped pool of national airspace resources whose economic value is not realized by the government for almost 70 years now.

“Take for example of Guiuan Airport which is capable of handling bigger aircrafts and could serve as access to Calicoan Island in Eastern Samar touted to be as the next Boracay, yet it is deteriorating idly,” dela Cruz declared, referring to the World War II vintage airport where U.S. fighter jets took off and flown the atomic bombs that was dropped in Nagasaki and Hiroshima.

The young NEPA president says privatization on the operation and modernization of airport terminals is long overdue since deregulation of the airline industry has outgrown Philippine airports.

Under NEPA’s proposal, the consortium could be a combination of Filipino-owned corporate entity partnering with Local Government Units or vice versa. However, he says that government-owned and controlled airport operators may remain involved in airport operations to ensure competition in this sector.

But Dela Cruz cautioned the government to be very careful in privatizing the country’s airports as this involves national security and patrimony. He urged government to exploit the BOT law by allowing Filipino consortiums to handle operations of local airports.

“Our position is that government should re-block Philippine airports according to regional locations,” Dela Cruz added, saying that the country’s more than 85 airports in the regions could be bid out as one block to prospective local airport developers in effect creating probably 17 blocks all over the country excluding Ninoy Aquino International Airport in Manila.

Dela Cruz cited Eastern Visayas as an example. The region according to him have some eight airports including the idly deteriorating Guiuan Airport, airports in Catarman, Calbayog, Catbalogan, Naval, Ormoc, Naval, Hilongos  and Daniel Z. Romualdez Airport in Tacloban which is among the country’s top 10 airports in terms of passenger volume. These he said could be bid out as a block to one operating consortium.

“The idea for the re-blocking of airports according to regions is to allow for the economy of scale in operating airports, so that when you are losing in one airport you could offset the losses on the other operating airports and still survive in the competition,” Bayan dela Cruz concluded.

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