Annoyed by Anti-Monopoly Policy, PAL Puts Airport Plans on Hold

cover312 smallIn a press briefing last week, Philippine Airlines (PAL) President and CEO Ramon S. Ang announced that the airline’s plans to construct a $6 billion airport as an alternative to the outdated and overcrowded Ninoy Aquino International Airport were being put on hold. According to the Philippine Star (which still insists on calling the privately-owned PAL the nation’s “flag carrier”) headline, the reasons are described as “unclear government policy”, but from Ang’s comments the “indefinite’ postponement of the project is evidently the result of deep unhappiness with the surprising unwillingness of the Aquino Administration to endorse PAL’s efforts to create a monopoly in the local air industry.

The sticking point as far as PAL is concerned arose with the issuance of the terms of reference for the planned P17.5 billion Mactan-Cebu International Airport project, which would presumably also be applied to PAL’s proposed airport or any other future projects. The original terms issued last December by the DOTC prohibited any airlines or airline-related businesses from bidding on the Mactan-Cebu project, which instantly eliminated PAL, PAL’s major owner San Miguel Corporation, and Cebu Pacific’s parent company Cebu Air Inc. from the contest to win the project. After strong criticism from these three and others, the DOTC revised the terms last month to limit airlines and related businesses to 33% ownership of the project. Significantly, however, the 33% ceiling was extended to ownership in bidding consortiums; in other words, such consortiums would be excluded if more than 33% of their equity was held by airlines or airline-related businesses.

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About BenK

I write a column for The Manila Times on Tuesdays, Thursdays, and Saturdays. Most of the energy sector and the heads of several government agencies probably wish I didn't.

Post Author: BenK

I write a column for The Manila Times on Tuesdays, Thursdays, and Saturdays. Most of the energy sector and the heads of several government agencies probably wish I didn't.

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15 Comments on "Annoyed by Anti-Monopoly Policy, PAL Puts Airport Plans on Hold"

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Hep
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Boo-effing-hoo, PAL.

Libertas
Guest

suspect this has something to do with international regulatiins/pressures.

shame no change in isolationist/protectionist stance when it cimes to trans pacific partnership. a huge strategic mistake by philippines to ignore, and be left out in the economic cold.

Libertas
Guest
@benk I agree And pleased that you are one of the few who highlight and understand the issues – complex as they may be. But you have to be in it to win it and the decisions currently being taken/framework agreement, as we speak, will mean that the philippines has no negotiation leverage, even in the near future,once the train has left the station. And once japan and south korea join then it becomes a significant economic and political bloc. I can assure you of one thing – the americans are very disappointed by the administrations stance/lack of concrete action.… Read more »
Legati
Guest

Anti-Monopoly Policy in a system of Monopoly is what is being feed to the public -what a sack of horse drop.

BlueStreak
Guest

No one SHOULD blame you or me for saying that the Philippines have BS economic policies.

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