Mabuhay ang Pilipinas!


In business aviation, the Philippines has always flitted on the periphery. On one hand, it is home to more billionaires than Saudi Arabia, yet on the other, the Asian Development Bank said that in 2015 just under a quarter of its population lived below the poverty line.

This polarisation of fortunes is especially evident in Manila, the country’s capital. Hidden amongst the shimmering new office buildings and multimillion-dollar properties are an estimated 3.1 million homeless people, the highest number of homeless people in any city, anywhere in the world.

The country’s economy has been one of the world’s fastest-growing, averaging 6.35% in GDP terms in every year since 2010, more than double the average global growth rate during the period. Growth only dipped below 6% in 2011, when exports slowed, largely due to the global economic slowdown. The next year growth had rebounded to 6.68%, again beating the global average of 2.4%.

The main focus for the economy, as well as aviation, is Manila, which is the most densely populated city in the world. Its main airport, Ninoy Aquino International Airport, can at certain times of the day, best be described as chaotic. As well as being the home base and major hub for all of the airlines based in the Philippines, including Cebu Pacific, it is also home to the majority of business aircraft based in the country.

At the end of 2017, Asian Sky Group says, there were a total of 48 business jets based in the Philippines, a drop of two aircraft from the end of 2016.

Those aircraft that are based in the country tend to be older, smaller aircraft. According to AMSTAT, the average age of the fleet of business jets in the country is 18.7 years.

Breaking the aircraft down into age groups shows the highest proportion of the fleet, almost a quarter of all business jets in the country, are over 31 years old. The second highest age grouping is between 0 to 5 years old, which is just over 20%.

The largest aircraft currently registered in the country is a Gulfstream G550, followed by a G450 and several Gulfstream IVs. At least one Gulfstream G650 operates in the country, although this aircraft is not registered on the local RP-C registry.

As well as the Gulfstreams, there used to be a locally registered Bombardier Global 5000. Unfortunately, that aircraft overran the end of Tacloban’s runway at the start of 2015 and was written off beyond economic repair. Local reports suggest that the fuselage will shortly be turned into a restaurant.

Passengers using Ninoy Aquino Airport grew by 6.9% in 2018, jumping over the 45 million mark for the first time. But it is not the only airport serving Manila.

Although further out from metro Manila, Clark International Airport has been growing in popularity. This is partly due to congestion at Ninoy Aquino Airport, and partly due to an expansion of facilities.

Clark was formally the largest US Air Base outside of the US, until it was handed back to the Philippines in 1991. Although it is just under 100km north of the centre of Manila, its catchment area includes an estimated 23 million people, including the northern parts of Metro Manila, as well as neighboring Quezon City.

As a civil airport, Clark has grown rapidly since 1991. Its original passenger terminal has seen two extensions, and a new terminal is expected to open next year. The airport is mostly home to domestic and regional flights, although Emirates and Qatar operate direct flights to Dubai and Doha respectively.

The airport is also the home to Metrojet Engineering Clark, which operates a 13,000 square-feet hangar at the airport. The company undertakes base maintenance on the larger Bombardier, Embraer and Gulfstream aircraft, as well as having avionics, wheel and tire workshops.

Elsewhere in the Philippines, Aviation Concepts Technical Services Inc (ACTSI) recently signed a deal with Subic Bay International Airport, that it hopes will transform the airport into a regional business aviation hub.

Under the terms of the agreement, ACTSI will spearhead the airport’s plans to attract business aircraft in the region for maintenance. Later in 2019, the company will complete an upgrade on its 18,000 square-meter hangar, which already has Part-145 approvals from Bermuda and the Cayman Islands. The company says it is currently working on Part 145 approvals from the US FAA.

ACTSI will be hoping to attract business aircraft from around the region for maintenance, rather than just those visiting the Philippines on business or leisure.

That decision will largely be based on price, as well as availability. Subic Bay Airport, much like Clark Airport, is in a free-trade zone, which means that no tax is payable on aircraft maintenance. The average and median wage in the Philippines is also low, with the average wages in the country making it to the 63rd position in the global wage bracket.

For business-aircraft owners, that could make the Philippines an attractive place for major work on their aircraft.

We have already seen this happen in the airline world. Virgin Atlantic used to fly their Airbus A340 aircraft from London to Manila for maintenance work with the Lufthansa Technik outstation there.

The above story originally appeared as the editorial in our new One Minute Week Asia, our new weekly newsletter dedicated to business aviation in Asia. To find out more, and to subscribe for free, please click the link below.

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