VARIOUS airlines are applying for a
fuel surcharge with the Civil Aeronautics Board (CAB)
in view of the continuous uptick in aviation fuel
prices.
In a public hearing last week at the
CAB, Philippine Airlines (PAL) and Cebu Pacific representatives
reasoned that a fuel surcharge of $6 per passenger
per sector appears to be the best solution but at
the same time admitted this was inadequate to fully
recover losses resulting from high fuel prices.
Fuel expenses, they noted, gobble up
roughly 38% of their total operating costs. "Clearly,
with the imposition of a $6 fuel surcharge, PAL will
not even be able to completely recover from the adverse
effects of the upward movement of aviation fuel prices,"
said PAL Business Planning Division manager Enrico
F. Nabong, in an affidavit submitted to CAB.
The price of aviation fuel as of May
was $45.71 per barrel compared with $28.25 per barrel
during the same month last year, according to Mean
of Platts Singapore, the source of energy industry
information followed by most airlines worldwide.
Nabong said in fiscal year 2002-2003
when the fuel price per barrel was $31.18, PAL's fuel
cost per passenger in international operations was
$44.71. "With fuel going up at a fast rate, fuel per
passenger would average $65.55 for the month of May
2004. Accordingly, PAL's current fuel cost per passenger
increased by as much as $20.84 per passenger," he
pointed out.
PAL Fuel Management Department senior
vice president Elvis Yao noted research on the volatility
of fuel prices globally is pointing toward a continued
upward trend. "Based on the summary of monthly fuel
price forecast beginning June 2004, aviation fuel
prices will translate to an average of $43.24 up to
the end of the fiscal year," he said.
Cebu Pacific vice president for Corporate
Planning and External Affairs Ma. Della P. Vera said
Cebu Pacific is currently absorbing fuel cost of $9.3
per passenger as a result of the prevailing prices.
"We are not attempting to fully recover the fuel surcharge.
We are just looking at the most feasible way to sustain
operations of the company," she noted. Other airlines
have also filed petitions with the CAB for fuel surcharges.
These include: Asiana Airlines, with
a proposal for $7/sector; Air Niugini, $10.50/sector
regardless of fare type and class service; British
Airways, $4/sector; China Airlines, $7/sector; and
Cathay Pacific, $5 and HK$4/sector between Japan,
Korea and Southeast Asian; HK$108 or equivalent flight
coupons between Hong Kong and Southwest Pacific, North
America, Europe, Middle East, Africa, South Asia sub-continent
between Bangkok and Dubai.
Also pushing for the surcharge are:
Eva Air, $6/sector; Malaysian Airlines, $6/sector;
Royal Brunei, $5 for Manila-Bandar Seri Begawan and
$2.50 for Bandar Seri Begawan and beyond; Qantas Airways,
$10.70/sector on international flights and $3.90 for
domestic; Singapore Airlines,$5/sector; Vietnam Airlines,
$5/sector; Qatar, $2.50/sector; and Saudia Airlines,
$5/sector.
Northwest Airlines is applying for a
$20 passenger fare hike. Vera said Cebu Pacific and
PAL are petitioning for a fuel surcharge instead of
a fare hike because this offers customers more transparency.
"With the fuel surcharge, airlines
can easily adjust depending on the direction of price
of the fuel," she explained.
Customs
temporarily lifts safeguard duties on chicken
THE Bureau of Customs (BOC) recently
ordered the lifting of safeguard duties on imported
chicken and chicken products to ensure stable supply.
In a letter to Customs Commissioner
Antonio M. Bernardo dated May 21, 2004, Agriculture
Secretary Luis P. Lorenzo said the department sees
a possible shortage in chicken supply in the coming
months especially after the industry cut production
in February and March at the height of the Avian influenza
or bird flu scare, and demand surged in April and
May.
Lorenzo said the erratic condition in
the supply of chicken products contributed to higher
prices. He said the Department of Agriculture (DA)
is open to requesting for the reimposition of the
safeguard duty should conditions warrant it.
In September 2002, the DA sought the
imposition of safeguard duties on five imported chicken
products because their trigger prices were breached
or the actual cost insurance freight (CIF) import
price of the products was less than its corresponding
trigger price.
Lorenzo
Shipping eyes payment of debt in three years
DOMESTIC freight carrier Lorenzo Shipping
Corp. (LSC) expressed optimism it will be able to
clear all its outstanding debts in three years.
During the sidelines of the company's
stockholders meeting last week at the Dusit Hotel
Nikko in Makati, LSC chairman Julio O. Sy said the
company's strong performance - due to improved marketing
and cost-cutting measures - will help Lorenzo clear
its liabilities.
Sy said the company, the local affiliate
of international cargo liner Neptune Orient Lines
(NOL), will source debt payment through internally
generated funds. In its first-quarter disclosure,
LSC reported liabilities of P702 million and long-term
debts of P440.06. Total assets amounted to P2.05 billion.
The company's creditors include Metrobank,
Equitable-PCI Bank, and Robinson Savings Bank, biggest
lender. "The company is in a better position right
now. We have converted our $16-million loan, which
was guaranteed by NOL to local denomination under
a P40 to $1 exchange rate a few years ago," Sy explained.
LSC saw a 1,128% growth in net income for the first
three months of the year to P16.854 million from P1.372
million during the same period last year.
Total revenue from January to March
rose 9.1% to P284 million from P258 million. The company
said several factors contributed to the improvement
in the bottomline.
These are the 7% increase in container
volume; the implementation of an Automatic Fuel Rate
Adjustment and a General Rate Increase for domestic
cargoes in April and October 2003, respectively; and
improved cargo mix.
THE Cold Chain Association of the Philippines
(CCAP) recently appealed to the government for financial
assistance to improve the logistics system for perishables.
CCAP president Anthony Dizon said the
sector is in need of support facilities. "We definitely
need government intervention, especially on financial
resources, for us to be able to carry on with our
plans," he said. Dizon said the association is working
with the Department of Agriculture (DA) so it can
gain access to the Sustainable Logistics Development
Plan (SLDP) of the Development Bank of the Philippines
(DBP).
The SLDP, DBP's three-year strategy
to improve the system of moving goods and people in
the country, has allotted a P16-billion credit fund
for the development of cold chain facilities. But
Dizon said there is no coordination between the DBP
and the CCAP, the only nationally-accredited organization
of cold storage companies in the country, as to the
progress of the SLDP's cold chain network.
"The cold storage companies have insufficient
financial capability to put up world-class cold storage
facilities and acquire modern equipment that will
adhere to the high standard of food handling and storage,"
he said. Meanwhile, the National Meat Inspection Committee
(NMIC) has announced plans to put up a centralized
holding depot for meat inspection prior to distribution
to the domestic market.
"We would play an active role in policy-making.
As a matter of fact, we are taking part in the NMIC
Advisory Council," Dizon said.
NENACO inaugurates
new satellite receiving station
NEGROS NAVIGATION COMPANY (NENACO) in
partnership with Fast Cargo Logistics Corp. recently
inaugurated its new less than-container load (LCL)
cargo receiving station in Navotas.
"With the opening of this new facility,
our customers are assured that their cargo is efficiently,
safely and immediately delivered to its destination.
This underscores the company's long-term commitment
to remain the safest, most economical and convenient
means to send cargo to any destination in the country
today," NENACO president Conrado A. Carballo said.
The 400-square meter facility, located
at Virgo Drive, Northbay Boulevard (South), Navotas,
Metro Manila, serves as a one-stop drop-off point
for cargo deliveries in any of NENACO's ports of destination
in Visayas and Mindanao.
Open 24 hours a day, seven days a week,
it will cater to shippers based in CAMANANOVA (Caloocan-Manila-Navotas-Novaliches-Valenzuela),
Pasig and Makati where some of the company's biggest
clients are located. "With the opening of the new
satellite cargo receiving facility, shippers do not
have to go through the hassle of coming over to the
pier just to send their loose cargo.
They can just drop it off at the LCL
Cargo Receiving Center and still be assured that their
shipment is handled as efficiently as the ones processed
at the Cargo Express Center here at the NENACO office,"
NENACO National Freight Division head Gerry Enciso
said. He added the center is also the company's way
of decongesting the existing LCL receiving process
within the pier, paving the way for a more systematic
and orderly dispatch of cargo.
Fast Cargo Logistics Operations manager
for Forwarding Romeo Acosta said the new facility
assures customers that every transaction will take
a maximum of 15 minutes. NENACO services ten ports
of destination.
CTSSI aims to become
global supplier of marine industry software solution
CONTAINER TERMINALS SYSTEMS & SOLUTIONS,
INCORPORATED (CTSSI), a subsidiary of global port
operator International Container Terminal Services,
Incorporated (ICTSI), aims to become a global supplier
of marine industry software solutions in the immediate
future.
This was disclosed in a recent interview
with PortCalls by the two leading personalities at
the forefront of CTSSI business activities - General
Manager James Roberts and Business Development Manager
Pabs Peñalba. According to Roberts, he is confident
that the company's corporate vision can be achieved
through its graphical-based integrated cargo management
solution that is priced competitively and suitable
for small to medium-sized container/cargo operations.
CTSSI cargo management solutions consist
of three main software packages: GTS Container Terminal
Software, GCS General Cargo Software, and GTS Rail
Software. "We supply a range of software functionality
that caters to all of the needs of the industry.
The software is designed to be scaleable
and easily customized to handle any type of terminal
handling equipment and site configuration," he said.
Roberts also revealed that the software's user interface
was designed to be simple and intuitive, a factor
which allows training to be rapidly carried out.
All software modules incorporate multi-language
capability which allows user appreciation to take
place at an accelerated pace. Each of these features
contributes to an overall faster implementation time
frame.
Core Strength
Peñalba describes the CTSSI software solutions as
mature, having been in "real time" terminal operation
for the past seven years. The software uses advanced
software development technology employing modern programming
languages and is easily interfaced to third party
programs.
He stressed that CTSSI offers "choice"
- choice of relational databases SQL Server or Oracle,
with choice of operational module functionality. Whichever
database is favored by the client, CTSSI can supply
the full range of operations product modular functionality
operating on a single database.
This includes the complete range of
terminal and general cargo, CFS and rail software
programs. He also adds that the software offers a
wide range of web programs and electronic data interface
(EDI) messaging to enable the terminal to transact
business electronically with the wider port community.
With regard to the frequency of software version upgrades,
CTSSI's policy is to incorporate new vendor software/tools
releases in its products only after exhaustive testing
and evaluation has taken place. Enhancements to functionality
are released on a regular basis.
Positioning In The Port Technology
Industry
Peñalba said that "for our GTS container terminal
product, we are aiming for a market segment starting
with small "green-fields", or startup sites of up
to two million-TEU operations. "In combination using
our GCS product, we are also focused on developing
markets where general cargo and containers are simultaneously
being handled." Roberts further explained this market
positioning strategy. "Our philosophy provides the
port operator with a growth path for adding functionality
as the business expands.
This means that a base system can be
introduced to operations at a lower cost and additional
modules added as business expansion and affordability
dictates. As CTSSI always maintains up-to-date applicability
of the software technology, an initial investment
in the company's product ensures that the software
always continues to support the operation as it grows,"
he remarked. With this approach, the CTSSI market
focus is to establish ongoing relationships with its
clients to ensure computer systems enhancement keeps
pace with the growth of the business.
How Will Clients Benefit From CTSSI
Technology Solutions? Both Roberts and Peñalba enthusiastically noted
that CTSSI management and staff are comprised of people
who have considerable industry experience in both
software development and terminal operations.
In combination with its parent organization
ICTSI which possesses a highly acknowledged global
expertise in terminal operations, CTSSI is well placed
to provide appropriate and specific solutions for
any type terminal operation. The company also understands
that software support is a major consideration for
the client. Thus, it offers a range of options and
response times for ongoing maintenance which can be
tailored for client-specific needs.
This encompasses periodic software upgrades
supplied to the client within the terms of its support
agreement.
CTSSI main office is located at G/F
ICTSI CFS 2 Building, Manila International Container
Terminal, MICT, South Access Road, Manila (telephone
numbers +632 245-02569 and +632 247-8203). The company's
web site is found at www.ctssi.net.
Air panel pushes for
more stopover rights in China
THE Philippine air panel is hoping to
expand its stopover rights between three city pairs
in China to give more market access to Philippine
carriers, said the Civil Aeronautics Board (CAB).
CAB executive director Tomas Mañalac
said China, however, is reluctant to grant the Philippine
carriers stopover rights to Beijing, Shanghai and
Guangzhou. "These points are China's most lucrative
areas and they do not want any competition there so
we will only be allowed stop-over access to Xiamen
and some other points in China," he explained.
Aside from expanded stopover rights,
the Philippine air panel is negotiating for a total
of seven gateways to be opened to Philippine carriers,
including Beijing, plus six other points with one
beyond point at seven times per week.
In addition, the panel is pushing for
increased cargo and passenger capacity. "We have projected
about 6,000 seats per week by mid-March, 8,000 seats
from mid-March 2006 and 10,000 seats from mid-March
2008," Mañalac said.
