PAL ready to invest $400 M for NAIA 2 expansion

MANILA, Philippines - Philippine Airlines has proposed to invest $400 million to expand the Ninoy Aquino International Airport Terminal 2, citing the need for new capacity given the worsening congestion in the country’s main gateway.

However, PAL president and COO Jaime Bautista said if the Manila International Airport Authority (MIAA) proceeds with a plan to reshuffle airline operations, PAL may no longer proceed with its proposal to expand T2.

 “We proposed to expand NAIA 2 because we need a new airport. But there are new developments now,” Bautista told The Star recently.

The government wants to move the local operations of PAL and Cebu Pacific to T2, currently PAL’s hub for local and international flights.

PAL’s international operations will move to NAIA T1 while other international airlines in NAIA 1 will then move to NAIA T3.

Bautista said PAL has no problem with the proposed reshuffling of terminal operations, which would be easier to implement compared to expanding T2.

“That is easier to do rather than propose a new international terminal, but it is really important to have a new international terminal. We are open to both possibilities for the good of the country,” Bautista said.

He said if PAL does not proceed with the expansion of T2, the government could still proceed with the project or even convert it into a low cost domestic terminal, similar to other airports, which have separate terminals for budget airlines, he said.

“They can convert it into a low cost domestic terminal like other airports, for example, Singapore, which has a budget terminal. That is easier to do,” Bautista said.

But if the reshuffling of terminal operations does not happen, Bautista said PAL would pursue its proposal to expand T2.

PAL has already submitted its unsolicited proposal to the Department of Transportation (DOTR) and the Manila International Airport Authority (MIAA). If there are no problems, the company may complete the project by 2020.

The cost of the project, Bautista said, is $400 million.

Under the expansion plan, PAL wants to lease some of the government-owned idle lands that are adjacent to the existing T2. This includes the areas occupied by Nayong Pilipino where the Philippine Village Hotel is and another area of the Philippine Amusement and Gaming Corp. (Pagcor).

PAL will need a total of 33 hectares for the expansion but at present it only has a lease contract covering 18 hectares, Bautista said.

The MIAA would need to get an opinion from the Office of the Government Corporate Counsel if PAL can lease the additional properties, he added.

According to PAL’s preliminary studies, there will be a new terminal building with a total floor space of approximately 90,000 square meters for T2 Annex designed with 11 to 12 wide-body aircraft gates.

The proposed annex is intended to handle approximately 14 million passengers yearly, according to PAL’s letter to MIAA dated May 10, 2017, as cited by Star columnist Boo Chanco.

 At present, T2 has the capacity to handle 7.5 million passengers per annum.  Last year, it handled 13.2 million passengers through the three terminals as T2 was unable to handle some of the volume. This was an increase from 11.9 million in 2015.  

At the end of the day, what is important is for the country to have another major gateway as soon as possible, which it can do by expanding Clark, Bautista said.

“It’s really good to have another airport aside from NAIA but Clark (International Airport) should be developed,” he said.