Why SMC’s Us$10-B Airport Is Needed

SMC, which has diversified from food and beverage to infrastructure, plans to pursue the project under the government’s 25-year build-operate-transfer (BOT) scheme.

MANILA – Foresight could have spurred powerhouse San Miguel Corp. (SMC) to build its proposed US$10 billion airport as the nation’s new international gateway.

Reflecting its dynamism as a major infrastructure builder, the airport takes into account the rapid rise of passenger traffic in Metro Manila, the nation’s trade and industry hub.

From 31.88 million in 2012, the traffic is projected to rise to 49.8 million in 2020, 75 million in 2030, and 106.7 million in 2040.

The projection, which includes expected traffic from neighboring Central Luzon and Calabarzon regions, is based on a study by the Japan International Cooperation Agency (Jica).

As SMC has envisioned, the facility aims to replace the congested and more than three decades old

Ninoy Aquino International Airport (NAIA) Terminal 1 in Pasay city.

BOT scheme

As it is now, the NAIA is handling over eight million domestic and international passengers a year, nearly double its designed capacity of 4.5 million.

Unlike the NAIA, the new airport would have four runways to cater to a high-passenger capacity.

Under SMC’s proposal, the airport will initially cover the NAIA’s 400-hectare area to be expanded later to 800 hectares.

The scheme allows SMC to operate the project to recoup investments before turning it over to the

The conglomerate’s proposed airport coincides with the expansion plan of its aviation unit Philippine Airlines (PAL), a joint venture with ethnic Chinese taipan Lucio Tan. SMC has a 49 percent stake in the national flag carrier, while Tan owns the remaining  51 percent.

Expansion plans

Eyeing the lucrative United States route, PAL’S plan calls for the deployment of its fleet of newly acquired Boeing 777-300ER aircraft for the long-haul flights to the US.

The flag carrier viewed the reclassification of the country’s aviation safety rating to Category 1 as a boost to tourism and trade that would open new and exciting opportunities for PAL.

Passengers can enjoy nonstop flights to Los Angeles and San Francisco aboard new aircraft equipped with the most modern cabin and state-of the-art amenities, including lie-flat beds in business class, PAL President and Chief Operating Officer Ramon S. Ang said.

Currently, PAL operates a total of 26 weekly flights to the US, with frequencies to Los Angeles, San Francisco, Honolulu and Guam.

The flag carrier intends to deploy six Boeing 777-300Ers costing about US$1.2 billion, part of the airline’s fleet modernization program, for the US flights.

For flights to Honolulu and Guam, PAL will continue to utilize new wide-body Airbus A330-300s and single-aisle A320-200s.

Apart from fostering a new era in the flag carrier’s transpacific service, Ang said PAL would also explore possible airline partnerships with foreign carriers to maximize the company’s growth potential.