PHILIPPINE Airlines (PAL) is going ahead with plans for a company spinoff effective October 1, which will affect 2,600 employees in its catering, airport services, and telesales operations divisions.

The job transfers to third-party companies will create savings of US$10-15 million annually, according to PAL COO Jaime Bautista, who said in media reports that it was “a painful but necessary decision to ensure PAL’s viability and long-term survival”.

The flag carrier was hit by union protests last Friday and Monday, staged by the Philippine Airlines Employee Association, who want lawmakers to review the legality of the subcontracting agreement.

PAL spokesperson Cielo Villaluna told TTG Asia e-Daily: “These measures are part of a cost-control strategy – in fact, a survival strategy – in response to fuel price increases, the global recession, and cut-downs in travel. We’re the only (airline) company in Asia that has not spun off its catering department.”

Bautista had reported to PAL stockholders back in 2009 that the flag carrier foresaw workforce cuts would be needed after the global economic slump caused major slowdowns in travel.

PAL posted staggering losses of US$301 million in 2008, after registering profits of US$30.6 million in 2007. Prior to this, PAL underwent nine years of restructuring following the 1997 financial crisis.

In August, the airline netted PHP3.09 billion (about US$72.5 million) for the fiscal year ended in March, but then posted a net loss of US$10.6 million in the subsequent quarter ended June 30.

PAL, which currently operates a fleet of 36 aircraft, has a confirmed order for four A320s and four B777-300ERs, due for delivery between 2012 and 2013, which should help address efficiency costs associated with volatile fuel prices.

RAIL Europe launched yesterday its new B2B online portal for South-east Asia, giving travel agents in the region access to the company’s range of European rail products.

Agents will be able to book rail passes offered by Eurail, BritRail, Swiss Passes and France Railpass among others, as well as domestic and international point-to-point tickets offered by Eurostar, TGV, Thalys, AVE, FrecciaRossa and other train operators.

“We are launching this new B2B portal with a South-east Asian focus to respond to the demand from our strong GSA network in the region, as well as the outstanding sales result achieved”, said Rail Europe CEO Pierre-Stéphane Austi.

Between January and July 2011, Rail Europe’s bookings from Asia increased by 60 per cent. In South-east Asia, its Vietnam business saw a 91 per cent jump, while there was also significant growth from the Philippines (71 per cent), Malaysia (59 per cent), Singapore (54 per cent), and Indonesia and Thailand (both 28 per cent).

Dynasty Travel, Rail Europe’s Singapore GSA and appointed handler for its B2B and B2C operations in Singapore, Brunei, Malaysia, Indonesia and the Philippines, will provide support for agents using the new online B2B services.

Juliana Gan, general manager outbound travel with Dynasty Travel, said: “Other than leisure travellers, corporates will be an important clientele for this B2B platform.”

Gan said her corporate clients, which include the likes of Hogg Robinson Group and American Express, were more inclined to use rail instead of air connections in Europe. “High-speed rail travel in Europe is faster compared to travel by air, plus it is more comfortable and saves on check-in time,” she said.

“It is also more accessible, especially in Germany where the industrial areas have little plane access.”

Meanwhile, Rail Europe’s Asian flagship retail outlet opened in Hong Kong in May (TTG Asia e-Daily, May 16) has resulted in a 50 per cent increase in bookings from the Hong Kong market since the launch, according to Austi.

“The operation was an experiment and has been really successful. The 10 queue lines at the retail outlet are always occupied with consumers,” he said. “We plan to open another retail outlet in Hong Kong next year.”

THE GLOBAL aviation industry performed better than expected in the first half of 2011, despite turbulent and uncertain economic conditions in Europe and the US, escalating oil prices, and political turmoil in the Middle East.

IATA’s 2011 industry profit expectations were upgraded to US$6.9 billion from the US$4 billion projected in June, as passenger demand remained robust in the interim. Weak profit margins are predicted across all regions in 2011, with the exception of Africa, which is expected to just break even.

Speaking today at a press conference held at IATA’s Asia-Pacific headquarters in Singapore, Tony Tyler, the association’s recently installed director general and CEO (TTG Asia Hot Moves, June 7), said: “Airlines are going to make a little more money in 2011 than we thought. Given the strong headwinds of high oil prices and economic uncertainty, remaining in the black is a great achievement.”

In fact, IATA data shows that passenger traffic grew by 6.4 per cent over the first seven months of the year. Latin America (9.7 per cent), followed by the Middle East (8.3 per cent) and Europe (7.2 per cent) are projected to see the biggest increases in passenger traffic in 2011.

This is expected to tail off by 2012, except in the case of Asia-Pacific and Africa, where higher than average capacity growth, alongside an extension of networks, are predicted to keep the airline markets in these regions humming along.

However, there are signs on the horizon that this may only be a fleeting respite, with cloudy skies expected in 2012.

IATA forewarned that operating conditions for the global airline industry were becoming increasingly sombre. Margins remain anaemic, reaching a paltry 1.2 per cent of turnover in the first half of the year. This figure is projected to decline to 0.8 per cent in 2012, with net profits expected to dip by nearly 30 per cent year-on-year to US$4.9 billion.

Europe is the main concern for IATA, due to the uncertainty caused by its unfolding debt crisis, and the ensuing global economic repercussions it poses. The region is forecast to see its profit shrink the fastest worldwide between 2011 and 2012 – from US$1.5 billion to just US$0.3 billion.

Brian Pearce, IATA’s chief economist said that even though airline markets were holding up at the moment, the path ahead was sure to be a turbulent one. “Essentially, the weakness we were predicting before (in the June forecast) has been shifted to 2012, because the main area of risk is still likely coming from the situation in Europe,” he said.

“Not many people know how it is going to play out. If a good resolution is reached, business and consumer confidence should come back.”

UKRAINIAN flag carrier AerosSvit Airlines will be launching thrice-weekly direct services between Kiev and Colombo from October 22, according to Johann Wijesinghe, director at Hayleys Leisure Holdings, the airline’s GSA in Sri Lanka.

Wijesinghe told TTG Asia e-Daily that AerosSvit would operate a Boeing 767-300ER aircraft on the route, configured with 24 business-class and 207 economy-class seats.

Ukraine’s other flag carrier, Ukraine International Airlines, started the first flights between Ukraine and Sri Lanka last December, offering twice-weekly services between Kiev and Colombo, via Abu Dhabi, using a Boeing 737-800 aircraft.

Some 25,850 travellers from Eastern Europe, including Russia and Ukraine, visited Sri Lanka in the first eight months of 2011, up 25 per cent over the same period last year.

THE RECENTLY opened 478-unit Swiss-Garden Residences Kuala Lumpur has registered an average occupancy rate of 90 per cent for its first quarter as of end-July.

The robust figure seemingly validates Swiss-Garden International Hotels, Resorts & Inns’ decision to venture into the serviced residences segment in April (TTG Asia e-Daily, July 21).

Swiss-Garden Hotel & Residences Kuala Lumpur group general manager central region, Rayan Komatt, said: “There is an increasing demand (for serviced residences) from both leisure and business travellers. Leisure travellers now opt for accommodation that provides spacious homely comfort, while business travellers seek space, privacy and modern facilities, yet complemented with hotel services.”

“We are optimistic that the trend will continue to grow,” he added.

Another reason cited by Komatt for the strong response was the property’s location in the heart of Kuala Lumpur, close to prime tourist attractions and shopping areas.

Built at a cost of RM330 million (US$111 million), Swiss-Garden Residences Kuala Lumpur offers one- and two-bedroom apartments, as well as a penthouse. Room rates start from RM298 per day to RM5,600 a month. The property also has more than 1,000m2 of convention space, including a ballroom and seven meeting rooms.

Swiss-Garden’s expansion plans for this segment are already underway.

“Swiss-Garden International will be adding three more properties to its current portfolio, namely the Swiss Garden Hotel & Residences in Butterworth, Penang, Swiss-Garden Hotel & Residences Cameron Highlands, and Swiss-Garden Hotel & Residences Malacca within the next two years,” said Komatt.

“The group’s room inventory is expected to increase by approximately 90 per cent.”

By N. Nithiyananthan

INDONESIA’S overseas tourism marketing representatives want regional tourism offices in the country to be more proactive in promoting its new products and destinations.

According to feedback from Visit Indonesia Tourist Officers (VITO) from 10 countries who attended a recent Indonesia Ministry of Culture and Tourism marketing workshop, tour operators in their respective markets were of the opinion that current initiatives to raise awareness and product knowledge were insufficient.

“The tour operators have been asking what is new in Indonesia,” said VITO country manager for the Netherlands, Susan van Egmond. “They have also been asking when the Sumatara fam trip (originally scheduled for last year following Garuda Indonesia’s inaugural service to Amsterdam) will materialise.”

VITO Malaysia manager Mohd Shafie Obet said: “Bandung has been doing very well, so we would like the regional tourist office in West Java to send us more information on places like Garut and Tasikmalaya.

He added: “Riau Islands is (our) closest neighbour, but the potential has not been optimised. I invite the regional government to inform us of events in Batam a few months before the dates for us to promote in Malaysia.”

The Indonesia tourism ministry’s director general of destination development, Firmansyah Rahim, said there were currently two major programmes in place to facilitate communication on new products and destinations.

“The first one is to develop a travel planner for Indonesia. We are collecting travel planners from the regions, with the emphasis on new products,” he said.

“We are also doing destination management organisation programme in 15 destinations such as Sabang, Raja Ampat, Jakarta Old Town, Toraja and Rinjani. This is basically integrated destination management, bottom up, putting forward stakeholders’ ownership.”

KC RESORT and Over Water Villas Koh Samui is seeing a surge in arrivals from mainland China, Hong Kong and Taiwan.

The resort’s Chinese clientele has jumped from 20th to fifth position on its list of top source markets – after Australia, South Korea, Germany and the UK – in less than a year.

KC Hotels and Resorts area general manager, Andreas Kraemer, attributed the rise to the appointment of a Hong Kong sales representative last November, as well as direct Hong Kong-Samui flights, which he says have helped to boost short-term bookings.

Kraemer is hoping the Chinese market will become the resort’s second- or third-largest contributor by year-end, but remains confident that the Australia market will remain in top spot.

Opened in January 2008, the 95-key property has been attracting a steady stream of mainly leisure travellers, with more than 50 per cent coming from the Australian, South Korean and German wedding and honeymoon segments.

Meanwhile, KC Hotels and Resorts has set its sights on developing the Middle East source market and will appoint a sales representative in Tel Aviv, said Kramer. The group’s other sales representative offices are in London and Melbourne.

The group is also scheduled to open its second property in Koh Samui, the 45-key KC Beach Resort and Pool Villas, in February next year, and will take over an existing boutique property in Phuket about six months later.

By Sirima Eamtako

MYANMAR’s iconic Shwedagon Pagoda is on track to welcome a record number of foreign visitors this year, bypassing the all-time high set just last year.

According to the pagoda’s board of trustees, 136,579 overseas visitors visited the historic site in Yangon between January and August 2011, a 40 per cent year-on-year increase.

The figure is generally considered an indicator of the health of Myanmar tourism, as the majority of foreign tourists visit the pagoda at least once during their stay.

Last year, there were 175,054 foreign visitors to the attraction, a 54.2 per cent year-on-year increase, beating the previous high of 151,262 in 2006 (TTG Asia e-Daily, December 14, 2010).

According to a pagoda spokesperson, the majority of overseas visitors this year were from Thailand, China, Malaysia, South Korea and Spain.

SINGAPORE Airlines (SIA) will be deploying the Airbus A380 aircraft on its daily flights linking Singapore to Frankfurt and New York (JFK) from January 15, bringing to an end its last longhaul one-stop service operated with the aging B747-400s.

The higher density version of the A380 with 471 seats will be utilised on the route, injecting 25.5 per cent more capacity (20 per cent and 27 per cent increases in business- and economy-class, respectively). There are also 12 suites on board the A380, compared to 12 first-class seats on the B747.

The additional business-class capacity on SIA services between Singapore and New York is not expected to affect its daily non-stop Singapore-New York (Newark) flights, but will instead allow the Singapore flag carrier to offer a homogenous business-class product between Singapore and New York.

New York will be SIA’s second North American destination after Los Angeles to be served by the A380, while Frankfurt will be its fourth A380 destination in Europe.

CENTARA Hotels and Resorts will be ending its 25-year partnership with Accor in Thailand next January, and will be extracting its three properties in the Thai capital from the Accor network.

Centara is expected to make an announcement today regarding the futures of Sofitel Centara Grand Bangkok, Sofitel Centara Grand Resort & Villas Hua Hin, and Novotel Hat Yai Centara.

With the impending exit of the two Sofitel-branded properties, Accor is scheduled to open next year the 345-room Sofitel Bangkok Sukhumvit and 238-room Sofitel So Bangkok.

Centara Hotels and Resorts chairman, Suthikiati Chirathiwat, said: “Sofitel has been an important milestone of Centara’s development, sharing vision and driving towards the success.”

“It has been a rewarding journey and there might be other opportunities to re-establish this partnership,” he added.

Sofitel Asia Pacific senior vice-president, Markland Blaiklock, said Sofitel was grateful for the close collaborative relationship with Centara over the past 25 years.

“This will continue through to the conclusion of the agreements and may be followed with other collaborations in the future, which would be most welcome,” he said.