Boracay bound? Higher airport fee awaits

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The airport operator, a unit of San Miguel, needs to recoup its $300 million investment

MANILA, Philippines – From P20 to P200.

That’s the increase in airport terminal fee travelers bound for Boracay Island have to brace for starting January 2012.

The airport’s private operator, a unit of diversifying conglomerate San Miguel Corp., is hiking the terminal fee to recoup its investment in the infrastructure located in Caticlan town, the jump-off point to Boracay’s world famous powdery white sand beach.

“It’s San Miguel’s call when to implement the terminal fee increase as the airport management is privatized,” Ramon Gutierrez, the chief of Civil Aviation Authority of the Philippines (CAAP) told in a text message.

In June, San Miguel disclosed to the stock exchange that it would invest around $300 million in the next two to three years to modernize the airport.

The work involves the expansion of the terminal to accommodate more passengers. San Miguel expects to increase the terminal’s capacity by 30%.

To accommodate bigger aircrafts with more seating capacity, Trans Aire would also expand the airport’s runway from 950 meters to 2,500 meters and extend the width of the runway from 30 meters to 60 meters.

By December 2013, the San Miguel group expects to complete not only the airport project but also allied businesses, including a budget hotel, a convention center that can seat 25,000 people, and a commercial/retail area.

Tourist arrivals in the pristine island resort of Boracay in Aklan province rose 20% to 779,666 in 2010 from 649,559 in 2009, according to data from the tourism department.

Airport projects

The government has granted the 25-year contract to rehabilitate and operate the Caticlan airport to Trans Aire Development Holdings Corp., a 93%-owned unit of San Miguel Holdings Corp. (SMHC).

SMHC was the conglomerate’s corporate vehicle to acquire a majority interest in Caticlan International Airport Development Corp. (CIADC) from a consortium led by George Yang, the Filipino-Chinese businessman who used to control the Philippine franchise of McDonalds.

San Miguel Corp. has been aggressively diversifying away from its core food and beverage business, and into heavy and high-growth sectors. It now controls or has major stakes in some of the biggest Philippine businesses, including oil refiner and retailer Petron Corp., Meralco, several mining, banking, telecommunications and infrastructure assets.

Specifically for airports, San Miguel had said it is interested to participate in other domestic airports up for privatization, including Puerto Princesa in Palawan, Cagara in the northeastern portion of the island of Mindanao, as well as Bohol and Cebu.

San Miguel executives have also expressed interest in bidding for the country’s major gateways, including Terminal 3 at the Ninoy Aquino International Airport in Manila, as well as the Diosdado Macapagal International Airport in Clark.

The Clark airport is the country’s target as the next main international gateway.

The Philippines is an archipelago of over 7,100 islands. Affordable travel via budget airlines was behind the dramatic rise in air travel to and from different destinations in the country. –

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