THE screech of drills fills the maintenance hangar of budget carrier Air Philippines, where one of its eight Boeing 737-200s is having an engine and airframe check.

From his office near the hangar, Captain Ed Medina, the airline's president, flips open his ringing mobile phone. A grunt of approval and a quick "thanks" ends the call.

"Good news, we were overbooked for Ozamiz city," he said.

Commercial aircraft stopped landing at this old harbour town in the southern Philippines in 1995.

Earlier this year, Air Philippines - owned by Philippine Airlines' (PAL) majority shareholder Lucio Tan - revived the route.

"All the major airlines are enjoying high passenger loads," said Capt Medina, explaining how cut-price fares are driving an unprecedented boom in budget air travel.

Book well ahead and airfares here are now barely more expensive than taking a slow inter-island ferry.

In the year to June, low-cost carrier Cebu Pacific saw its passenger load rise 89 per cent on the previous 12 months. The airline flies to 20 domestic and 10 overseas destinations in the region.

To celebrate flying more passengers than PAL on domestic routes for the first time - albeit by a nose cone - this no-frills airline recently sold 100,000 seats on domestic routes for one peso. That is about three Singapore cents.

On average, fares are a third lower than PAL's, said Cebu Pacific's vice-president for marketing, Ms Candice Iyog.

"We can do that by high passenger loads and operating efficiently. Nothing is sacrificed on the safety side."
Both budget airlines and a clutch of small carriers took to the skies in the mid-to-late 1990s in mostly ageing aircraft after the government opened up a poorly serviced domestic aviation market.

They got off to a turbulent start. Over a period of two years, three crashes raised questions over training and safety standards, giving the Philippines a reputation as one of the dodgier places to take a domestic flight with budget or small airlines.

The two worst involved Air Philippines and Cebu Pacific. And both crashes, as one pilot said, were 'wake-up calls' for the country's low-cost carriers.

On Feb 2, 1998, an ageing Cebu Pacific DC-9 bound for the southern city of Cagayan d'Oro slammed into a mountainside, killing all 104 passengers and crew. It was the first jetliner crash in the Philippines in 11 years.

In the country's worst air disaster, a landing Air Philippines Boeing 737-200 crashed into an island a few kilometres from Davao International Airport, killing all 131 aboard on April 19, 2000.

Two years earlier, Air Philippines' operating permit had reportedly been temporarily suspended because of lapses in safety and maintenance.

Since 2000, there have been no jetliner crashes here.

"That is not luck but the way the industry developed," said Capt Medina. "It is now well controlled, well monitored and adheres to the highest safety standards."

The United States' Federal Aviation Administration (FAA) ranks the Philippines among those countries in full compliance with the air safety standards of the International Civil Aviation Organisation, an agency of the United Nations.

An official of the Philippine government's Air Transport Office said it oversees the regular maintenance checks on commercial aircraft prescribed by the manufacturers, and does spot checks. Air Philippines had two so far this year.

Pilots, meanwhile, must do flight simulator and written tests every six months.

Air Philippines says it has not had a serious safety incident over the past five years.

Cebu Pacific had one: The landing gear on a DC-9 malfunctioned on an approach to Zamboanga airport on May 3 last year. According to reports, crew members had to rush to the belly of the aircraft to manually lower the wheels. DC-9s have since been phased out of its fleet.

A Filipino pilot who has spent the last 15 years on international routes said of the budget carriers: "The feeling in the aviation community is that they are now above board on training and maintenance."

For this pilot, who asked not to be named, the short runways of many of the country's underfunded domestic airport systems are a point of concern.

"We still have 'captain's runways' where only the captain may land the aircraft. Short runways don't make for soft landings," he said.

Lack of funds is blamed, though upgrading the country's provincial airports - and this includes lengthening runways to accommodate bigger jets - is part of a government plan to improve infrastructure in the countryside.

The low-cost carriers that survived an early industry shakeout are now aggressively expanding routes and refleeting, replacing ageing aircraft with safer and more fuel-efficient jets.

The average age of Cebu Pacific's fleet is now 1.5 years old, making it one of the youngest in Asia. In a $1 billion refleeting programme completed in March, it replaced its DC-9 and Boeing 757-200 jets with 14 new Airbus A320s. Twenty more have been ordered.

Its jets are now maintained by Singapore Engineering Co, a subsidiary of Singapore Airlines. And the company, owned by the JG Summit conglomerate, recently invested in a $20 million flight simulator for Airbus A320 aircraft.

"At the end of 2005, we were flying to two international routes, Seoul and Hong Kong," said Cebu Pacific's young president, Mr Lance Gokongwei. "We have now grown to 10 and are expanding, with our international business growing faster than the domestic side. And we want to double in size by 2011."

Air Philippines' eight Boeing 737-200s are getting on, averaging 20 years. Under its refleeting plan, they will be replaced later this year with newer 737-300 jets, all but one leased. Then the entire fleet is scheduled to move to new Airbus A320s in 2009.

"For us, it's a matter of replacing our gas guzzlers," said Capt Medina, noting that the carrier originally budgeted for an average oil price of US$52 (S$75) this year.

As things stand, of course, oil looks as if it will soon clip US$100 a barrel.

mcindoea@sph.com.sg

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