Naia rehab execs vow first upgrades by Christmas

At the stroke of midnight on Friday, New Naia Infrastructure Corp. (NNIC), took over the operation and maintenance of Ninoy Aquino International Airport (Naia) as the consortium led by San Miguel Corp. (SMC) begins a 15-year project to transform the country’s premier gateway into a world-class airport.

The handover documents from the Department of Transportation (DOTr) were signed in simple ceremonies by Transportation Undersecretary for Legal Affairs Reinier Yebra, Transportation Undersecretary for Aviation and Airports Roberto Lim, Manila International Airport Authority (Miaa) general manager Eric Jose Ines, SMC and NNIC chair Ramon Ang, and NNIC general manager Lito Alvarez.

First impression

Transport Secretary Jaime Bautista expressed his support to NNIC and said that “a world-class Naia will strengthen the entire Philippine transportation system while catalyzing tourism and economic growth,” according to Lim.

Ang was thankful and excited that the multibillion-peso public-private partnership project would modernize Naia to make it an “investment in our country’s future.”

“A world-class airport means more jobs, more tourists, and a stronger and more prosperous Philippines,” Ang said. “Naia is the first place travelers get of our country and we want the world to see its beauty and the incredible potential of the Filipino people.”

The new airport management promised “significant improvements” as early as this year’s Christmas season.

Lim said that the high public expectation on the airport’s operations and systems enhancements “should translate to improved passenger experience and transform Naia into a regional hub.”

He said President Marcos and Bautista hailed the significance of the project and “hope to undertake more transport infrastructures in collaboration with the private sector.”

P144B investment

“This day exudes of optimism and high hopes for a modern, safe, and comfortable airport for its citizens and visitors,” Lim said.

NNIC, formerly SMC SAP and Co. Consortium, won the P170.6-billion concession agreement to operate, maintain and upgrade Naia in February.

The consortium—composed of San Miguel Holdings Corp., RMM Asian Logistics Inc., RLV Aviation Development Inc. and Incheon International Airport Corp.—would invest up to P144 billion for the project.

It won the contract for the project after proposing to allocate 82.1 percent of Naia’s revenues to the government, beating two other bidders which proposed revenue shares of only 33.3 percent and 25.9 percent.

Commitment

The government is eyeing up to a trillion pesos in revenues from the project, whose term is 15 years, which could be extended for another 10 years. Aside from the revenue shares, NNIC is also required to remit an upfront payment of P30 billion and P2 billion annually to the government.

“Today, we celebrate the competitive spirit of the winning consortium, which brings financial muscle, management expertise, and the technical operations strength and experience of Incheon Airport,” Lim said.

Alvarez said travelers would be seeing improvements in the airport toward the end of the year.

“This project will take time and commitment, but we will do it right, no shortcuts,” he said.

“While minimizing the distractions, improvements will begin immediately in tangible changes that passengers will feel by Christmas. That’s the commitment of our chairman, by Christmas you will see significant improvements,” Alvarez said.

In 2023, passenger volume at Naia reached 45.3 million, 47 percent more than in the previous year, making it the country’s busiest airport. Congestion has been blamed as the principal source of the airport’s problems, such as flight delays, neglected facilities, inefficiency, mismanagement and even corruption.

Blackouts, bedbugs

The image of the airport—and the country—has been affected by blackouts, faulty air-conditioning and failing navigation systems, sometimes during holidays; confusing airline terminal assignments; corrupt security and immigration officers; and recently reported infestation of seats by bedbugs.

From time to time, several international surveys by travel websites also placed the airport in a bad light. In February, Naia was named the fourth worst airport in Asia for business travelers by the website businessfinancing.co.uk. In August last year, the airport was the eighth worst in Asia based on passenger queueing time, according to casago.com. In November 2022, Naia was tagged as the third most stressful airport in Asia by hawaiianislands.com.

Passenger volume rise

According to the DOTr, once the airport’s modernization is completed, its capacity will increase from 35 million to 62 million passengers with an uptick in air traffic movement from 40 to 48 per hour. There would also be improved service quality levels in compliance with International Civil Aviation Organization standards, it said.

The rehabilitation works are expected to generate at least 58,000 jobs for Filipinos.

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Other improvements expected are aircraft parking bays, increase in vehicular parking spaces, installation of world-class systems and technology, more food and beverage and retail options and more convenient land transport connectivity, among others.

Earlier this month, NNIC laid out plans to reassign the airport terminals to improve the efficiency of runway use, allowing the airport to accommodate more flights.

According to its proposal, Terminal 1 will be used exclusively by flag carrier Philippine Airlines (PAL) for its international flights. Terminal 2 will only service domestic flights. All the foreign airlines will operate from Terminal 3, which will also serve the international flights of Cebu Pacific and AirAsia Philippines.

Domestic flights of Cebu Pacific will be moved to Terminal 2 to join PAL’s, while AirAsia domestic flights will be moved to Terminal 4.

Short-term plans include power redundancy; repair of walkalators, escalators and elevators; upgrading of X-ray machines; and road expansion to the terminal.

Within the first three to 12 months of the consortium’s takeover, NNIC will install new toilets and refurbish existing comfort rooms; add seating capacity; install more air-conditioning units; and enable reliable high-speed internet.

Off-ramp connection

Last month, Ang said that they would also build an off-ramp connection between Naia Expressway and Terminal 3, which is eyed to be completed next year. The project is estimated to cost P3 billion to P5 billion.

Alvarez had said that they were set to fulfill their goal of increasing annual terminal capacity to 62 million within four to five years.

The Miaa, a state-owned corporation created in 1982, will remain the regulatory body of Naia.

Opening in 1948 as the Manila International Airport, the international gateway was renamed in 1987 after the opposition politician Benigno “Ninoy” Aquino Jr., who was assassinated at the tarmac in 1983 on his return from self-exile in the United States to challenge dictator Ferdinand Marcos. —WITH A REPORT FROM INQUIRER RESEARCH INQ