In our Editorial on October 16 2012 we reported that our premier, McKeeva Bush, is touting Southeast Asia’s largest publicly listed food, beverage, and packaging company San Miguel Corporation (SMC) of the Philippines for business opportunities.

Mr. Bush met with executives of SMC whilst on his trip to Tokyo for the Commonwealth Finance Ministers conference.

Bush said, “We are looking forward to working together and capitalising on the synergies of both SMC and the Cayman Islands. This joint cooperation underscores our commitment to study and work with projects that will be mutually beneficial to both parties. This combined effort will help us realise the objectives that we have set for our islands, to bring in more investments, breathe life into our existing industries and make the Cayman Islands the choice destination for the region. We are happy that SMC, the Philippines largest conglomerate, has chosen us to be a potential strategic partner for its international expansion.”

Mr Ramon S Ang, SMC President and Chief Operations Officer reply to the premier said, “This is a historic moment for both San Miguel Corporation and the Cayman Islands as represented by Hon Mckeeva Bush, and offers countless opportunities for our company to become a potent force in developing the economy of the Cayman Islands through potential investments. We hope that this understanding translates into a fruitful cooperation.”

Founded in 1890 as a brewery, the company has over 120 facilities in the Philippines, Southeast Asia, China, and Australia. SMC has a very diversified range of product consisting of beer products, juice and juice drinks, canned meat products, dairy products, wines and liquor products, meats (processed and semi-processed), poultry meats, and jelly snacks among others. They are also in the export business since 1988. They are also the majority shareholder in Philippines Airlines that has been blacklisted by the European Union for safety problems – see stories below.

We questioned what investment opportunities there could be for SMC in the Cayman Islands? Now we learn that Bush has signed a Memorandum of Understanding (MOU) with SMC with no details of what the deal is.

However, CNS have reported it involves investment in Cayman Airways Limited and could involve efforts by the Cayman government to assist the firm’s airline to expand its flights into the United States.

Curious considering the blacklisting of Philippines Airlines and US safety standards are at least as stringent as the EU’s.

Then we learn on Thursday (1) SMC are testing the waters for a share sale to raise US$400M by the end of this month.

As Alice in Wonderland said, “curiouser and curiouser.”

San Miguel Corp : San Miguel Pure Foods Begins Premarketing for up to US$400 Million Share Sale -Sources

11/01/2012| 03:15am US/Eastern

By P.R. Venkat

San Miguel Pure Foods Co. (PF.PH), which is run by Philippine billionaire Ramon Ang, has started testing investor appetite for a share sale that could raise up to US$400 million by the end of November, people with knowledge of the deal said Thursday.

Mr. Ang is the president and chief operating officer of San Miguel Corp. (>> San Miguel Corp), one of the Philippines’ largest conglomerates, which owns a majority stake in Pure Foods.

Pure Foods, a maker of ice cream, cakes and porkshanks, is selling shares to raise its public float from less than 1% to comply with a new stock exchange rule requiring a minimum 10% public float by Jan. 1.

One of the people close to the transaction said that investor appetite for the share sale will be strong as investors increasingly look toward the expanding middle class and fast-growing Philippine economy for opportunities. That person said that Pure Foods is aiming for an eventual public float of between 20% and 25%, and hopes to wrap up the sale by the end of this month.

The company plans to start taking orders from institutional and retail investors from the week of Nov. 12, the person said.

Domestic expenditure by Philippine households in the second quarter was about US$46.85 billion dollars, of which nearly 42% was spent on food and non-alcoholic beverages, according to the National Accounts of The Philippines.

The Philippines has also been one of the best performing markets in Asia this year, on the back of solid economic growth of 6.1% for the first half of this year. In Asia, the Philippines Stock Exchange Index has risen 24.1% so far this year, only second to Thailand’s 26.8% growth.

Earlier this year, the Philippine Stock Exchange said that listed companies that didn’t comply with the 10% minimum public float could be delisted. Delisted companies have to wait five years before reapplying to trade on the exchange again.

Malayan Banking Bhd., Standard Chartered PLC and UBS AG are advising San Miguel Pure Foods on the deal.

For more on this story go to:

http://www.4-traders.com/SAN-MIGUEL-CORP-10879028/news/San-Miguel-Corp-San-Miguel-Pure-Foods-Begins-Premarketing-for-up-to-US$400-Million-Share-Sale-Sou-15449091/

Philippine carriers and Iran Air feature on latest EU blacklist

30 March 2010

By:   DAVID KAMINSKI-MORROW LONDON

Safety authorities have banned all carriers from the Philippines and Sudan from operating to the European Union, and have also place restrictions on Iran Air.

But the European Commission has confirmed that limitations on North Korean state operator Air Koryo will be eased.

In the latest revision to its airline ‘blacklist’ the Commission has imposed a blanket ban on the Philippines, a decision which blocks long-haul services into Europe by flag-carrier Philippine Airlines.

While the Commission has acknowledged efforts by Philippine Airlines and another carrier, Cebu Pacific, to ensure safe operations, it says it must “follow the principle of precaution” given safety concerns related to the country’s authorities.

“We are ready to support countries that need to build up technical and administrative capacity to guarantee the necessary standards in civil aviation,” says new European transport commissioner Siim Kallas, adding that local authorities have been trying to reform the Philippines’ civil aviation system.

“But we cannot accept that airlines fly into the European Union if they do not fully comply with international safety standards.”

Sudan has similarly received a complete air transport ban, owing to “persistent non-compliance” with such standards.

Ramp checks on Iran Air – which has been subject to US Government sanctions – have turned up evidence of “insufficient oversight” over the past year, says the Commission.

But Iran Air will still be permitted to operate 18 Airbus A300/310s, nine Boeing 747s, six Airbus A320s and a single Boeing 737 into Europe.

The Commission says it will send representatives to Iran over the next few months to examine the situation with Iran Air.

While North Korea’s Air Koryo has been banned since 2006, the delivery of two Tupolev Tu-204s has resulted in this long-term restriction being eased – although the remainder of its fleet remains barred.

Angolan flag-carrier TAAG has also been granted freedom to perform a greater range of European services, although it is still only permitted to use its Boeing 777 and 737-700 aircraft.

For more: http://www.flightglobal.com/news/articles/philippine-carriers-and-iran-air-feature-on-latest-eu-blacklist-340101/

PAL statement on European Union (EU) issue

31 March 2010

Philippine Airlines is gravely concerned over the recent decision of the European Commission (EC) banning all Philippine carriers from operating in member-states of the European Union (EU). 
  
Despite the unfortunate inclusion of PAL and all other local carriers in the EC blacklist – which is a direct consequence of the downgrade of the Philippine government’s aviation safety rating – PAL would like to assure the riding public that safety remains the bedrock of PAL’s operations. It has always been the flag carrier’s policy to ensure that its passengers fly with the full assurance of safety and comfort. 
  
PAL laments that the EC decision came about notwithstanding PAL’s safety record, as borne out by its compliance with internationally accepted safety standards, including the IATA Operational Safety Audit (IOSA) and audits by major foreign aviation regulatory authorities. For four consecutive years since 2006, PAL is the only IOSA-certified Philippine carrier.

Two recent events led to the inclusion of Philippine carriers in the EC ban, namely:  1) the U.S. Federal Aviation Administration’s (FAA) decision in January 2008 downgrading the Philippines’ safety rating to Category 2;  and 2) the “significant safety concern” findings by the International Civil Aviation Organization (ICAO) in November 2009 against Philippine aviation safety regulators. 
  
But despite the Philippines’ Category 2 rating, it must be noted that the U.S. FAA continues to allow PAL to operate up to 33 regular weekly flights from the Philippines to Los Angeles, San Francisco, Honolulu, Las Vegas and Guam. PAL safely flies thousands of passengers, including U.S. citizens, across the Pacific Ocean on a regular and reliable basis in compliance with stringent U.S. safety regulations.

PAL welcomes the EC air safety committee’s decision to visit the Philippines so that aside from Philippine aviation regulators, it can also inspect and audit local carriers. PAL is prepared for such audit and is confident that EC inspectors will find a picture of PAL as a world-class carrier of uncompromising professionalism and efficiency.

PAL is also ready and willing to lend a hand to the CAAP especially its new Director General Alfonso Cusi, as the agency strives to professionalize its ranks and regain its international safety rating. 
  
Since 2006, PAL has been in compliance with IOSA. The IOSA program, which is ISO 9001:2000 certified, is a rigorous audit focusing on the entire operational management and control systems of an airline in promoting safety, based on internationally recognized standards and supported by a strict quality assurance process. 
  
These IOSA standards are derived from relevant ICAO guidelines, in particular, Annexes 1, 6 and 8, as well as from the regulations of the U.S. FAA and the Joint Aviation Authorities of Europe (JAA), as well as industry best practices. Moreover, regular maintenance of the PAL fleet is undertaken by Lufthansa Technik Philippines, a subsidiary of Lufthansa Technik AG of Germany, the world’s leading provider of maintenance, repair and overhaul services for commercial aircraft, engines and components. 
  
As an added assurance, PAL’s internal Safety Management System is comprised of the following elements:

• Safety Policy and Objectives spells out PAL management’s commitment to safety and the continuous improvement of the system;
• Safety Risk Management outlines how hazards and their underlying risks are  identified through the use of simple to sophisticated tools, and where measures are formulated to mitigate these risks;
• Safety Assurance outlines how quality- and safety-assurance methods such as  audits and inspections  are regularly conducted to verify compliance to standards and regulations; and

Safety Promotion outlines how safety is inculcated in the minds of all PAL staff from the day they are hired until their retirement.

End

Clive Irving on April 11 2012 in The Daily Traveller wrote:

Airlines Banned in EU: Who Is Checking If Your Airline is Safe?

Even though the crash of a Russian airliner in Siberia last week continues a pattern of disasters in that country involving aging airplanes, poor maintenance, and sloppy regulation, there are other parts of the world where boarding a flight is more risky.

For example, the Philippines and Africa.

The European Union has just updated its blacklist of airlines and continues a blanket ban on all carriers from the Philippines. It also lists scores of African airlines, where the worst record is held by the Republic of Congo.

However, these two black spots send very different messages about what is wrong.

In Africa, a combination of political corruption, civil wars, numerous rogue carriers, airplanes at the end of their life cycles, and no continent-wide safety culture means that there won’t be improvements any time soon.

The Philippines, on the other hand, shows what happens when a potentially rich market is opened up to carriers following western budget-airline business models without the infrastructure to support them.

You end up with a kind of Potemkin Village on the runway: new airplanes, splashy logos, and snappily dressed flight attendants masking serious deficiencies like negligent regulators and an acute shortage of experienced pilots.

And worse: aircrew taking drugs. In February, a pilot of Lion Air, a major Indonesian carrier, was arrested for possession of crystal meth; in the past eight months, three other Lion Air pilots have been arrested on drugs charges, and a flight attendant who went public with charges of pilots regularly taking drugs said she received death threats.

Although Lion Air is on the European blacklist, another major Indonesian carrier, Garuda, has met the European standards—having been forced, after a series of crashes, to pass a rigorous review.

There is clearly an urgent need for a worldwide standard to determine when an airline should be banned for safety reasons.

The two most rigorous regulators, the European Union and the FAA in the U.S., use very different methods. Europe bans airlines, the U.S. bans countries.

But they share no common or consistent standard.

For example, while Europe has the total ban on the Philippines, the FAA allows Philippine Airlines (PAL) to fly into the U.S. but remains skeptical of efforts made by the Civil Aviation Authority of the Philippines to clean up its act. Carriers from the Philippines are under the FAA’s Category 2 watch, which means that they can fly existing routes into the U.S. but not add either routes or change to larger airplanes and are subject to heightened surveillance.

The latest European blacklist, meanwhile, for the first time includes the Venezuelan airline Conviasa, cited for a record of accidents and safety issues raised after checks of the airplanes made at European airport.

And in an unusual step, Libya, where the airline infrastructure has yet to recover from the civil war, has agreed with European regulators not to resume flying into European airports until at least late November. Technically, this is not a ban and, in any case, Libyan Airlines seems able to circumvent this agreement by leasing an airplane from a European carrier—complete with a crew and including maintenance resources—and fly to London, Vienna, Athens, and Rome.

What should the concerned traveler take away from this far from perfect system?

As long as you book a flight on an airline operating out of the U.S., you can be sure it has passed an FAA safety audit. But if that flight connects to an airline not operating in the U.S., you will need to check the far more extensive blacklist published by the Europeans. Even then, the E.U. only has power to ban airlines flying into European air space, which leaves hundreds of airlines that are not caught in either of these two safety regimes.

So what we have here is a global business without effective global oversight. One body that is supposed to be global in its powers, the International Civil Aviation Organization, ICAO, like other United Nations agencies, is hidebound by bureaucracy and international political sensitivities.

In contrast, the European Union’s blacklist reflects a political culture that is aggressive (and, many would argue, too intrusive) on all consumer-protection issues to a degree that would be impossible in the U.S. And in the U.S. the FAA’s technical staff, no matter how skilled and dedicated, are limited in their powers by political appointees who are notoriously susceptible to industry pressures.

For more on this story go to:

http://www.cntraveler.com/daily-traveler/2012/04/who-is-checking-if-your-airline-is-safe-europe-airline-blacklist-041012

PAL eyes flights to Heathrow

May 27^th, 2012 MANILA, Philippines—San Miguel Corp.-led flag carrier Philippine Airlines (PAL) is considering flights to London’s Heathrow airport once the country’s carriers are finally allowed to fly back to European Union member states.

Transportation and Communications Secretary Mar Roxas said the country’s oldest airline could have flights to the United Kingdom as part of its route expansion.

“Yes, PAL can fly to Heathrow because there are still unused frequencies,” Roxas said in an interview.

Roxas said the matter was discussed with the Lord Mayor of London Alderman David Wootton, who was in Manila for a visit last week.

There are currently no direct flights between any point in Europe and the Philippines. Earlier this year, Air France/KLM stopped its direct service between Manila and Amsterdam after complaining about high airline taxes that targeted foreign carriers with long-haul flights out of the country.

The Amsterdam service is now served out of Manila via Hong Kong.

Shortly after announcing San Miguel’s acquisition of a controlling stake in PAL, the conglomerate’s president and chief operating officer, Ramon S. Ang, said one of the top priorities in bringing the airline back to profitability was the expansion of its fleet and route.

He said the company would restore flights to Europe and expand its operations in the United States as a way to offset what the company has lost in domestic market share to budget carriers.

Ang said PAL would invest $1 billion for the acquisition of 100 new planes as it adds new routes. However, flights to the US would not be possible until the Philippines gets back its Category 1 status with the US Federal Aviation Administration (FAA).

The country is currently on a blacklist of countries whose carriers are banned from flying to European Union member states.

Amid high fuel prices, PAL’s direct parent firm, PAL Holdings, posted a total comprehensive loss for the nine months of its fiscal year ending Dec. 31, 2011, of P3.6 billion, as passenger and cargo revenues declined 13 percent.—Paolo G. Montecillo

For more on this story go to: