27 January 2010

SBMA mulls Subic airport as logistics hub

Subic Bay Metropolitan Authority (SBMA) mulls the conversion of its airport facility to boost its logistics area after admitting it better give up the business to the more competitive Clark freeport, which is being groomed as the country’s next international airport.

SBMA administrator Armand C. Arreza said the Freeport currently pays P250 million in debt service annually and P80 million for maintenance.

“We need between 12 to 15 flights a day to break even,” Arreza said.

“With the departure of FedEx, Subic is left with no user at all and source of revenue. How can we sustain that?” Arreza said.

On the other hand, Arreza said that Clark offers free parking and landing fees to the budget airlines operating in the former American Airfield.

FedEx left Subic as its Asia Pacific hub in February 2009 to a more profitable Guangzhuo, China.

“We are still studying its conversion, but we also want Subic to a subsidiary airport to Clark,” he said.

The airport, he said could be converted into a logistics hub noting that they have not enough space for the logistics firms operating in the Freeport.

Earlier, however, SBMA was in talks with several groups that could replace the slot left by FedEx, which has finally closed its Asia Pacific hub in Subic Freeport as it transfers to a more profitable new hub in Guangzhou, China leaving 500 workers jobless.

“We’re in talks with several groups but no immediate replacement,” said SBMA administrator Armand C. Arreza the day after FedEx pulled out its last plane in Subic after operating its Asia Pacific hub in the former U.S. military base for the past 16 years.

Arreza, however, refused to elaborate except to say that negotiations for possible replacement of FedEx are ongoing.

Last year, SBMA forged an agreement with UK-based Stratospheric Airship Technologies (SAT), which has committed to invest $ 500 million for aircraft manufacturing by taking over the facilities of FedEx.

But SAT official said that SAT is not going to replace the Asia Pacific hub operations of FedEx but rather transform the facility into an aircraft manufacturing hub.

The FedEx hub, which began operations in 1996, earned the Subic Bay authority about 150 million pesos (3.2 million dollars) from landing fees and warehousing in 2008.

About 500 workers were expected to lose jobs. At the peak of its operations in 2004, the FedEx unit in Subic employed about 800 people.

At the time FedEx came into Subic, it was hoped it would lure foreign businesses to Subic and breathe new life into the area after the US closed its military bases in the Philippines in 1992. (Bernie Cahiles-Magkilat, Manila Bulletin)