April 13, 2014

US FAA upgrades Phils rating to Category 1

The US Federal Aviation Administration has reportedly upgraded the Philippines’ civil aviation status to Category 1 after finding the country to be compliant with international safety standards set by the International Civil Aviation Organization. The country has been under Category 2 since January 2008. With the upgrade, Philippine carriers can now fly more frequently to more destinations in the US. Meanwhile, the European Union has also allowed Cebu Air Inc (CEB) to fly to the continent.

Our take: Aside from expanding business opportunities for Philippine airline companies, the upgrade also bodes well for the country’s tourism industry and should benefit companies with exposures to the sector. These include the gaming companies Travellers International (RWM), Bloomberry Resorts Corp (BLOOM and Melco Crown Phils (MCP) as well as property and holding firms with tourism-related businesses such as Ayala Land Inc (ALI), SM Prime Holdings Inc (SMPH), Alliance Global Group (AGI) and Global Estate Resorts Inc (GERI). – WealthSec