PAL Holdings reported that it has “started and ceased” commercial operations of its 98.92 percent-owned Mabuhay Maritime Express Transport Inc. (MMET) last year.
The company booked P773.7 million in impairment loss in 2019 – P539.49 million for vessels and P234.21 million for terminals under construction.
The project, a brain child of Tan’s son-in-law and PAL Holdings director Joseph Chua, sounded like a good idea when Tan launched it in 2018.
PAL Holdings bought two, 410-seater trimaran vessels and built a ferry port terminal in Tan’s 120-hectare reclamation project in Aklan as part of the airline’s strategy to “seamlessly” transfer tourists arriving from the Kalibo International Airport on their way to Boracay Island.
The Kalibo-Boracay sea route takes 1.5 hours, 40 percent less than the traditional bus route of 2.5 hours.
The project was launched in October 2018, or just a few days after Boracay was reopened to tourists after a six-month closure for rehabilitation.
PAL wanted to maximize its bigger body planes that land in Kalibo and could carry more tourists from China, South Korea and Japan.
But tourists still preferred to go to Boracay through the Caticlan airport terminal of San Miguel Corp. because it was cheaper and more convenient (a 10-minute, scenic boat ride to Boracay).
Apparently, PAL misread the market as it believed there were enough travelers willing to pay an extra P1,500 to P2,500 for the “premium, luxury” boat transfer service.