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FORMED IN 1941. SCHEDULED & CHARTER, DOMESTIC, REGIONAL, & INTERNATIONAL, PASSENGER & CARGO, JET AIRPLANE SERVICES.
PAL CENTER, LEGASPI STREET, LEGASPI VILLAGE
MAKATI CITY 1229, PHILIPPINES
The Philippines (the Republic of the Philippines) was established in 1898, covers an area of 300,000 sq km, its population is 90 million, its capital city is Manila, and its official languages are Pilipino, Tagalog, and English.
No other place offers as many opportunities for a cheap tropical island retirement. The Philippines imposes minimal qualifications on foreign retirees; essentially, you must show you have a pension, such as Social Security. If it's big city life you want, a decent apartment in Manila can be had for $750 a month.
MAY 1990: ACCDT: (PAL) 737-300 FUEL TANK EXPLOSION AT GATE (FAULTY FLOAT SWITCH) = 8 FATALITIES.
JUNE 1993: PHILIPPINE AIRLINES (PAL) WAS PRIVATIZED IN 1992.
1992 = +$44.5 MILLION (-$0.7 MILLION): +16.1% (RPK) (PASSENGER TRAFFIC), +12.9% PASSENGERS (PAX), +1.7% (FTK) (FREIGHT TRAFFIC).
NEW 737-300 SERVICE TO KAOHSIUNG, 3/WEEK.
AUGUST 1993: $561 MILLION, 6 ORDERS (1995) A340-200'S.
SEPTEMBER 1993: 1 737-300, EX-(DAL), FOR GOVERNMENT (VIP) SERVICE.
NOVEMBER 1993: 2 747-4F6'S (RU051; RU052) DELIVERIES.
JANUARY 1994: LAST 6 MONTHS = +6% PASSENGERS (PAX).
1ST ALL-WOMAN FLIGHT CREW ON F 50 TO CEBU.
DECEMBER 1994: ACCDT: (PAL) 747-200 (EI-BWF) HAD A BOMB EXPLOSION ON ITS FLIGHT TO TOKYO = 1 PASSENGER FATALITY OF 20 (FC)/(CA)/287 PASSENGERS.
FEBRUARY 1995: LUCIO TAN (OWNS 51% PR HOLDINGS = 67% PHILIPPINE AIRLINES (PAL) REPLACES CARLOS DOMINGUEZ, AS CHAIRMAN & CEO.
APRIL 1995: 1 747-4F6, & 2 A300B4-200'S DELIVERIES.
OCTOBER 1995: INTENDS TO ACQUIRE 10 A320'S, 4 A330'S, 4 A340'S, TO REPLACE 747'S, DC-10'S, A300'S, F 50'S FLEETS.
DECEMBER 1995: $7 MILLION CONTRACT TO LUFTHANSA TECHNIK (LTK) (DLH), FOR 87 (CF6-50) ENGINES FOR 747-200'S, & A300B4'S. 1 747-283B (21575) RETURNED TO (GUI). $1.2 BILLION, 8 ORDERS 747-400'S. $1.8 BILLION, 12 A320'S, 8 A330-300'S, 4 A340-300'S ORDERS. $700 MILLION FOR (GE) & (CFM56) ENGINES ORDER.
JANUARY 1996: +1 ORDER 747-400 COMBI (GE) FOR $170 MILLION, 6 TO 7 CARGO PALLETS, 266 PAX, 3 CLASS.
MARCH 1996: 55TH ANNIVERSARY!
APRIL 1996: IN FISCAL YEAR (FY) 1995 = 4.5 MILLION DOMESTIC PASSENGERS (PAX), & 2.3 MILLION INTERNATIONAL (PAX), FLIES TO 44 DOMESTIC DESTINATIONS, & TO 34 CITIES IN 24 COUNTRIES.
$119 MILLION, 4TH 747-400C, LEASED. 1 A300B4-200 (262), EX-CONTINENTAL AIRLINES (CAL), (GUI) LEASED.
MAY 1996: MANNY DE DIOS, DIRECTOR AIRCRAFT LINE MAINTENANCE REPLACES SAMMY DE LOS SANTOS; AND ARNAL AGAN, MANAGER ENGINEERING REPLACES FRANCIS RAMIRO.
18 MONTH WET-LEASE, OF (WLD) DC-10-30, & 2 MD-11ER'S. 737-300 COLLIDED WITH TWIN OTTER ON RUNWAY AT MANILA - BOEING (AOG) TEAM SENT IN FOR REPAIRS.
JUNE 1996: 1ST "D" CHECK ON 737-300 (PP935) AT MALAYSIAN AIRLINES (MAS). PHILIPPINE AIRLINES (PAL) SENT MECHANICS TO OBSERVE.
4 MD-11'S, 322 PAX, WET-LEASED FOR 17 MONTHS FOR ROUTES TO FRANKFURT, PARIS, AUSTRALIA, AND THE MIDDLE EAST.
JULY 1996: LUCIO TAN, CHAIRMAN, LOANS PHILIPPINE AIRLINES (PAL) $152 MILLION TO MEET $200 MILLION OVERDUE PAYMENT TO AIRBUS (EDS) FOR NEW A320/A330/A340'S. OK GIVEN TO RAISE TAN'S STAKE IN (PAL) FROM 33%, TO 57%.
1ST A340-300 LEASED. 1 A340-300 (CFM56-5C3) (097), GULF AIR (GUL) 3 YEAR WET-LEASED.
AUGUST 1996: 5 737-200'S, EX-UNITED AIRLINES (UAL) BY INTERLEASE AVIATION. +2 MD-11'S WORLD AIRWAYS (WLD) WET-LEASED, FOR TOTAL 4, TO NEWARK, & CHICAGO (ORD), VIA VANCOUVER, 322 PAX, 2 CLASS. CODE SHARE WITH CANADIAN INTERNATIONAL (CDI), TO VANCOUVER (CDI) 747-400), 1 STOP, VIA HONG KONG.
SEPTEMBER 1996: 2ND A340-300 (039), GULF AIR (GUL) WET-LEASED. 7 ORDERS 747-400'S (CF6-80C2) (JUNE 1998) AT FARNBOROUGH AIR SHOW. 1 A340-200 (CFM56-5C2), EX-CATHAY PACIFIC (CAT).
OCTOBER 1996: "A" + "C" CHECKS ON MD-11'S BY EVA AIR (EVA).
TO NEWARK (MD-11).
STRUCTURAL REPAIRS ON 737-300 (PP935) COMPLETED.
JANUARY 1997: 1 ORDER (APRIL 1998) 747-400 (CF6-80C2).
MARCH 1997: 1 A340-200 (CFM56-5C2) RETURNED FROM CATHAY PACIFIC (CAT).
APRIL 1997: FISCAL YEAR (FY) 1996, ENDING MARCH 1997 = -$76 MILLION (NET LOSS). 9.403 BILLION (RPK) (PASSENGER TRAFFIC) (#35 HIGHEST WORLD AIRLINE).
MAY 1997: 1ST A340-312 OF 12 ORDERS (AUGUST 1997) A320'S, 8 ORDERS (JULY 1997) A330-300'S, & 4 A340-300'S. 747-200B (CF6-50E2) ATLAS AIR (TLS) WET-LEASED.
JUNE 1997: CODE SHARE WITH AMERICAN AIRLINES (AAL).
BRITISH AIRWAYS (BAB) TEAM VISIT TO STUDY STUDY MANAGING ENGINEERING & MAINTENANCE DIVISION, WITH REPORT IN 2 MONTHS. PHILIPPINE AIRLINES (PAL) HAD PREVIOUSLY APPROACHED LUFTHANSA (DLH), BUT THEY ALSO WANTED ENGINE OVERHAUL, AND (PAL) ALREADY HAS JOINT VENTURE WITH (GE).
JULY 1997: RETURNED LEASED A340 TO GULF AIR (GUL).
AUGUST 1997: RAY TALAVERA, MANAGER LINE MAINTENANCE, REPLACING ROLLY SEBASTIAN, WHO IS REASSIGNED TO MAINTENANCE CONTROL. ARNULFO AGAN, MANAGER AIRCRAFT OVERHAUL, REPLACING JOSE GREGORIO, WHO RETIRED. PARIS CABALLES, OFFICER IN CHARGE (OIC) ENGINEERING DIVISION.
1ST A330-301 (CF6-80E1), 278 PAX 2 CLASS. 1 A320-214. 1ST AIRLINE TO OPERATE A320, A330, & A340 TOGETHER. 2ND A340 TO GULF AIR (GUL). TO CONTINUE 4 MD-11'S, WORLD AIRWAYS (WLD) WET-LEASED. EXTENDS LEASE OF 5 747-200'S AND MAY GET (RD414) BACK FROM (GUI).
SEPTEMBER 1997: EFFORTS UNDERWAY TO RESTORE (FAA) REGULATORY SAFETY OVERSIGHT TO CATEGORY 1. INVOLVES SPONSORING INDEPENDENT ASSESSMENT, THROUGH INTER-FLIGHT SERVICE INC (ISI), SPEARHEADED BY WAYNE BARLOW, PRESIDENT (FORMER (FAA) EXECUTIVE DIRECTOR).
2 A330-301'S (188; 191), & 1 A340-313 (187) DELIVERIES.
OCTOBER 1997: 13,688 EMPLOYEES.
"RENOIR" MAINTENANCE & ENGINEERING CONSULTANTS, 10 MAN TEAM, TO STUDY OPERATIONS OVER 10 MONTHS.
3RD & 4TH A330'S DELIVERIES. 1 A340-313X (196) DELIVERY. A300B4-203 (222), SOUTH AFRICAN AIRWAYS (SAA) LEASED.
NOVEMBER 1997: RETURNED 3RD LEASED A340 TO GULF AIR (GUL).
DECEMBER 1997: (FAA) SAFETY OVERSIGHT REINSTATES CATEGORY 1 FOR THE PHILIPPINE REGULATORY AUTHORITY. REMARKS IT IS DEEPLY DISTURBED BY INCREASED DIFFICULTIES IN PHASING IN AIRBUS (EDS) AIRPLANES.
JANUARY 1998: 2 A330-300'S (CF6-80E1A2) DELIVERIES.
FEBRUARY 1998: 8 737-3YO'S (24465; 24546; 24547; 24677; 24678; 24680; 24681; 24770) RETURNED TO (GEH), TO "GO" (GFL). 2 REMAINING MD-11'S, RETURNED TO WORLD AIRWAYS (WLD). NOW USES A340-300'S ON THE VANCOUVER ROUTE.
MARCH 1998: ACCDT: (PAL) A320-214 (708, /97) OVERSHOT RUNWAY, LANDING AT BACOLOD CITY = 100 INJURIES, WITH 3 KILLED ON GROUND. THE AIRPLANE WAS DESTROYED & WRITTEN OFF (W/O). IT WAS SUGGESTED TO BE DUE TO A FAULTY THRUST REVERSER.
APRIL 1998: DUE TO SOUTH EAST ASIAN ECONOMIC CRISIS, PHILIPPINE AIRLINES (PAL) HAS DEFERRED INDEFINITELY 6 ORDERS 747-400'S, & 3 A330-200'S.
13,587 EMPLOYEES (INCLUDING 617 FLIGHT CREWS (FC) & 2,841 MAINTENANCE TECHNICIANS (MT)).
FISCAL YEAR (FY) 1997 = -$253.3 MILLION (NET LOSS).
JUNE 1998: CODE SHARE WITH CANADIAN INTERNATIONAL AIRLINES (CDI) TO VANCOUVER.
BARRY GREEN, TECHNICAL CONSULTANT, EX-CATHAY PACIFIC (CAT), & DRAGONAIR (DRG).
PILOT STRIKE RESULTS IN 625 (FC) PILOTS BEING FIRED. NOW, OPERATING ONLY 20% OF FLIGHTS. LAYS OFF -5,000 EMPLOYEES (-40%), TO STAVE OFF TOTAL SHUTDOWN, IN WAKE OF DISASTROUS PILOT (FC) STRIKE. STRIKE WAS COSTING -$4 MILLION A DAY, ALREADY -$44 MILLION. INTENDS TO REDUCE CURRENT FLEET FROM 55 TO 14. TO SELL 737-300/-400'S, 747-200'S, A300B4'S, & A340'S, LEASE THEM, OR RETURN TO LESSORS. TO RETAIN 3 737-300'S, 3 A320'S AND 4 A330'S FOR DOMESTIC, & REGIONAL ROUTES, AND 4 747-400'S FOR SAN FRANCISCO (SFO)/LOS ANGELES (LAX) ROUTES. 40 AIRPLANES TO BE RETURNED TO LESSORS, INCLUDING A340'S TO AIRBUS (EDS), AND 747-200'S TO AMEX.
JULY 1998: PHILIPPINE AIRLINES (PAL) ENTERS BANKRUPTCY. THE GOVERNMENT DEPARTMENT OF TRANSPORTATION (DOT) TOLD PHILIPPINE AIRLINES (PAL) TO STOP GROUNDING AIRPLANES AND CUTTING SERVICES. BETWEEN APRIL & MAY, (PAL) LOST $10 MILLION, AND DEBTS = $2 BILLION. LAST QUARTER = -$117 MILLION.
AUGUST 1998: PRESIDENT GARCIA RESIGNS.
PLANS TO OPERATE WITH 21 AIRPLANES, & 8,578 EMPLOYEES (INCLUDING 200 FLIGHT CREW (FC) AND SERVE 10 INTERNATIONAL DESTINATIONS.
FORMER PRESIDENT, ROMAN CRUZ TO BE REINSTATED AS PRESIDENT.
CANCELLED 8 ORDERS A320'S (CFM56-5B).
SEPTEMBER 1998: CEASES OPERATIONS.
747-2F6B (21834) RETURNED TO LESSOR, STORED AT LAS VEGAS.
OCTOBER 1998: RESTARTS OPERATIONS WITH 9 AIRPLANES TO 14 PHILIPPINE CITIES, AND 3,500 EMPLOYEES. AGREEMENT TO FOREGO STRIKES, & USE OF COLLECTIVE BARGAINING FOR 10 YEARS, WITH EVERY RETIREE TO RECEIVE 60,000 SHARES OF STOCK.
NOW, 38 DAILY FLIGHTS TO 13 DOMESTIC CITIES.
NOW RETAINING 9,000 EMPLOYEES UNTIL NEW INVESTORS DECIDE.
CATHAY PACIFIC (CAT), MAY BUY 40% OF PHILIPPINE AIRLINES (PAL). (PAL) HAS $2 BILLION DEBTS. (IATA) SUSPENDS (PAL) FOR FAILURE TO PAY OBLIGATIONS ($30 MILLION). (PAL) IS NOW UNDER AN INTERIM RECEIVERSHIP. USA COURT, ORDERED THE GARNISHING OF 2 747-400'S, 1 IN LOS ANGELES (LAX), & 1 AT (HAECO) (CAT) FOR MAINTENANCE.
FLEET: 9 AIRPLANES: 4 737-300'S, 2 A320'S, & 3 A330'S.
NOVEMBER 1998: RESUMES FLYING TO TAIPEI & SINGAPORE. RESUMES TRANS-PACIFIC (747-400'S) NEXT MONTH.
6 MONTHS ENDING SEPTEMBER 1998 = -$150 MILLION (X-3).
A300B4-203 (125, 203) SOLD TO AVIATION SALES LEASING (ASC).
JANUARY 1999: 4 CATHAY PACIFIC (CAT) EXECUTIVES RESIGN FROM (CAT) TO JOIN PHILIPPINE AIRLINES (PAL): IKE SCANTLEBURY, FINANCIAL DIRECTOR (SWIRE); PETER FOSTER, GENERAL MANAGER TAIWAN & PHILIPPINES; ANDREW FYFE, COUNTRY MANAGER AUSTRIA, GERMANY & SCANDINAVIA; & RICHARD WALD, STATION MAINTENANCE MANAGER, PARIS. LUIS JUAN VIRATA, PRESIDENT & ACTING (CEO).
FEBRUARY 1999: TO CODE SHARE WITH MALAYSIAN AIRLINES (MAS), MANILA, & CEBU, TO KUCHING, KOTA KINABALU, & KUALA LUMPUR.
5 EX-CATHAY PACIFIC (CAT) EXECUTIVES ARE CONTRACTED IN FROM REGENT STAR SERVICES: PETER FOSTER, CHIEF COMPANY ADVISER; MIKE SCANTLEBURY, SENIOR FINANCIAL ADVISOR; RICHARD NUTALL, SENIOR COMMERCIAL ADVISER; ANDREW FYFE, SENIOOR GROUND SERVICES & TRAINING ADVISER; RICHARD WALD, SENIOR ADVISER MAINTENANCE & ENGINEERING.
SALE OF $11.5 MILLION OF ASSETS TO PAY CERTAIN DEBTS SO AS TO KEEP 4 747'S AND 12 A330'S FLYING. PLANS TO SELL ITS 54-HECTARE MAINTENANCE FACILITY WITH HANGAR CAPABLE OF HANDLING 4 WIDE BODIES, SINCE FACILITY IS DESIGNED FOR AIRLINE WITH >50 AIRPLANES, & PHILIPPINE AIRLINES (PAL) CURRENTLY ONLY OPERATES 22.
MARCH 1999: STARTS 4/WEEK TO XIAMEN, CHINA (A320) (ITS 12TH INTERNATIONAL DESTINATION).
PHASES OUT UNECONOMICAL F 50'S, AND REPLACES WITH 737-300'S, 141 PAX. 2 A330-300'S RETURNED TO PHILIPPINE AIRLINES (PAL) BY EUROPEAN EXPORT CREDIT AGENCIES.
APRIL 1999: (IATA) OWED $32 MILLION BY PHILIPPINE AIRLINES (PAL), REJECTS (PAL)'S LATEST RESTRUCTURE PLAN, AND REFUSES TO ADMIT (PAL) AS AN (IATA) MEMBER. THIS WILL HARM POSSIBLE CODE SHARE ALLIANCES. BOEING (TBC) IS OWED $120 MILLION FROM 7 CANCELLED ORDERS. MAJOR (PAL) SHAREHOLDER, LUCIO TAN, CHAIRMAN, INJECTS $200 MILLION.
737-300 (PP935) RETURNED.
MAY 1999: AVELINO ZAPANTA, PRESIDENT & (COO).
JUNE 1999: LUFTHANSA (DLH) CONSULTING SIGNS AN AGREEMENT TO MANAGE RESTRUCTURING OF PHILIPPINE AIRLINES (PAL). LUFTHANSA TECHNIK (LTK) (DLH) FORMS JOINT VENTURE WITH MACROASIA CORP (CONTROLLED BY LUCIO TAN, (PAL) CHAIRMAN) TO OFFER MAINTENANCE, REPAIR & OVERHAUL (MRO) SERVICES, AT (PAL)'S MAINTENANCE HANGARS.
1998 TOP WORLD AIRLINES PASSENGER TRAFFIC (RPK) BILLIONS:
40 EAD 8.07; 41 AIN 7.68; 42 ELA 7.55; 43 GIA 7.09; 44 PIA 6.82; 45 AMX 6.66; 46 FIN 6.66; 47 GUL 6.59; 48 ARG 6.56; 49 PAL 6.50; 50
AUGUST 1999: PHILIPPINE GOVERNMENT, FINANCE MINISTRY, ORDERS PHILIPPINE AIRLINES (PAL) TO REDUCE ITS WORKFORCE FROM 8,000 TO 5,000 IN NEXT 3 MONTHS.
FISCAL YEAR (FY) 1998 = -P10.2 BILLION. 2ND QUARTER = +P65.4 MILLION.
1 737-300 RETURNED TO KG AIRCRAFT LEASING.
SEPTEMBER 1999: CODE SHARE WITH EMIRATES AIRLINES (EAD) TO DUBAI.
OCTOBER 1999: PHILIPPINE AIRLINES (PAL) IS READMITTED INTO (IATA), AFTER SETTLING $32 MILLION DEBTS TO OTHER MEMBER AIRLINES. AVELINO ZAPANTA, (PAL) PRESIDENT STATED "(PAL) HAS RETURNED TO THE FOLD OF THE INTERNATIONAL AVIATION COMMUNITY." (IATA) REQUIRED A $12 MILLION SECURITY DEPOSIT.
NOVEMBER 1999: 1998 = -$327.2 MILLION (-$95.2 MILLION): 6.50 BILLION (RPM) TRAFFIC (-38%), 1.44 BILLION (FTM) FREIGHT TRAFFIC (-2%).
DECEMBER 1999: 2 ORDERS 747-200'S (WERE FORMERLY OPERATED BY PHILIPPINE AIRLINES (PAL) FOR CHARTER SERVICES TO SAUDI ARABIA.
FEBRUARY 2000: 8,207 EMPLOYEES.
747-400 MAINTENANCE CONTRACT, INCLUDING "D" CHECK, STRUT/SYNCHRO MODIFICATION + PAINT, TO (AMECO) (BEJ).
MARCH 2000: LUCIO TAN, EXECUTIVE CHAIRMAN & OWNER BUYS +30% OF PHILIPPINE NATIONAL BANK, FOR TOTAL 80% STAKE. PLANS TO ADD SERVICE TO DHAHRAN, FRANKFURT, LOS ANGELES (LAX), RIYADH, SAN FRANCISCO (SFO), SEATTLE, SYDNEY TORONTO, AND VANCOUVER. SELLS PHILIPPINE AIRLINES (PAL)'S MAINTENANCE OPERATIONS TO LUFTHANSA TECHNIK (LHT) (DLH).
1999 = +$5.9 MILLION (NET PROFIT), DESPITE PROJECTIONS LAST JUNE 1999, OF -$16.4 MILLION. BY THE END OF THE YEAR, TRANSPACIFIC +27% (RPK), MANILA - OSAKA +40% (RPK), & MANILA - HONG KONG +19% (RPK).
1 737-300 (28559), EX-AIR HOLLAND (HOL), GECAS (GEH) LEASED.
APRIL 2000: LUCIO TAN, MAJORITY SHAREHOLDER TO SELL HIS ENTIRE 69.7% STAKE IN PHILIPPINE AIRLINES (PAL).
CODE SHARE WITH EMIRATES AIRLINES (EAD) TO DUBAI. IN JUNE 2000, TO SYDNEY (3/WEEK). LATER TO VANCOUVER AND GUAM.
8,207 EMPLOYEES (INCLUDING 242 FLIGHT CREW (FC), & 938 CABIN ATTENDANTS (CA)). SITA: MNLDPPR.
747-400 COMPLETES "D" CHECK, STRUT MODIFICATION, CABIN REFURBISHMENT, & PAINT, AT AMECO (BEJ), IN 36 DAYS. 737-33A (25033), EX-ISTANBUL (IST), CIT AEROSPACE (TCI) LEASED.
MAY 2000: CREDITORS TO RETURN 2 A340-300'S IN JUNE & AUGUST 2000. FOR DOMESTIC OPERATIONS, TO WET-LEASE 3 A320'S TO OTHER OPERATORS, AND REPLACE THEM WITH 3 737-400'S, LEASED. WILL RETURN 3 737-300'S LATER IN 2000, WHEN LEASES EXPIRE, AND REPLACE THEM WITH 3 737-400'S, LEASED.
JUNE 2000: NEW JOINT VENTURE BETWEEN LUFTHANSA TECHNIK (LTK) (DLH), & MACROASIA WILL ACQUIRE MAINTENANCE & ENGINEERING UNIT OF PHILIPPINE AIRLINES (PAL) BY 3RD QUARTER 2000, AND BE KNOWN AS "LUFTHANSA TECHNIK PHILIPPINES."
TO SYDNEY (747-200/A330-300, 3/WEEK). OPERATES 747 SERVICE TO MINDANAO FOR 1ST TIME.
FISCAL YEAR (FY) 1999 = +$1.05 MILLION (1ST +VE IN 7 YEARS) (-$242.2 MILLION).
LUCIO TAN, CHAIRMAN STILL TRYING TO SELL HIS 67.1% STAKE, FOR $340 MILLION.
JULY 2000: CODE SHARE WITH MALAYSIAN AIRLINES (MAS), CEBU/MANILA - KUALA LUMPUR & TO KOTA KINABALU, & WITH KUWAIT AIRLINES (KUW) TO BANGKOK. TO PUSAN, KOREA (A320), ITS 14TH INTERNATIONAL DESTINATION. CODE SHARE WITH GULF AIR (GUL), TO ABU DHABI.
DOMESTIC MARKET SHARE, HAS SHRUNK FROM 79% IN 1996, TO 50%, WITH CEBU PACIFIC (CEB) 24%, & AIR PHILIPPINES (PHP) 22%.
1999 FISCAL YEAR (FY) = +$1.04 MILLION (-$251.5 MILLION): 7.5 BILLION (RPK) TRAFFIC (-54.3%); 66% LF LOAD FACTOR; 184.91 MILLION (FTK) FREIGHT TRAFFIC (-60.8%); 3.94 MILLION PASSENGERS (PAX) (-46.7%); 8,086 EMPLOYEES.
AUGUST 2000: 1,580 MAINTENANCE TECHNICIANS (MT) WORKERS WERE TRANSFERRED TO NEW ENGINEERING MAINTENANCE DIVISION IN LUFTHANSA TECHNIK PHILIPPINES.
4 737-200'S, AIR PHILIPPINES (PHP) LEASED. 1 A340-313X (187, F-OHPL) AIRBUS (EDS) LEASED.
SEPTEMBER 2000: PLANS TO ADD SERVICE TO DHAKA. IN OCTOBER 2000, CEBU - SEOUL. CODE SHARE WITH GULF AIR (GUL) TO ABU DHABI.
3 ORDERS (OCTOBER 2000) 737-400'S, TO REPLACE 3 737-300'S. SOLD 2 F 50'S TO DENIM AIR (20201; 20202).
OCTOBER 2000: LUCIO TAN, CHAIRMAN NOW TRYING TO SELL HIS MAJORITY INTEREST IN PHILIPPINE AIRLINES (PAL) FOR $200 MILLION.
NOVEMBER 2000: IN DECEMBER 2000, TO SINGAPORE - JAKARTA (A330-300, 4/WEEK). LAOAG - HONG KONG.
BAGUIO GOLD HOLDINGS (OWNED BY LUCIO TAN) ACQUIRES PHILIPPINE AIRLINES (PAL), THROUGH A SHARE-FOR-SHARE SWAP, INVOLVING 85.09%. THIS ENABLES LUCIO TAN TO LIST (PAL) SHARES ON THE PHILIPPINE STOCK MARKET.
1 737-4S3 (25594, EI-CVO), AERFI (AFJ) LEASED. 1 737-4YO (24684, EI-CVN), (GEH) LEASED.
FEBRUARY 2001: IN APRIL 2001, TO VANCOUVER - SAN FRANCISCO (SFO) (3/WEEK) (A340-300).
MARCH 2001: 60TH ANNIVERSARY!
APRIL 2001: 8,200 EMPLOYEES (INCLUDING 242 FLIGHT CREW (FC) & 938 CABIN ATTENDANTS (CA)).
MAY 2001: 3 737-3YO'S (24680; 24681; 24770), (GEF) 5 YEAR LEASED, TO BE SUBLEASED TO AIR PHILIPPINES (PHP).
JUNE 2001: IN JULY 2001, CODE SHARE WITH VIETNAM AIRLINES (VIE), TO HO CHI MINH CITY (A330, 2/WEEK).
AUGUST 2001: FISCAL YEAR (FY) 2000 = +$8.6 MILLION (+88.64%) (+$.9 MILLION): 5.75 MILLION PASSENGERS (PAX), 68.5% LF LOAD FACTOR (+2.4).
IN OCTOBER 2001, TO MELBOURNE (A330-300), SHANGHAI (737-400), AND TO BANGKOK (A330-300).
RENEWS THE LEASE OF 3 747-200'S FROM AIR PHILIPPINES (PHP), FOR ANOTHER 2 YEARS.
SEPTEMBER 2001: (firstname.lastname@example.org).
OCTOBER 2001: TO MELBOURNE & SYDNEY (2/WEEK). TO BANGKOK, BEFORE THE END OF 2001.
SINCE BEING PLACED IN RECEIVERSHIP IN 1998, PHILIPPINE AIRLINES (PAL) HAS REDUCED ITS $2.25 BILLION DEBT, BY >1O%. AS A GESTURE OF GOODWILL, CHAIRMAN, LUCIO TAN OFFERED (PAL) EMPLOYEES 60,000 SHARES, IN RETURN FOR A TROUBLE-FREE OPERATION FOR 10 YEARS. MOST WORKERS ACCEPTED THE OFFER. (PAL) WILL CELEBRATE ITS 60TH ANNIVERSARY IN MARCH 2002!
DEFERRING PLANS TO LEASE 2 747-400'S FROM PEGASUS AVIATION (PSS).
JANUARY 2002: STORES 3 747-200'S AT MARANA FOR POTENTIAL SALE. CITES THEIR EXPENSIVE OPERATING/MAINTENANCE COSTS, AND OUTDATED INTERIORS. MAY SELL AIRPLANES.
2001 TOP 50 WORLD AIRLINES - PASSENGER TRAFFIC BILLIONS (RPM):
1 UAL 116.60; 2 AAL 106.15; 3 DAL 97.60; 4 NWA 73.11; 5 BAB 64.24; 6 AFA 59.54; 7 CAL 58.76; 8 DLH 56.76; 9 JAL 50.77; 10 USA 45.93; 11 SWA 44.50; 12 SIA 42.76; 13 QAN 42.14; 14 ACN 41.49; 15 KLM 35.76; 16 ANA 33.16; 17 CAT 27.81; 18 TII 27.43; 19 IBE 25.64; 20 KAL 23.73; 21 ALI 22.45; 22 MAS 22.29; 23 AMW 19.06; 24 VAA 17.65; 25 VAR 16.02; 26 CHI 16.00; 27 EAD 14.37; 28 SAS 14.26; 29 ANZ 13.54; 30 SAA 12.70; 31 SVA 12.56; 32 BEJ 12.39; 33 ASA 12.23; 34 JAS 10.06; 35 THY 9.35; 36 AMX 8.51; 37 PAL 8.36; 38 GIA 8.15; 39 CMA 7.99; 40 ELA 7.79; 41 GUL 7.65; 42 PIA 7.24; 43 AIN 7.10; 44 TAP 6.43; 45 EGP 5.53; 46 OLY 5.24; 47 AUL 5.06; 48 FIN 4.93; 49 IND 4.52; 50 CQT 4.51.
APRIL 2002: 7,220 EMPLOYEES (INCLUDING 309 FLIGHT CREW (FC); & 1,441 CABIN ATTENDANTS (CA)).
MAIN BASE: MANILA - NINOY AQUINO INTERNATIONAL AIRPORT (MNL).
MAY 2002: BAGUIO GOLD HOLDINGS, AN INVESTMENT HOLDING COMPANY CONTROLLED BY TYCOON LUCIO TAN IS RE-EVALUATING A PLAN TO ACQUIRE PHILIPPINE AIRLINES (PAL). TAN PRESENTLY HOLDS 89.5%.
BETWEEN "9/11" AND NOVEMBER 2001, (PAL) LOST 2.1 BILLION PESOS, BUT FROM DECEMBER 2001 THERE HAS BEEN A REBOUND IN TRAVEL.
June 2002: Philippine President, Gloria Arroyo, states Philippine Airlines (PAL) may revert to government management control, as part of a long-term plan for an "open skies" policy that she said would revive tourism. (PAL) has urged the President to review plans to open up the country's airline industry, saying local carriers needed time to grow.
To Guam (A320, 3/week).
July 2002: 2nd Quarter = +$19.5 million/+984 million PESOS (+100%). Pays $39 million to buy 4.26% stock from the government. Fiscal Year (FY) 2001 = -$30.3 million/-1.5 billion PESOS (+419 million PESOS): 13.49 billion (RPK) traffic (+30.1%); 69.2% LF load factor; 5.68 million (PAX) (+12.3%); 264.92 million (FTK) freight traffic (+9.5%); 7,220 employees (+2.1%).
November 2002: 1st 6 months Fiscal Year (FY) = +$17.8 million. 1st 9 months International = 9.28 billion (RPK); 153.23 million (FTK) freight traffic; 2 million passengers (PAX).
December 2002: INCDT: A (PAL) A330-301 Came "incredibly close" to hitting a hillside, when it scraped power line wires on a 35 ft-tall utility pole on Nimitz Hill as the airplane tried a go-around in response to a Ground Proximity Warning System (GPWS) alert on approach to Agana Airport, Guam, thus saving the airplane and those on board from the fate that befell Korean Air (KAL) 747-300 in August 1997 (228 fatalities of 245 on board). The (PAL) three-man flight crew have had their licenses suspended and cannot fly again until the final results of the investigation. (PAL) may also face penalties for failing to report the incident to Philippine regulatory authorities within 72 hours as required by law.
Flight crews flying into Agana Airport, Guam have been alerted again to the fact that this approach can be highly dangerous. It is fortunate that this time, no-one died, but it is also remarkable that an industry has such an incredibly short memory for safety issues - even specific, serious ones - and appears not to be able to profit from experience. Both in 1997, and in this one, the airport navigation aids were only partially serviceable, but both flights left for Guam in the full knowledge that this was the situation. (PAL) claims its A330 made the approach with "bare-minimum navigational aids" as a result of damage to infrastructure caused by a recent typhoon (including disabled runway approach lighting system, middle marker, glide slope, sequenced flashing lights, and missing the (VORTAC) (navigation beacon) on Nimitz Hill).
There is no industry system for persuading airlines to take each other's accidents seriously enough. The International Civil Aviation Organization (ICAO) is supposed to be the repository for all reports but often is not even sent copies. (ICAO) has been promoting the idea of a Global Aviation Information Network (GAIN), but this has been going nowhere for a long time. About 120 airlines have acquired the British Airways Safety Information System (BASIS), but this system for spotting incident trends, is a series of in-house units. The International Air Transport Association (IATA) (ITA) has pledged to use the (BASIS) model to build up something wider, but today, things give the impression that other current financial needs have swayed this important issue, well down the priority list. The Flight Safety Foundation tries to enable airlines to learn from others' experiences by summarizing significant major reports in digest form, and disseminating them to members.
In a worldwide industry, there needs to be a global culture for things like safety, that the whole industry should hold in common. At present, however, global safety cohesion is missing, and no single organization has been charged with creating the awareness that is essential.
April 2003: 7,198 employees.
May 2003: A330-300 (184) & A340-300 (176) "D" checks by Lufthansa Technik Philippines.
August 2003: 2nd Quarter = -900 Pesos/-$18 Million.
September 2003: 2002 = +$5.5 Million: 13.52 Billion (RPK) traffic (+3.3%); +1.7% (ASK) capacity; 69.6% (+1.1); 5.7 Million passengers (PAX) (-1.1%); 265 Million (FTK) (-9%); 7,250 Employees (+.7%).
2002 TOP WORLD AIRLINES PASSENGER TRAFFIC (RPK) (Billions):
47 (ATZ) 16.30; 48 (LTU) 16.10; 49 (JAA) 15.90; 50 (HAP) 14.40;51 (JMA) 13.97; 52 (PAL) 13.52; 53 (AMX) 13.31; 54 (AIN) 13.25; 55 (FIN) 12.79; 56 (BER) 12.73; 57 (ELA) 12.54; 58 (TPR) 12.08; 59 (MON) 11.86.
December 2003: 3rd Quarter = -PHP 383.8 Million/-$6.9 Million (-PHP 37.3 Million).
747-4F6 (27827, RP-C8168) GECAS (GEF) leased.
March 2004: Manila - Vancouver - Las Vegas (4/week).
May 2004: Code share with Royal Brunei (RBA), Manila to Bandar Seri Begawan.
June 2004: Purchased the Sabre Airline Solutions SabreSonic Ticket as it looks to move to full e-ticketing capabilities.
July 2004: Puerto Princesa - Seoul (A320, 2/week).
August 2004: Jamie Bautista, President & (COO), 47, ex-Air Philippines (PHP), replaced Avelinto Zapanta, who retired.
October 2004: Will consolidate most of its passenger data networking requirements with (ARINC) under 3 new contracts. (ARINC)'s Asia Pacific Division will provide the carrier with its AviNet MUSE Link wide-area network service to support passenger operations at Incheon, Pusan, and Melbourne airports.
November 2004: In February 2005, will resume service to India (after 50 years). Also, service to Kathmandu and Yangon. Manila - Chubu/Centrair (4/week).
A320-214 (1063, RP-C3225), (SALE (SIL) leased.
July 2005: As Philippine flag carrier, Philippine Airlines (PAL) operates scheduled services to domestic and international destinations.
(IATA) Code: PR - 079. (ICAO) Code: PAL (Callsign - PHILIPPINE).
Parent organization/shareholders: Lucio Tan (53.79%); Top Wealth Enterprises/Maxwell Holdings/Richmark Holdings (35.15%); Government (4.26%); other shareholders (4.19%); & employees (2.61%).
Domestic, Scheduled Destinations: Bacolod; Butuan; Cagayan de Oro; Cebu; Davao; Dipolog; General Santos; Iloilo; Kalibo; Legaspi; Manila; Naga; Puerto Princesa; Roxas; Tacloban; Tagbilaran; & Zamboanga.
International, Scheduled Destinations: Bangkok; Busan; Fukuoka; Guam; Ho Chi Minh City; Hong Kong; Honolulu; Jakarta; Kuala Lumpur; Los Angeles; Melbourne; Osaka; Riyadh; San Francisco; Seoul; Shanghai; Singapore; Sydney; Taipei; Tokyo; Vancouver; & Xiamen.
American Airlines (AAL) and Philippine Airlines (PAL) launched interline e-ticketing (IET), bringing the number of domestic and international carriers providing (IET) in cooperation with (AAL) to 28.
October 2005: Philippine Airlines (PAL) will resume service from Manila to Beijing on Nov 11th, 16 years after the route was suspended. The airline will operate 3 flights a week, on Tuesdays/Fridays/Sundays, with an A320.
A320-214 (936, RP-C3229), (GEF) leased.
November 2005: 1st 10 months international = Passenger traffic 11.76 Billion (RPK) (+4.8%); Freight traffic 203.16 Million (FTK) (+4.2%); 2.58 Million passengers (+7.6%).
Philippine Airlines (PAL) said it will acquire nine new A320s through 2008. The money will be borrowed from export-import credit agencies, (PAL) President Jaime Bautista told reporters. "We will be flying newer airplanes, which will be acquired under an operating lease agreement," he said. The airline will have the right to purchase the planes during the lease. (PAL) reported that it has reduced its debt by half to $1 billion and will retire the remaining loans within nine years. It is looking to modernize its 31-plane fleet and will be replacing 737s starting next year. The carrier will launch Manila - Beijing service and plans to increase capacity to Los Angeles and San Francisco.
December 2005: Philippine Airlines (PAL) finalized a commitment for nine A320-200s announced last month and took five options as well. Engine choice was not released. The carrier also said it will lease two new A319-100s and two new A320-200s from (GE) Commercial Aviation Services (GEF). The firm and leased airplanes are valued at approximately $840 million, according to media reports. Firm deliveries will begin in the second half of next year and continue until 2008. The optional airplanes will be available between 2009 and 2012. (PAL) currently operates seven A320s, eight A330s and four A340s and reportedly is exploring several financing options.
A320-214 (1171, RP-C3230), (GEF) leased.
January 2006: Philippine Airlines (PAL) will end service to Kuala Lumpur in February and Riyadh in March, according to a statement by President Jaime Bautista cited by Xinhua. The carrier intends to increase frequencies to California and relaunch service to Mumbai, Bautista said.
Philippine Airlines (PAL) flights from the West Coast to Manila switched stopover point from Honolulu to Guam. The switch is on 747 flights from Los Angeles and San Francisco and should soon also be implemented on A340 flights.
Philippine Airlines (PAL) will discontinue service from Manila to Riyadh on March 2nd. The airline currently operates 3 flights a week on the route. The airline will also discontinue service to Kuala Lumpur on February 15th, also served 3x a week. The airline may use Riyadh's freed A340 to increase service to the USA and is considering a new route from Cebu to Los Angeles as well as from Manila to Mumbai.
Philippines President Gloria Arroyo has led the ground-breaking ceremony for the construction of a new international airport in northern Mindanao. The Laguindingan Airport development project will have a total cost of PHP12 billion/$226.85 million, and finally got the go-ahead after a PHP6 billion loan from South Korea's Overseas Cooperation Fund. Laguindingan Airport will initially cater to domestic flights but eventually will be upgraded to an international facility.
A320-214 (1210, RP-C3231), GECAS (GEF) leased.
February 2006: Philippine Airlines (PAL) will suspend service from Manila to Laoag due to the lack of staff willing to serve at Laoag International Airport. The airline operated 4 flights a week using an A320.
The Philippine government has decided to build an international airport at Barangay Alobo in Albay province. The airport development has an initial budget of PHP3.4 billion/$65.5 million and is expected to be completed in 7 years.
Lufthansa Technik (DLH) (LTK) Philippines (LTP) will perform heavy maintenance checks on Bmi (BMA)'s three A330s, (LTP) announced here.
June 2006: Philippine Airlines (PAL) selected the (CFM56-5B) to power nine A320s it ordered; it holds five options as well. (CFM) International said the engine order is worth $110 million. Deliveries will begin later this year and continue through 2012 if all options are exercised.
July 2006: (ARINC) said Philippine Airlines (PAL) chose its GLOBALink/VHF data link service to extend its operational communications, mostly on transpacific routes. Besides adding data link capability on transpacific routes and at Bangkok, Thailand, the Manila-based carrier also plans to achieve greater productivity through introduction of new data link applications.
September 2006: Philippine Airlines (PAL) told stockholders last week that the carrier will continue to push into new markets and modernize its fleet, with evaluations underway for acquisition of five regional wide body airplanes and three long-haul airplanes in addition to the order for 20 A320 family airplanes, that will begin delivery this month. Chairman, Lucio Tan and President, Jaime Bautista also said (PAL) will revamp its inflight product, combining its first (F) and business (C) classes into an upgraded business (C) class featuring lie-flat seats and on-demand In-Flight Entertainment (IFE). Targets for international expansion include China, where its Beijing service will increase to daily from 4x-weekly, and India.
(PAL) posted a profit of +$28.7 million in the fiscal year ended March 31, a +63% increase over the +$17.6 million earned in the previous year, and its best year since 1993. It reported its financial results in US dollars for the first time. Revenues rose +15% to $1.24 billion as "virtually all key performance indices . . . improved from year-ago levels." Expenses climbed +14% to $1.22 billion as the carrier confronted rising fuel prices by "zealously cutting costs and improving systems," including increased e-ticketing.
October 2006: Philippine Airlines (PAL) will decide by year end whether to order eight wide bodies from Boeing or Airbus, President, Jaime Bautista told reporters. He said (PAL) is considering the A340-600 and 777-300ER as part of an expansion plan, that includes an order for 20 (15 firm plus five option) A320 family airplanes from both the manufacturer and (GECAS) (GEF). It took delivery of the first airplane from that order, an A319-100. The airplane features "a new coastal-themed interior design that calls to mind the country's picturesque coastline" and a "21st-century enhanced cabin that is the first for an Asian carrier," (PAL) said. The A319s have eight business-class (C) seats and 126 in economy (Y), while the A320s will have 12 in business (C) and 144 in economy (Y). (PAL) plans to take two more A319s this year, six A320s and one A319 next year and five A320s in 2008.
2 A319-112s (2925, RP-C8601; 2954, RP-C8602), (GEF) leased.
December 2006: Philippine Airlines (PAL) placed firm orders for two 777-300ERs plus two options (worth $500 at list price, with airplane valuation firm Avitas estimating it as a $290 million order) and signed a letter of intent with (GE) Commercial Aviation Services (GEF) to lease two more 777-300ERs.
(PAL) said deliveries of the purchased and leased 777-300ERs will begin in the 2009 third quarter and continue through 2010. The airplanes on option will be delivered in 2011 and 2012. The airline said it will operate the airplanes in a two-class configuration seating up to 368 passengers.
"The acquisition of the 777-300ER allows (PAL) to expand direct services between the Philippines and the United States," President, Jaime Bautista said in a statement. "Our passengers will also benefit from the higher level of comfort and amenities that this high-technology airplane brings."
(PAL) said the new airplane, which will have a range of up to 7,880 nm, will complement its 747-400s on transpacific routes. Its wide body fleet currently comprises five 747-400s, four A340-300s and eight A330-300s. It operates transpacific flights to Los Angeles, San Francisco, Las Vegas and Honolulu as part of its 24-city network.
April 2007: A320-214s (3087, RP-C8604), delivery and (3107, RP-C8605), (GEF) leased.
May 2007: Philippine Airlines (PAL) exercised purchase rights on two 777-300ERs, bringing its commitment to the type to four firm orders. The purchase rights were part of an order placed last fall. The carrier also announced the signing of a Letter of Intent (LOI) with (GECAS) (GEF) for the lease of two additional, two-class 777-300ERs. Value of the two new airplanes is $500 million at list prices. Deliveries of the six airplanes will run from the third quarter of 2009 through 2010. (PAL)'s current wide body fleet comprises five 747-400s, four A340-300s and eight A330-300s.
A319-112 (3108, RP-C8603), delivery.
June 2007: Philippine Airlines (PAL) reported net income of +$140.3 million for its fiscal year ended March 31, its largest-ever annual profit and a more than sixfold improvement over last year's +$22.8 million profit. "These solid results . . . confirm that (PAL) is fully recovered and is now firmly on track towards long-term profitability," President, Jaime Bautista said. "We are consolidating these gains by reinvesting them in the business in order to further improve our products and services, which is critical in shoring up our competitive position in the liberalized aviation milieu." Fiscal Year (FY) revenue increased +12.8% to $1.39 billion, while expenses rose +6.4% to $1.3 billion, including a +9.7% jump in fuel costs to $401.9 million. "(PAL) managed to keep other expenses in check by relentlessly controlling costs and improving systems and productivity," the carrier said in a statement. "For instance, the airline recently completed the implementation of electronic ticketing throughout its network, becoming the first Philippine carrier to fully adopt the customer-friendly technology."
(PAL) carried 6.9 million passengers on 21,252 flights during the year and achieved a load factor of 76.8% LF. It has taken delivery of six of 20 A320 family airplanes it has on order, with four more slated for delivery later this year and five in 2008. It also has five A320 options and plans to take delivery of six 777-300ERs beginning in 2009, comprising four firm orders and two leases.
Bautista said the airline will invest $50 to $100 million to reconfigure and refurbish cabin interiors on its existing wide body fleet. It additionally is investing $30 to $50 million in Clark Field Airport in Pampanga, from where it plans to operate international flights in the future.
July 2007: The Carlyle Group, a private equity firm, reached a definitive agreement to acquire (ARINC) from its current shareholders, which include >12 major airlines and Boeing (TBC). (ARINC), which generates >$900 million in annual revenue, specializes in transportation communications technology, and its Air Traffic Control (ATC) support systems are used by carriers and airports throughout the world. Primary shareholders in the 77-year-old company based in Annapolis, include American Airlines (AAL), United Airlines (UAL), Delta Air Lines (DAL), Continental Airlines (CAL), Northwest Airlines (NWA), US Airways (AMW)/(USA), Air Canada (ACN), Air France (AFA)/(KLM), Lufthansa (DLH), British Airways (BAB), Mexicana (CMA), Swiss International Air Lines (CSR), (TACA) (TAC), FedEx (FED), Hawaiian Airlines (HWI), and Philippine Airlines (PAL). (AAL) said it would receive $194 million from the sale of its stake and (UAL) expects $125 million. Other carriers did not immediately disclose expected proceeds and (ARINC) did not release financial details. The company said the transaction is expected to close in the third quarter subject to regulatory approval. "This is an important step in the evolution of (ARINC)," Chairman & (CEO) John Belcher said. "We have worked very hard to find a partner, who shares our vision and believe that Carlyle's international presence, financial resources, and expertise in the aerospace, defense and communications sectors will be instrumental in the continued expansion of our business." Carlyle Managing Director & Head Global Aerospace & Defense, Peter Clare said, "We believe that (ARINC) is well positioned to capitalize on several favorable macro trends in both its commercial and government market segments." (ARINC) earned net income of +$10.2 million in 2006, a +14.3% decrease from +$11.9 million in 2005. Its annual revenue has risen steadily this decade, increasing +72.7% from $532 million in 2000 to $919 million last year.
2 A320-214s (3187, RP-C8606; 3205, RP-C8607), deliveries.
August 2007: Philippine Airlines (PAL) said it informed shareholders that it will exit receivership before year end, thanks to an 8-year streak of operational profits and 3 straight years of net profits. (PAL) earned a record +$140.3 million in the fiscal year.
Philippine Airlines (PAL) reported a "better than expected" +$34.5 million profit in the 1st fiscal quarter ended June 30, double the +$17.2 million earned in the year-ago period, crediting its "ability to capitalize on strong passenger demand during this peak travel quarter" for the result. President, Jaime Bautista said the improvement "validates our decision to exit receivership as soon as possible." (PAL) informed shareholders 3 weeks ago, that it planned to exit receivership this year after 9 years. He added that the profit will be "plowed back" into (PAL), as it pursues a fleet renewal program as well as product, systems and infrastructure upgrades.
First-quarter revenue grew +13% year-over-year to $373.4 million, while costs climbed +8% to $338.9 million. Fuel costs rose, but (PAL) cited a -12% decline in maintenance costs to $42.9 million as a sign that "intensive cost-control efforts bore fruit." Passenger numbers lifted approximately +5% to nearly 2 million, and load factor was up +2.9 points to 82.2% LF, which the airline said was its highest in more than a decade.
(PAL) signed a Memo of Understanding (MOU) with authorities in Chongqing paving the way for future service. It already serves Beijing, Shanghai and Xiamen on the Chinese mainland. It also announced financing agreements with Calyon Credit Agricole and KfW-IBEX Bank to fund the acquisition of 2 new A320s. It is revamping its narrow body fleet with 9 ordered and 2 leased A320s and 4 leased A319s and has options for +5 A320s. It has taken delivery of 7 airplanes so far and plans +3 more arrivals before year end.
September 2007: Philippine Airlines (PAL) is planning to launch services to Chengdu in China and Jeju Island in South Korea, and is considering services to San Diego and Seattle in the USA.
President & Chief Operating Officer (COO), Jaime Bautista said flights to Chengdu will be launched in early 2008 at about the same time as (PAL)’s new service to Chongqing. (PAL) unveiled plans in July to launch flights to Chongqing following the signing of a memorandum of understanding with local authorities but did not set a launch date. Bautista also said “discussions are now going on with agents” over the new Manila - Jeju service and “we’re looking to launch it in December”. (PAL) already serves Seoul and Busan in South Korea but no carriers currently operate on the Manila - Jeju route, according to Innovata.
The addition of Chengdu and Chongqing will give (PAL) 5 destinations in mainland China. It currently serves Beijing, Shanghai and Xiamen. There are currently no scheduled services between Manila and Chengdu or Chongqing, according to Innovata.
Bautista said the new services to China and South Korea will be operated with A320s. He said (PAL) now operates 16 A320s with 2 more to be delivered in 2007 and 5 in 2008. Bautista revealed plans to firm up option for +5 A320s that will be delivered from 2009 to 2011.
Bautista said the additional A320s will be used mainly to expand services to existing destinations including Bangkok, Jakarta, and Singapore. He said (PAL) is also considering re-launching service to Kuala Lumpur, a route it dropped in early 2006 in favor of a codeshare with Malaysia Airlines (MAS).
Bautista said (PAL) also plans to double in November its Australia service, which is operated with A330s, from three to 6X-weekly flights. The service now operates on a triangular routing connecting Manila with Melbourne and Sydney. Bautista said the triangular routing will continue, but with the three new flights, (PAL) will operate the triangle in both directions.
(PAL)’s international network now consists of 24 cities, down from 36 before it entered receivership in 1998. Bautista sees (PAL)’s international network going back up to 30 cities. He said possible new destinations include Seattle and San Diego in the USA. But these can only be launched in 2009, when (PAL) takes delivery of the first of six leased and purchased Boeing 777-300ERs on order.
He said (PAL) also plans to use the new widebodies to increase services to existing North American destinations Los Angeles, San Francisco, and Vancouver. “We have a very simple strategy of adding more flights where demand is high and profitability is possible,” Bautista said, adding that all its international routes are currently profitable.
He added (PAL) has no plans to resume services to the Middle East or Europe, because the services offered by Middle Eastern carriers to Manila are currently exceeding demand. While in receivership, (PAL) dropped unprofitable services to several destinations in the Middle East and Europe.
“We think there is still overcapacity in the Middle East,” Bautista said. He added that Middle Eastern carriers now operate 45 weekly flights to Manila with connections to Europe. “We’ll maintain our presence in the Middle East by code sharing with all of them except Saudi Arabian (SVA).”
October 2007: Fresh from its emergence from receivership after >9 years of protection from creditors, Philippine Airlines (PAL) is seeking foreign investors, as it eyes further expansion. (PAL) said the move "provides greater flexibility as it seeks to grow its fleet, expand services and venture to new markets." To support further expansion, it is seeking to offer shares in publicly traded parent company, (PAL) Holdings to foreign institutions. "We will be embarking on a road show across Asia, Europe, and North America, to drum up interest in a limited offering of shares in (PAL) Holdings" said President, Jaime Bautista. The carrier entered into receivership in 1998, after nearly collapsing under huge debts. It originally expected to emerge from protection around the end of a ten-year "rehabilitation" period, which began in mid-1999, but says a better-than-expected financial performance in recent years, enabled it to do so earlier.
Philippine Airlines (PAL) reached agreement to place its code on Etihad Airways (EHD)'s daily Abu Dhabi - Manila service.
Lufthansa (DLH) Technik (LTK) opened a second widebody hangar at Lufthansa Technik Philippines in Manila. It is expanding its Asian operation to include heavy checks on A330s/A340s. The new hangar offers a fifth widebody maintenance line and measures 8,500 sq m.
INCDT: (PAL) A320-214 (753, /93 RP-C3224) overran the runway at Butuan Airport, Philippines and came to a halt among trees at the bottom of a slope. The 6 crew (FC)/(CA) and 148 passengers were OK.
+5 A320-200s to 13 already ordered (6 delivered).
November 2007: Philippine Airlines (PAL) suffered an $11.8 million loss in its fiscal second quarter ended September 30, widened from a -$6.2 million deficit in the year-ago period. (PAL) said the increase was due principally to higher maintenance and fuel expenses. Revenue rose +13% to $354.1 million, as yields climbed, it said. Fuel accounted for $108.2 million of the $365.9 million in expenses. Despite the result, (PAL) reached the halfway point of its fiscal year, a record +$22.7 million in the black, compared to a surplus of +$10.9 million in the year-ago semester.
2 A320-214s (3273, RP-C8611; 3310, RP-C8610), deliveries.
January 2008: Philippine Airlines (PAL) said it will continue to operate flights to the USA despite the (FAA)'s downgrading of the country to a Category 2 safety rating. (PAL) said it will be restricted by the (FAA) to the 33 weekly flights it currently operates to the USA and will not be able to change airplane types used on the routes, meaning that six 777-300ERs scheduled to begin delivering next year will not be able to be deployed as planned, unless the (FAA) upgrades the country's status. "We lament the (FAA)'s decision," (PAL) President, Jaime Bautista said. "We hope the [Philippine Air Traffic Control (ATC) service] will soon be able to rectify the assessed deficiencies in its air safety oversight functions so the country can revert to Category 1."
(PAL) currently flies to Los Angeles, San Francisco, Las Vegas, via Vancouver, Honolulu, and Guam. It is the only Philippine carrier operating flights to the USA. It said it could add service to those destinations only if it wet-leases airplanes from an airline operating in a Category 1 country. It expressed concern that the downgrade will "gravely affect inbound and outbound tourism traffic, [Philippines - USA] cargo traffic and investments inflow to the Philippines."
February 2008: Philippine Airlines (PAL) said an "absence of major one-time gains" was responsible for a swing in financial fortunes, that resulted in a -$11.3 million loss in the fiscal third quarter ended December 31, reversed from a +$79.5 million profit in the year-ago quarter. Operating income, however, improved to +$15.3 million from +$13.2 million in the year-ago period, (PAL) claimed. Revenue slipped -5% to $371.8 million, while expenses climbed +23% to $383 million. It did not explain how it achieved an operating profit. Nine-month net income of +$11.5 million compared to +$90.4 million in the first three quarters of the previous fiscal year. Operating income rose +67.1% to +$86.7 million. (PAL) said it expects a net profit for the fiscal year ending March 31.
March 2008: Philippine President Gloria Arroyo has approved the establishment of a new aviation safety oversight body, as the country works to reclaim Category 1 safety rating from the USA Federal Aviation Administration (FAA). The move will see the existing Air Transportation Office replaced by the Civil Aviation Authority of the Philippines (CAAP). The Philippine Information Agency says the (CAAP), to be set up in the coming months, will be an independent regulatory body with quasi-legislative powers with corporate attributes." It will also use its revenue to improve industry standards.
April 2008: Philippine Airlines (PAL) announced the launch of a low-fare subsidiary, "(PAL) Express," that will operate turboprops on regional routes and to smaller island airports incapable of handling larger airplanes. The airline will be based in Cebu and fly 6 Dash 8-Q400s and 3 Dash 8-Q300s initially. (PAL) announced the acquisition of the airplanes, with deliveries scheduled in the next 4 to 6 months. "PAL Express will meet the growing demand . . . for a high-quality carrier offering low fares," President, Jaime Bautista said. The 1st flight will be May 5 on an 8x-daily, Manila - Caticlan service. Cebu hub operations commence May 19 with flights to Caticlan, Bacolod, Tacloban, Butuan, and General Santos.
The (SAS) Group has sold six Dash 8-Q400s to Philippine Airlines (PAL). Also, nine 50-seat Dash 8-Q300s will be delivered in the next 4 to 6 months. The Dash 8-Q400 airplanes are valued at $150 million, (PAL) said, and will be used to "boost trade, tourism and local economies in rural island communities."
A320-214 (3455, RP-C8611), delivery.
May 2008: Teledyne Controls received an order from Philippine Airlines (PAL) for AirFASE, a flight data monitoring solution jointly developed by Teledyne Controls and Airbus (EDS). (PAL) is the 100th customer for the solution.
July 2008: Philippine Airlines (PAL) subsidiaries, (PAL) Express and Air Philippines (PHP) will launch operations at Manila Ninoy Aquino's new Terminal 3. The two carriers will operate a combined 131 weekly flights from the facility. The mainline (PAL) will continue to operate out of T2.
Thailand and the Philippines liberalize their aviation accord.
August 2008: Philippine Airlines (PAL) posted a profit of +$30.6 million in its fiscal year ended March 31, down -76.6% from the +$130.5 million earned in the previous 12 month period. Still, (PAL) called it a "noteworthy result in the escalating-fuel-price environment, that has battered the aviation industry since last year." It is the restructured carrier's fourth consecutive full-year profit. Operating revenue rose +15% to $1.46 billion, and expenses were up +14.9% to $1.37 billion. Operating profit increased +19.9% to +$84.3 million from +$70.3 million. The 2006 to 2007 net result was boosted by special gains. The airline transported 7.6 million passengers, up +10.1%, and load factor rose +2.6 points to a full-year record 79.5% LF.
October 2008: Philippine Airlines (PAL) will increase daily, Manila - Los Angeles to nine-times-weekly from October 26. Current service is operated with 747-400s; extra flights will be aboard an A340-300. The route will operate 11x-weekly, December 16 through January 15.
Shannon Aerospace (SLD) completed "D" maintenance checks on two Philippine Airlines (PAL) A320s. The contract was undertaken by (SLD) at the request of Lufthansa Technik (DLH) (LTK).
November 2008: 3rd quarter = net loss of -$160 million on $417 million in revenue, or -$68 million, excluding special items.
IBM reached a deal with Philippine Airlines (PAL) for Information Technology (IT) enhancement and consolidation, focused on streamlining response capabilities, and decreasing file maintenance time on (ALCS) systems.
December 2008: World nations currently rated Category 2 by the USA (FAA) under the agency's International Aviation Safety Assessment (IASA) program are: Bangladesh, Belize, Ivory Coast, Croatia, Democratic Republic of Congo, Gambia, Ghana, Guyana, Haiti, Honduras, Indonesia, Israel, Kiribati, Montenegro, Nauru, Nicaragua, Paraguay, Philippines, Serbia, Swaziland, Ukraine, Uruguay and Zimbabwe. The (FAA) rating prevents nation's airlines being allowed to fly into the USA. They have the option to fly to the USA with an airline who is approved under Category 1.
The (FAA) states that a Category 2 rating "may involve a country lacking laws or regulations necessary to oversee air carriers in accordance with international standards, or that its civil aviation authority does not meet international standards in one or more areas such as technical expertise, trained personnel, record keeping, or inspection procedures."
A320-214 (3731, RP-C8615), delivery.
February 2009: Philippine Airlines (PAL) expects to be "profitable or break even" in its fourth fiscal quarter ending March 31, but will remain in the red for the full year, President, Jaime Bautista said in comments cited by "Reuters." It lost -$113.8 million through the six months ended September 30 and posted a +$30.6 million profit in the 2008 fiscal year. "On the passenger side there might be a very small growth [in 2009] but we will be happy if we will be able to achieve the same number as 8 million last year," Bautista said.
August 2009: Philippine Airlines (PAL) said its -$301.4 million loss in the fiscal year ended March 31 prompted an array of "extraordinary" cost-cutting measures including the offering of early retirement packages to employees. It also approved the reduction in par value of its shares to PHP0.2/0.4 cent from PHP0.8 and a +25% increase in its authorized capital stock to PHP20 billion. (PAL)'s fiscal 2008 to 2009 revenue rose +8.6% to $1.63 billion but expenses climbed +23.5% to $1.9 billion. Load factor dropped -3 points to 76.2% LF. "We are currently reviewing our entire organization setup," President & (COO), Jaime Bautista said.
September 2009: Philippine Airlines (PAL) launched daily, Manila - Cebu - Davao - Manila service aboard an A330. (PAL) Express launched flights from Manila to Naga (2x-daily) and Surigao (daily) and added a second daily, Cebu - Iloilo flight.
November 2009: 777-36NER (37709, RP-C7777) (GECAS) (GEF) leased (SEE PHOTO - - "PAL-777-300ER-2009-11").
January 2010: Philippine Airlines (PAL) plans to resume flights to the Middle East this spring, starting flights to Riyadh in March or April to capitalize on the Filipino workers market in the Saudi Arabian capital. Saudi Arabian Airlines (SVA) is the only airline presently operating non-stop services between Manila and Riyadh. (PAL) fropped Riyadh from its network 4 years ago owing to low demand, but (PAL) now believes the route could be profitable. (PAL) is also considering services to India.
777-36NER (37712, RP-C7776), (GEF) leased.
February 2010: Lufthansa Technik (DLH) (LTK) Philippines (LTP) signed a contract with AirAsia X (ASX) to provide Maintenance Repair & Overhaul (MRO) services on the carrier's fleet of eight A330s/A340s for three years beginning in March. The work will take place at (LTP)'s Manila facility. (LTP) will provide four "C"-checks and a heavy maintenance check in the first year and also has committed to performing cabin retrofit services.
The contract is another signifier of (LTP) parent, Lufthansa Technik (LTK)'s commitment to Asia, (LTK) Chairman, August Wilhelm Henningsen said. Asia represents "our highest commitment [to a region] in terms of investments and we are going to expand if needed," he said. (LTP), he noted, now has 3,000 employees in Manila. He described Asia as the "driving motor" of the nascent recovery in global air traffic.
He said the recession did not have as severe an impact on (MRO) providers as airlines. The (MRO) "is not so heavily affected up to now" by the financial downturn, he explained, noting that the "we have not seen the reduction in flight frequencies that we've seen in past crises," particularly in 2001 and 1991. He did concede that (MRO) work on freighter airplanes has taken a serious hit owing to "a lot of cargo airplanes that have been grounded."
March 2010: Philippine Airlines (PAL) expects to post another loss in its fiscal year ending March 31, President, Jaime Bautista told reporters in Manila. (PAL) was -$301.4 million in the red in 2008 to 2009, but anticipates an improvement in 2009 to 2010. It lost $40.2 million through the nine months ended December 31. It expects to report more than >9 million passengers and revenue of approximately $1.4 to $1.5 billion for the full fiscal year.
The European Commission (EC)'s 13th update of its list of airlines banned from operating within the European Union (EU)'s borders includes all carriers from the Philippines and Sudan, as well as Iran Air (IRN). Philippine Airlines (PAL) currently operates to five North American destinations but neither it nor its affiliates fly to Europe, while Iran Air (IRN) does serve the continent.
The (EC) said it "acknowledges the recent efforts launched by the competent authorities to reform the civil aviation system in the Philippines" and that (PAL) and Cebu Air (CEB) have taken measures. However, it said it would "follow the principle of precaution" and impose a full operating ban. Sudan, the (EC) said, was guilty of "persistent noncompliance with international standards in the area of oversight." Ramp checks of Iran Air (IRN) airplanes serving the (EU), along with "serious incidents and accidents suffered by the carrier and insufficient oversight from the authority over the past year," led the (EC) to ban certain airplanes from operating. It said it plans a visit to Iran "over the next months" to verify safety oversight. It did not indicate which airplanes are banned.
The (EC) lifted some restrictions on (TAAG) Angola Airlines (ANG) and Air Koryo (KOY). Air Koryo (KOY), banned since March 2006, will be allowed to operate two specially equipped airplanes into the (EU), while (TAAG) (ANG) will be allowed to fly to any (EU) destination "under certain strict conditions with specific airplanes." Other Angolan airlines remain banned. The (EC) said it is "closely monitoring" airlines from Albania and Egypt. The blacklist still includes Ariana Afghan Airlines (AFG), Siem Reap Airways International (SRA), Silverback Cargo Freighters (VRB) and all airlines from 17 countries, including Indonesia.
(PAL) took delivery of its first two 777-300ERs and announced a resumption of service to Brisbane and Riyadh (RUH). (PAL) will serve Brisbane twice-weekly via Melbourne Tullamarine (MEL) aboard an A330-300, allowing its 5x-weekly, Manila (MNL) - Sydney (SYD) service to be operated with a 777. 4x-weekly (MNL) - (RUH) flights will begin March 28 aboard a 747-400. (PAL)'s 777s seat 370 in two classes and currently serve Hong Kong, Tokyo Narita, (SYD) and (MEL).
August 2010: Philippine Airlines (PAL) reported net income minus equity changes of +$31.6 million for its fiscal first-quarter ended June 30, down -11% from a +$35.5 million profit on the same basis in the prior-year period.
The profit drop occurred despite strong passenger and cargo demand. Revenue for the period increased +30% year-over-year to $426.7 million, while expenses rose +37% to $391.6 million.
Jet fuel costs lifted by +$55 million during the quarter with fuel prices at an average of $100.47 per barrel, up from $70.28 per barrel in the prior-year quarter, (PAL) said. President & (COO), Jaime Bautista said (PAL) is bracing for lower passenger volumes during the August - November “lean season." (PAL) is also facing the prospect of major flight disruptions owing to labor strife.
Bautista said that while the airline industry is showing signs of a slow recovery, (PAL) remains focused on efforts aimed at generating more revenue and controlling costs. Moving forward, he said, (PAL) must “swallow bitter pills” and handle its labor issues with “utmost care.”
Philippines Airlines (PAL) is facing the prospect of major flight disruptions owing to pilots (FC) resigning for better paid positions with other airlines and flight attendants (CA) threatening strike action over an age 40 retirement requirement.
(PAL) has already been forced to cancel some flights. Roberto Anduiza, representing the Flight Attendants' and Stewards' Association of the Philippines, told "Channel News Asia" that while some say “life begins at 40, at Philippine Airlines (PAL), it ends. [Age 40 is] too late to get a new job or transfer to another opportunity. We want a 60-year-old retirement age.”
(PAL) President, Jaime Bautista responded to "Channel News Asia" that the retirement provision is in the collective bargaining agreement between the airline and flight attendants (CA), and was agreed to by both management and the union. “It's not a provision imposed on them unilaterally," he said. "We can discuss it. We did not tell them that we are not amenable to changes, but we need to discuss [a] reasonable [age] because there is a clamor from our passengers for younger crew members who can serve faster."
Bautista said (PAL) is willing to give 25 pilots (FC) who resigned a chance to return to work. "We are giving them until Monday to return to work, take the flights that we assigned them. There will be no sanctions or penalties. If they don't come back, we will be filing [breach of contract] claims against them."
Philippine Airlines (PAL) is bracing for a sharp fall in revenue due to labor disputes and a tourism falloff. The Hong Kong government has advised its residents against traveling to the Philippines after the hijacking of a tourist bus in Manila this week resulted in the deaths of eight tourists, all from Hong Kong. The hijacker, who was a former Filipino police officer wielding an M16 rifle, also died. While (PAL) has to contend with fewer tourists, it also has fewer pilots (FC). Since July 29, (PAL) has cancelled dozens of flights because 27 of its 473 pilots (FC) left suddenly to join other carriers. The pilots (FC) are A320 captains and first officers, says (PAL) President, Jaime Bautista, adding that some joined Hainan Airlines (HNA) Group’s Hong Kong Airlines (CRY). (CRY) is on an expansion drive as it takes delivery of A330s. Bautista says: “The (PAL) pilots (FC) violated the terms of our agreement and we will be filing charges against them for breach of contract. ”The pilots (FC) are required to give (PAL) 180 days’ notice and, if (PAL) has paid for training, they are required to serve the airline for 5 years, he said. (PAL) pilots are sought-after because they speak good English and are well trained, said1 Bautista. Even though (PAL) has a shortage of A320 pilots (FC), it will still take delivery of two A320s as planned. These airplanes, one to be delivered in October and the other in November, will be leased from Avolon and assigned to (PAL)’s low cost carrier Airphil Express, said Bautista. Avolon is a new leasing company based in Ireland and founded by former (RBS) Aviation Capital executives.
(PAL) also has labor issues with its cabin attendants (CA) who are threatening to go on strike. Months of negotiations over wages and conditions have failed to result in a deal. Newly elected Philippine President, Benigno Simeon Aquino III, has publicly urged both parties to reach an agreement quickly. The President has also announced publicly that his government is seriously considering opening the country’s skies to foreign carriers. Bautista responded by saying: “(PAL) is not against open skies. We just want it to be fair, reciprocal and its implementation should be phased in and calibrated.” He also said, “Open skies should be viewed in the context of available infrastructure like Manila airport’s congested runway, over-burdened terminals and the country’s negative image as a tourist destination.”
In the three months ending June 30, (PAL) had a -11% fall in net income to $31.6 million. Revenues rose +30% to $427 million, but profits were lower due to higher fuel costs.
September 2010: A320-214 (4415, RP-C8388), transferred to AirPhil Express (PHP).
December 2010: (GECAS) (GEF) delivered one new A320 to Philippine Airlines (PAL), to be operated by AirPhil Express (PHP).
March 2011: 70 year anniversary! - - SEE ATTACHED "AIRLINER WORLD" REVUE - - "PAL-2011-03-70 YRS-A/B/C/D/E/F/G/H/I/J/K."
Air France Industries (AFI)/(KLM) (E&M) won a long-term contract with Philippine Airlines (PAL) covering maintenance and engineering support of its (GE90) engines. The contract also covers on-site and on-wing maintenance, shop visits, component support, spare engines and Engineering support for (PAL)’s 777ERs.
September 2011: The following is an "AIRLINE WEEKLY" publication article on the state of airlines in the Philippines: Not long from now, the remarkable AirAsia (ASW) will launch its latest joint venture (JV): AirAsia Philippines. In doing so, it enters a market with both promise and peril, one that’s already a theater of war between a high-flying Low Cost Carrier (LCC) and a struggling legacy carrier. To be sure, the Philippines has its problems as far as airlines are concerned. It’s hardly a wealthy country, with one in four people living on <$1.25 a day, according to the World Bank. Infrastructure, including airport infrastructure, is underdeveloped. Transparency International ranks it 134 out of 178 on its corruption perceptions index, tied with Nigeria and Bangladesh. Investment is low, income inequality high and tax collection weak. Among (ASEAN) nations, Thailand, Singapore and Malaysia receive far more overseas tourists. Terrorist threats keep visitors away from parts of the country’s south. Safety concerns dog the country’s aviation sector. And the Philippine economy certainly wasn’t helped by the crisis in Japan, its second largest trading partner after the USA.
All true, yes. But that’s not the whole story. If the Philippines was all bad news, AirAsia (ASW), for one, wouldn’t be so eager to enter. Nor would carriers as diverse as Cathay Pacific (CAT), Korean Air (KAL), Emirates (EAD) and Delta (DAL) be such active players in the market. And nor would the home-grown (LCC) Cebu Pacific (CEB) be as successful as it’s been. Indeed, the Philippines offers big opportunities for airlines (opportunities they are increasingly exploiting. Much of this opportunity is linked to the country’s flourishing if still underwhelming tourist sector. Last year, more than >3.5 million people visited the Philippines from other countries, +17% more than in 2009 and +12% more than in 2008, the previous peak year. Naturally, this growth is fueled by fast economic expansion throughout East Asia, fast enough to send arrivals up another +12% in the first half of 2011 (despite the Japan crisis and despite a massive -21% (y/y) drop in tourists from Hong Kong following an incident last summer in which eight Hong Kong tourists died in a Manila bus hijacking. Government officials expect 3.7 million visitor arrivals this year and roughly double that in the next five or six years. Helping their cause are the country’s relatively low prices (hotel costs are notably cheap, for example) and tourist draws like spectacular beaches and Spanish colonial cities. The visa regime is relaxed, airport fees are relatively low and northeast Asians in particular can’t seem to get enough of the country. Visitors from Japan are actually up +6% (y/y) so far this year despite the tsunami, and visitors from mainland China are up a bullish 17%. The volume of Taiwanese visitors is also way up, as are inflows from Australia and Singapore. Domestic tourism is growing too. But no country sends more tourists to the Philippines than Korea, the country’s largest source market by far. Koreans come to beach resorts like Boracay and Puerto Princesa, and at least as enthusiastically to attend English language schools in cities like Cebu and Baguio.
The warm-weather Philippines is also a popular retirement spot for Koreans. The USA, unsurprisingly, is the country’s number two source of visitors, reflecting the large number of Filipinos living in the USA. Of all foreign born residents of the USA, in fact, only Mexicans and Chinese are more numerous.
This raises another unique aspect of the Philippines that’s of great interest to airlines: the enormous number of overseas Filipino workers (OFWs) scattered throughout the world, most notably in North America and the Arabian Gulf. By some accounts, roughly a tenth of the entire Filipino population works abroad, contributing vital low-cost labor to their host countries and just as vital remittance money to their home economy. More than >1 million (OFW)s work in Saudi Arabia alone, many in the oil fields.
There are plenty of Filipinos back home too. The country’s total population is approximately 100 million, making it the 12th most populous country in the world and second in the (ASEAN) region behind Indonesia. What’s more, the nation consists of more than >7,000 islands, meaning heavy reliance on air travel. In addition to the capital Manila, centrally-located Cebu as well as Davao in the south are population and economic centers in their own right. And unlike much of the (ASEAN) region, major airports like Manila Aquino, Manila Clark and Cebu are within narrow body range of northeast Asian mega-cities like Tokyo, Beijing, Shanghai, and Seoul. Indeed, this is one major reason—along with the country’s large, mobile population and tourist potential (why Malaysia-based AirAsia (ASW) is establishing its new base at Manila Clark).
The Philippine economy has some bright spots too. Last year, it grew +7%, its highest figure in more than three decades. It was only mildly impacted by the recent global recession and might grow as much as +5% this year according to government estimates (it helps that many Filipino workers are employed in countries with booming oil exports). The new Aquino administration is inviting companies like Singapore’s Changi Airport to invest in infrastructure and attempting to improve the country’s fiscal health by pushing for greater tax compliance. One sector that’s thriving is call center outsourcing, with many USA companies, including several airlines like United (UAL), hiring Philippine companies to handle customer service inquiries. The Philippines is now trying to develop capabilities to handle calls from the USA and elsewhere for Spanish speakers.
For many years, the Philippine market, for all its ups and downs, was largely in the grip of Philippine Airlines (PAL), a carrier with a long history of union disputes and financial trouble. It emerged from a long stay in bankruptcy four years ago and did manage to make money in the 12 months to March 2011, earning a +$73 million net profit and a 4% operating margin thanks to the economic boom that benefited nearly all airlines in the region. In the most recent April-to-June quarter, however, it slipped to a -$11 million net loss and negative -2% operating margin. One big problem: the USA (FAA)’s 2008 safety downgrade of the Philippines, which prevents (PAL) from deploying its new 777-300ERs to markets like Honolulu, Los Angeles, San Francisco and Las Vegas. Nor can it add new USA routes until the (FAA) removes the country’s category two safety status, and nor can it fly to Europe until the European Union (EU) removes Philippine carriers from its own safety blacklist. In the meantime, (PAL) is outsourcing non-core activities (prompting union strikes and resulting flight cancellations), launching new routes like Delhi, working with Sabre to upgrade its Information Technology (IT) systems and perhaps entertaining the notion of joining an alliance. It’s also been busy evacuating Filipinos from Middle Eastern and North African hotspots. (PAL)’s greatest nemesis now stems from the home market it once dominated. Cebu Pacific (CEB), which first launched in 1996 but became a (LCC) only in 2005, now commands a leading 45% domestic market share, compared to 24% for (PAL), or 43% including its low-fare Airphil Express (PHP) affiliate. (CEB)’s 2010 Initial Public Offering (IPO) capped off a year in which its operating margin reached an outstanding 20%, among the best in the world, although profits have cooled a bit so far this year. It’s now the only (ASEAN)-based (LCC) serving the giant Beijing and Shanghai markets and has a unique ability to serve both northeast Asia and the (ASEAN) region with narrow bodies, in its case A320s and A319s. In 2008, it purchased ATR turboprop airplanes to tap domestic airports with short runways, and this year, it placed orders for A321-NEOs. (CEB) gets 11% of its revenues from ancillaries, 48% of its bookings from its popular website and gives AirAsia (ASW) a run for its money when it comes to clever marketing (it recently won international attention for a YouTube video showing its flight attendants dancing the safety drill to a Lady Gaga tune.
In many markets, (LCC)s have played a pivotal role in taking people off of buses and onto airplanes. In the Philippines, Cebu Pacific (CEB) has taken people off of sea ferries and onto airplanes, driving strong domestic air travel growth that averaged about +10% a year during the last half of the 2000s. But it’s now growing even faster internationally, most recently launching a Manila - Busan route. It’s now eying Tokyo, Nagoya, and Bali, presenting more potential headaches for (PAL).
The low-cost carrier (LCC) phenomenon is spreading throughout the Philippines not just with Cebu Pacific (CEB) and AirAsia (ASW), whose Malaysian unit already serves Manila Clark from both Kuala Lumpur and Kota Kinabalu. SEAir, another Philippine carrier, is partnering with Tiger Airways (TGR), which itself flies from Singapore to Manila Aquino, Cebu, and Davao. Jetstar (IMU) is also in the mix, with Manila Aquino nonstops to Singapore and Darwin. So are Korean (LCC)s including Jeju Air (JJA) and the Korean Air (KAL) and Asiana (AAR) affiliates Jin Air (JIN) and Air Busan (ABN), respectively. When AirAsia Japan, Jetstar Japan and Peach start flying, the Philippines might be on their radar. And China’s Spring Airlines (CQH) could have markets like Manila and Cebu in mind as well, especially following a recent "open skies" policy adopted by the Philippine government, covering markets outside of Manila anyway. Zest Airways, (RIT) formerly known as Asian Spirit, is another Philippine carrier now serving many domestic cities from Manila Aquino while also linking Shanghai, Seoul, Busan, and Taipei nonstop to Kalibo, a gateway to the popular Boracay Island, and Seoul to Cebu as well.
The growing dynamism of the Philippine market doesn’t stop with (LCC)s, however. (OFW) traffic is a low-yielding but high volume prize for full-service long haul airlines like Singapore Airlines (SIA) and especially Cathay Pacific (CAT), which offer (OFW)s and tourists alike an alternative to Philippine Airlines (PAL). Ranked by capacity (ASK)s flying into and out of the Philippines, Emirates (EAD), Etihad (EHD), Qatar Airways (QTA) and Saudi Arabian Airlines (SVA) are the country’s four largest foreign airlines, carrying planeloads full of (OFW)s. Gulf carriers have in fact driven (PAL) from a number of Gulf markets in recent years, while adding insult to injury by poaching many of its pilots (FC) and other skilled workers. Korean Air (KAL) and Asiana (AAR) are of course big players in the Philippines, as are other East Asian carriers. Three USA airlines serve the market too: Delta (DAL) from Tokyo Narita and Nagoya; Hawaiian (HWI) from Honolulu, and United (UAL) from Guam.
For all of this airline activity, however, the Philippines still has a long way to go before reaching its potential — and in some ways even catching up to its past. (KLM) is now the only European carrier serving the country, with AirFrance (AFA), British Airways (BAB), Lufthansa (DLH) and Swiss (CSR) all having left. Tourism remains fragmented, with many destinations scattered throughout the country and arguably under-promoted — Boracay just doesn’t have the same global name recognition as competing destinations like Singapore, Bangkok, Phuket and Bali. None of the country’s airlines are airline alliance members. And the World Economic Forum recently ranked the Philippines 94th worldwide in its travel and tourism competitiveness index. Not good!
But AirAsia (ASW)’s upcoming landing marks a promising step forward. Even if Cebu Pacific (CEB) proves the Manny Pacquiao of this boxing match, the fight itself is a good sign that low fares are here to stay, and that the Philippines will yet become the red-hot market its potential suggests it could be.
October 2011: Philippine Airlines (PAL) started the month with crippling strikes by ground staff, which happened to coincide with a disruptive typhoon that hit the region. Workers are livid about plans to outsource more than >2,500 jobs, prompting not just the unannounced strike but also damage to (PAL)’s ground equipment. (PAL) also faces a recurring problem of pilot (FC) defections to better-paying airlines like those in the Arabian Gulf. And it faces the tough local rival Cebu Pacific (CEB). And it faces limits on its expansion because of safety concerns (about Philippine aviation in general) among international regulators abroad. Despite its home market’s enormous potential, the outlook for (PAL) itself isn’t promising.
November 2011: Philippine Airlines (PAL) had a -$39 million loss for the calendar third quarter, down from a +$27 million profit a year ago. Revenues were +5%, while operating expenses were up +23%, including a +34% increase in fuel costs.
(GECAS) (GEF), announced the delivery of a new A320 airplane to Philippine Airlines (PAL) that will be operated by Airphil Express (PHP) to expand its fleet. Airphil Express (PHP) operates a fleet of 14 airplanes to more than 25 destinations.
December 2011: SR Technics (SWS) signed five-year contracts with Philippine Airlines (PAL) for repair cycle management (RCM) covering its fleet of 33 Airbus (EDS) airplanes and for engine maintenance, covering 21 (CFM56-5C)s.
January 2012: Philippine Airlines (PAL), in a regulatory filing,
showed a -$34 million net loss for the calendar fourth quarter, which reflects heavy competition and extremely tense labor relations. (PAL) probably was not thrilled to learn Cebu Pacific (CEB) has declared it will develop a long haul operation.
February 2012: Lufthansa Technik Philippines (LTP) opened a $30 million, Airbus A380 hangar in Manila. The new 8,500 sq m facility accommodates one wide and two narrow body airplanes at one time. (LTP) now offers three wide body hangars and will increase its workforce to 2,700.
April 2012: Brewer, the San Miguel Corporation is investing $500 million in Philippine Airlines (PAL) and a sister airline for minority stakes, according to "Reuters."
(PAL), which reported losses of -$33.5 million for the quarter ended December 31, had temporarily slashed flight frequencies and restructuring to reduce costs since last fall.
(PAL) President, Jaime Bautista said the investment will “help the flag carrier in its re-fleeting program and make the airline more viable and competitive.”
According to "Reuters," “under the deal with Dr Lucio Tan's Trustmark Holdings, San Miguel will take indirect stakes of 40% in (PAL) and 49% in its low-cost carrier (LCC) partner, Air Philippines Corporation, also known as Air Phil (PHP). San Miguel, valued at $6.4 billion, will gain management control of (PAL), the country's biggest airline,” "Reuters" said.
May 2012: Philippine Airlines (PAL) now flies to Denpasar in Bali, Indonesia from Manila, as well as from Kalibo to Seoul Incheon Airport in South Korea and Hong Kong.
Philippine Airlines (PAL) and San Miguel President, Ramon Ang has said that (PAL) would plan to place orders for up to 100 new narrow body and wide body airplanes to renew and expand its fleet following the investment by San Miguel in the national carrier. The new airplanes would be delivered to both (PAL) and its low-cost carrier (LCC) subsidiary, airphilexpress (PHP). Ang has also mentioned plans to resume flights to Europe (London, Madrid, Paris) and to add new destinations in the USA (Chicago, "Florida" and New York) once the Philippines are removed from the (EU) blacklist and receive a better rating from the USA Federal Aviation Administration (FAA). San Miguel is also considering building a new airport at Manila to replace Manila Ninoy Aquino International airport (MNL) within the next couple of years.
June 2012: Philippine Airlines (PAL) President, Ramon Ang has confirmed plans to invest in or acquire another carrier in the Asia-Pacific region without giving details on who exactly it is currently talking to.
July 2012: Philippine Airlines (PAL) President, Ramon Ang has announced plans to add Toronto Lester B Pearson International airport (YYZ) as a new long-haul destination before the end of the year. (PAL) currently already serves Vancouver International airport (YVR) in Canada. In addition, he expects to be able to serve New York, Paris Charles de Gaulle (CDG) and Rome Fiumicino Leonardo da Vinci International (FCO) airports, as (PAL) is currently working with the civil aviation authority of the Philippines to improve the country's status with the USA (FAA) and the European Union (EU) to allow these new routes. The USA Federal Aviation Administration (FAA) currently categorizes the Philippines as a Category 2 country from a flight safety perspective, not allowing carriers from there to launch new routes or increase frequencies to the United States. The (EU) has banned all carriers from the Philippines from its airspace.
August 2012: Philippine Airlines (PAL) has placed a firm order with Airbus (EDS) for 34 A321s, 10 A321neos and 10 A330-300s.
The airplanes are being purchased under (PAL)’s fleet modernization program, with deliveries starting in 2013. The single-aisle airplanes will be used on domestic and regional routes, while the A330s will be used on routes to Australia and the Middle East.
The total value of this order at list prices is $7 billion and brings the number of firm orders for the new neo to 1,335.
September 2012: (PAL) Express (based at Manila Ninoy Aquino International airport (MNL)) will be the new brand to be adopted by Philippine Airlines (PAL) owned, low-cost carrier (LCC) airphilexpress (PHP) with an exact date for the re-branding yet to be announced. The "PAL Express" brand had previously been used by Philippine Airlines (PAL) for its regional operations with DHC-8-300s and Dash 8-400s before the airplanes and routes were transferred to Airphilexpress (PHP) in March 2010.
Philippine Airlines (PAL) has placed yet another order with Airbus Industrie (EDS) for an additional ten A330-300s after already placing an order for ten airplanes of the same type in August. (PAL) already operates eight A330-300s and now has twenty additional airplanes on order.
October 2012: Philippine Airlines (PAL) and its low-cost carrier (LCC) airphilexpress (PHP) have announced a major restructuring of their domestic operations from Manila with each carrier focusing on some routes instead of the two carriers competing head to head in addition to competition from other (LCC) AirAsia Philippines, Cebu Pacific Air (CEB), South East Asian Airlines (SEAIR) (SRQ) and Zest Air (RIT). As of the (IATA) winter timetable starting October 28, (PAL) will exclusively operate from Manila to Bacolod (BCD), Cebu Mactan International (CEB), Davao Francisco Bangoy International (DVO), General Santos Buayan (GES), Iloilo International (ILO), Laoag International (LAO), Tagbilaran (TAG) while airphilexpress (PHP) will exclusively operate to Butuan (BXU), Cagayan de Oro Lumbia (CGY), Cotabato (CBO), Dipolog (DPL), Dumaguete (DGT), Puerto Princesa International (PPS) and Zamboanga International (ZAM). There are some other domestic routes previously served by both carriers or one of the two airlines unaffected by these changes.
December 2012: Philippine Airlines (PAL) launched flights on a pioneering route from Manila (MNL) to Toronto Pearson (YYZ) on 30 November. 3x-weekly services on the 13,200 km route will be operated with (PAL)’s 777-300ER non-stop on the outbound leg and via Vancouver on the way back. (PAL)’s President, Ramon Ang, said: “There has long been a big clamor from our customers in Toronto and all along Canada’s eastern seaboard, particularly the large Filipino community, for a Philippine Airlines (PAL) service to their part of the country. We heard them loud and clear, and are excited to develop our presence in Toronto.” Notably, within a day of the launch (PAL) announced it was increasing frequencies on the route to daily beginning on 17 January.
January 2013: Philippine Airlines ((IATA) Code: PR, based at Manila Ninoy Aquino International (MNL)) (PAL) has applied for traffic rights allowing it to launch four times weekly service from Manila Ninoy Aquino International (MNL) to either Moscow Domodedovo International (DME) or Moscow Sheremetyevo International (SVO) from September of this year according to a report by "Business World Online." At the same time, (PAL), the national carrier has also applied for rights to operate several weekly services to Istanbul Atatürk/Yesilköy International (IST) and Kuwait (KWI) indicating some of the destinations (PAL) plans to serve with the twenty A330-300s it has on order, to expand long-haul services until it is allowed to operate to the European Union (EU) or to expand USA operations. Philippine Airlines (PAL) is still blacklisted by the European Union (EU) like all other airlines from the Philippines while the USA Federal Aviation Administration (FAA) has rated the country as Category 2, not allowing (PAL) to launch additional routes or to increase frequencies to the United States.
airphilexpress ((IATA) Code: 2P; Manila Ninoy Aquino International airport (MNL)) (PHP) has been assigned five A330-300s that will be delivered to Philippine Airlines (PAL) in 2013 confirming earlier reports that the low-cost carrier (LCC) subsidiary of (PAL) will launch long-haul services next year. airphilexpress (PHP) is expected to be re-branded as "(PAL) Express" (based at Manila Ninoy Aquino International airport (MNL)) over the course of next year. It plans to mainly use the A330-300s on routes to the Middle East initially.
April 2013: Resurgent Philippines Airlines (PAL) continues its regional expansion unabated, beginning flights on 11 April from Kalibo (KLO), the capital of the province of Aklan, in the northwest of Panay Island, to Busan (PUS), the second largest city in South Korea. (PAL)’s twice-weekly, A320 operation will face direct competition on the route from Zest Air (RIT), apparently ‘Asia’s most refreshing airline,’ which flies a similar frequency on the city pair with its own 180-seat A320s.
Philippine Airlines (PAL) signed an in-flight connectivity deal with OnAir, to launch a Global System for Mobile (GSM) communications and Wi-Fi service later this year.
(PAL) will retrofit its fleet of A330s and 777-300ERs with Mobile OnAir and Internet OnAir in May, followed by the global (GSM) and Wi-Fi service later this year. OnAir’s mobile service enables voice communications, Short Message Service (SMS) and mobile data usage after takeoff and before landing.
In-flight connectivity is becoming “an absolute requirement” for airlines, according to (PAL) President, Ramon Ang. Airlines are starting to diversify their business models regarding distribution of cabin connectivity, with some carriers choosing to control distribution and pricing of the service, while others allow the in-flight service providers to determine how the service is provided.
(PAL) will be the first airline based in the Philippines to provide both (GSM) and Wi-Fi service for its passengers. “When both (GSM) and Wi-Fi are available, over 80% of passengers use (GSM),” said Ian Dawkins, (CEO) of OnAir. “People typically use the Wi-Fi for business. It is more suitable for heavier email and Internet usage. We give passengers the choice.”
May 2013: Philippine Airlines (PAL) returned to the market from Manila (MNL) to Kuala Lumpur (KUL) on May 1, following an absence of seven years. (PAL), which last operated the service in February 2006, now offers four weekly departures on the 2,500 km route, all of which will be served using A319s. Malaysia Airlines (MAS) (28 weekly flights), Cebu Pacific (CEB) (14) and (PAL) Express (PHP) (3) provide competition in the inter-capital market.
June 2013: A340-313X (302, RP-C3435), ex-(F-WJKL), Airbus (EDS) leased.
July 2013: Conviasa (VCV) and Philippine Airlines (PAL) have been cleared to resume services to the European Union (EU) in the latest (EU) blacklist update.
All carriers from the Philippines were banned from European airspace in 2010, but the European Commission (EC) said the Philippine authorities have improved their safety oversight and Philippine Airlines (PAL) has met the standards needed for the ban to be lifted. “For all other carriers registered in the Philippines, the ban remains,” the (EC) said in its first blacklist update since December 2012.
Countries where all operators are banned comprise: Afghanistan, Angola, Benin, Republic of Congo, the Democratic Republic of Congo, Djibouti, Equatorial Guinea, Eritrea, Gabon (with three exceptions), Indonesia (with five exceptions), Kazakhstan (with one exception), Kyrgyzstan, Liberia, Mozambique, Philippines (with one exception), Sierra Leone, Sao Tome & Principe, Sudan, Swaziland, and Zambia.
All carriers from the Philippines were banned from European airspace in 2010, but on July 10th, the European Commission (EC) announced Philippine Airlines (PAL) has been cleared to resume services to the (EU).
(PAL) President & (COO) Ramon Ang described the blacklisting as a “significant concern” that has been “hounding our aviation industry for years.” He added: “This welcome development also signals the westward expansion of our international route network as we prepare for the much-awaited return of (PAL) to such popular European destinations as London, Paris, Frankfurt, Amsterdam, Rome, and Madrid.”
Philippine Airlines (PAL) is preparing an ambitious expansion to Europe made possible after (PAL) was recently removed from the (EU)’s list of banned airlines. (PAL) plans to launch non-stop services to Europe within the next few months and serve up to five Western European destinations in the near to medium term.
But (PAL) faces huge challenges in trying to carve out a sustainable niche in the Southeast Asia-Europe market. (PAL) and another Southeast Asian flag carrier, Garuda Indonesia (GIA), are both entering the market just as competition intensifies and while the European economy remains relatively weak.
(PAL) and Garuda (GIA) will need to overcome three much larger Southeast Asian flag carriers which are well established in the European market along with two smaller (ASEAN) competitors. European and Gulf carriers also continue to expand in the Europe-Southeast Asia market, making it even tougher for a new entrant.
Philippine Airlines (PAL) commenced operations on the 1,300 km route from its Manila (MNL) base to Guangzhou (CAN), which it last operated in 1984. Beginning on July 16, (PAL) offers 4x-eekly flights to the Chinese city, which it operates using A320s. China Southern Airlines (GUN)’s 2x-daily and Cebu Pacific Air (CEB)’s 3x-weekly services provide direct competition in this market.
(PAL) commenced operations on the 2,300 km route from Manila (MNL) to Muan (MWX) on July 25. 2x-weekly flights on the newly launched route are operated using (PAL)’s fleet of A320s. Muan Airport (which opened in 2007) handles on average just three departing flights per day.
TriaGnoSys has fitted a Philippine Airlines (PAL) 777-300ER with in-flight GSMConneX connectivity hardware, making (PAL) the first to offer TriaGnoSys’ in-flight (GSM) and Wi-Fi services. GSMConneX will also be installed in all of (PAL)’s 777 and A330-343 airplanes.
(PAL) has a number of new airplanes on order: 20 A330-300s, plus 34 A321ceos and 10 A321neos, forming the backbone of (PAL)’s fleet modernization program. “When we fly back to Europe after an absence of 15 years, we can boast a newer fleet of airplanes and top quality customer service,” Ang said.
Emirates Airline (EAD) has denied media reports that it is interested in taking a major stake in Philippine Airlines (PAL). Several media outlets are reporting that billionaire Lucio Tan, who owns a 51% stake in (PAL), has been approached by unnamed investors to sell his shareholding. Tan, a cigarette and beer magnate, is looking to leave (PAL), which he bought in 1992.
Emirates (EAD) was linked in some media reports to the suggested deal.
In a brief statement, (EAD) dismissed the reports: “Emirates (EAD) has no plans to acquire a stake in another airline. We are busy focusing on the many aspects of our own growth.”
August 2013: Philippine Airlines (PAL) has moved the closing date for its investment in Cambodia Airlines to mid-October. (PAL) had originally planned to make a down payment of $1 million in Cambodian Airlines by July 15, but has advised the Philippines Stock Exchange that this has been delayed to October 15.
(PAL) will take a 49% stake in Cambodia Airlines for a total of $10 million through a joint venture (JV) transaction with parent company Inter Logistics. (PAL)’s board approved the investment on April 25.
(PAL) has said previously that it intends to deploy between 16 and 22 airplanes to the fleet of the new Cambodian carrier, which will compete against Vietnam Airlines (VIE)-backed carrier, Cambodia Angkor Air (AOL).
Airbus (EDS) announced the delivery of the first A321 to Philippine Airlines (PAL), part of an order for 64 new airplanes, under a fleet upgrade program for (PAL).
(PAL) is looking to operate its new A321s primarily on international flights within the Asian region as well as on selected domestic flights. (PAL)'s order includes 44 single aisle A321s and 20 wide body A330s. The (PAL) A321s are configured in a two-class layout, with 12C seats in business class and 187Y in economy.
Later this year Airbus (EDS) is scheduled to deliver (PAL)'s first new A330.
September 2013: Philippine Airlines (PAL) will re-launch services to Europe in November, after a 15-year break when all Philippine carriers were included on the European Commission (EC)’s so-called "blacklist" banning operations in European airspace.
On November 4, just four months after the lifting of the European ban, (PAL) will begin operating 5x-weekly between Manila and London Heathrow. The flights will operate nonstop between the two capital gateways using Boeing 777-300ER airplanes.
(PAL) President & (COO), Ramon Ang said: “That we have been given permission to fly to Heathrow makes our return much more meaningful . . . We take this as a strong vote of confidence by the UK authorities in (PAL)’s ability to bring in the passenger traffic volume worthy of the world's top airlines.”
In 2012, one-third of the estimated 349,000 European visitors to the Philippines came from the UK, and arrivals from the UK already reached 60,234 in the first half of 2013.
Ang said that, with the reinstatement of London flights, “we are sure these numbers will rise even further. With the new direct air links, our country is looking at a potential windfall in tourism, trade and investment from Europe.”
October 2013: Philippine Airlines (PAL) resumed flights to Abu Dhabi (AUH) from Manila (MNL) after a 15-year gap. (PAL) will operate the route five times weekly using A330-300s, configured with 414 seats across two classes, though the inaugural flight appears to have been operated using an A340. Ramon Ang, President & (COO) of Philippines Airlines, said: “We have returned to Abu Dhabi after an absence of more than 15 years to serve the large Filipino community in the United Arab Emirates (UAE). Our new airplanes will complement the warm and gracious in-flight service that will hopefully earn the support and patronage of travellers to and from Abu Dhabi.” Competition is provided by Etihad Airways (EHD) who already operate flights on the route twice-daily.
November 2013: Philippine Airlines (PAL) has resumed operations between Manila (MNL) and London Heathrow (LHR) after a 15-year gap. The five times weekly service started on November 4th using (PAL)’s long-range 777-300ER airplanes. No other carrier serves this 10,780 km route non-stop, with passengers wishing to travel between the two capitals previously best served by travelling via one of the three big Middle East hubs of Doha, Dubai or Qatar. (PAL) President, Ramon S Ang, said: “In the first six months of 2013 alone, we had more than >60,000 arrivals from Britain. This elevated the UK to the Philippines’ top ten visitor markets for the first time: – the only European nation on the list. With (PAL)’s new non-stop flights, we are sure those numbers will increase further. It is not just tourists who stand to benefit but more importantly our 664,000 Filipino kababayans in Europe, particularly the 250,000 living in the UK, who will now be able to return home more often via the airline that knows them best.”
December 2013: Philippine Airlines (PAL) has now resumed flights to Riyadh (RUH) in Saudi Arabia from its Manila (MNL) base. (PAL) last served the market at the end of March 2011 (with 747s), but on December 1st, it restarted operations with 4x-weekly flights operated by (PAL)’s more fuel-efficient A330-300s. The 7,790 km route is already served by Saudia (SVA) with 6x-weekly flights.
Philippine Airlines (PAL) has resumed flights from Manila (MNL) to Dammam (DMM) in Saudi Arabia for the first time in over a decade. On December 3rd (PAL) began 3x-weekly flights on the 7,460 km sector, on which it will compete against Saudia (SVA), who also serve the market with 3x-weekly flights. The first A330-300 flight into Dammam carried 216 passengers, while the first return flight had 367 people on-board. (PAL) last served the route in August 2001.
Philippine Airlines (PAL) currently operates 59 airplanes to 21 countries, 40 destinations on 49 routes and 135 daily flights.
A330-343E (1475, RP-C8785), ex-(F-WWYQ) delivery.
January 2014: Philippine Airlines (PAL) has appointed (APG) as its representative in Denmark, Sweden, Norway, Czech Republic, Slovenia, Switzerland, Finland, Lebanon, Jordan, Cyprus, Turkey, Germany, France, Spain, Portugal, and Israel. Under the agreement, (APG) will provide full sales and marketing services as well as customer support, ticketing and administrative facilities.
SEE VIDEO ON (PAL) 777-300ER AT SYDNEY - -
February 2014: Philippine Airlines (PAL) has introduced a weekly (Tuesdays) service from Cebu (CEB) to Taipei Taoyuan (TPE). The first flight on the 1,660 km route, operated by one of (PAL)’s A320s, was on January 28th. No other carrier operates non-stop between these two airports. This becomes (PAL)’s third international route from Cebu, after Tokyo Narita (served 2x-daily) and Seoul Incheon (4x-weekly flights). With regard to Taipei flights, (PAL) already serves the Taiwanese capital daily from Manila, and 2x-weekly from Kalibo.
March 2014: The Philippine government plans to upgrade 12 airports, including Manila's dilapidated main international airport, as it seeks to attract 10 million foreign tourists by 2016 and help fuel one of Asia's fastest growing economies. Three of the projects have a combined cost of up to 54.6 billion pesos/$1.22 billion, while costs for others are still being finalized. Half of the planned projects will be done through the Public-Private Partnership (PPP) scheme, Cosette Canilao, Executive Director at the agency overseeing the program said. Canilao also said operations and maintenance of these airports could be "bundled" into one tender, which will be offered to investors later this year.
Transportation Undersecretary, Rene Limcaoco said the government was looking at building a new terminal for the Ninoy Aquino International Airport (NAIA) in Manila, the Philippines' main gateway, which is also undergoing repair. The Puerto Princesa Airport on Palawan island, southwest of Manila, and Clark International Airport in Pampanga, north of the capital, are included in the list of gateways, which the government wants to modernize and upgrade. The planned upgrades will "ease our logistic costs, alleviate our traffic congestion and support the target of the department of tourism to achieve its 10 million tourists for 2016," Limcaoco said.
The Philippines attracted 4.7 million foreign tourists last year, 300,000 short of its goal, state data showed. President, Benigno Aquino wants to make the tourism sector one of the key drivers of the economy. The economy grew +7.2% in 2013, the second fastest in Asia after China.
Rehabilitation of (NAIA) Terminal 1 will be completed by early 2015 at the latest, while the airport's Terminal 3 will be fully-operational in July this year, said Limcaoco. He also said the transportation department is sticking with its end of March target to award the 17.52 billion-peso/$391 million (PPP) contract for the Mactan - Cebu International Airport Terminal.
April 2014: The (FAA) has upgraded airlines in the Republic of the Philippines to a Category 1 rating, as it now complies with international safety standards set by (ICAO).
The country previously held a Category 1 rating until January 2008, when it was downgraded to a Category 2. According to the (FAA), a Category 2 rating means a country either lacks laws or regulations necessary to oversee air carriers in accordance with minimum international standards, or that its civil aviation authority (equivalent to the (FAA) for aviation safety matters) is deficient in one or more areas, such as technical expertise, trained personnel, record keeping or inspection procedures.
The (FAA) said the return to Category 1 status “is based on a March 2014 (FAA) review of the Civil Aviation Authority of the Philippines. With the International Aviation Safety Assessment Category 1 rating, the Republic of the Philippines’ air carriers can add flights and service to the USA and carry the code of USA carriers,” the (FAA) said.
Etihad Airways (EHD) and Philippine Airlines (PAL) have signed a memorandum of understanding (MOU) to increase cooperation between the two national carriers. The (MOU) covers a range of services including code sharing, frequent flyer reciprocity, airport lounge access, air pass agreements and cargo cooperation.
(EHD) President & (CEO), James Hogan said the two companies have a history of cooperation on the Abu Dhabi - Manila route. “This relationship will go a long way in providing our combined customer base with a much more enhanced set of travel options,” (PAL) President & (COO), Ramon Ang said. “This also comes at an opportune time for (PAL), which is in the thick of a fleet modernization and expansion program that will see (PAL) pushing further not only into the Middle East but also to other parts of the globe.”
May 2014: Philippine Airlines (PAL) is the launch customer of OnAir Play, OnAir’s latest wireless, in-flight entertainment (IFE) product, on all (PAL)’s new international routes. (PAL) has become the first carrier in Asia-Pacific to provide its passengers with fully integrated connectivity and (IFE).
The Civil Aviation Authority (CAA) of the Philippines has signed a formal agreement with Honeywell Aerospace (SGC) and Hughes Aerospace Corporation to develop performance-based navigation procedures for Daniel Z Romualdez Airport in Tacloban that will enable safer, more reliable and consistent operations under all weather conditions.
The new navigation procedures will be used to improve aid, relief, recovery and rebuilding efforts for the Leyte region, Tacloban and the surrounding areas, following the catastrophic effects of Typhoon Haiyan in 2013. Honeywell (SGC) and Hughes will absorb the entire cost of the development of these approaches at the airport to ensure that the flow of relief supplies is not impacted. “The effects of Typhoon Haiyan were catastrophic for the people of Leyte and the Tacloban regions. Additionally, when the airport’s sole navigational aid was lost, it made safe and efficient recovery efforts even more difficult. Honeywell (SGC) is pleased to share its expertise in safety technology to support the rebuilding efforts,” said Brian Davis, VP, Airlines, Asia Pacific, Honeywell Aerospace (SGC). “We will continue to provide our support to the government through this difficult period to ensure the necessary navigational systems are in place to help with recovery and relief efforts.”
The new performance-based navigation (PBN) approaches will allow Daniel Z Romualdez Airport to move away from legacy ground-based navigation aids to satellite-based technologies using area navigation procedures. This will enable a lowering of the approach minimums that were in place before the disaster.
This shift in systems will allow airplanes carrying relief supplies to the Leyte region, to fly a more stable and accurate flight path, allowing shorter and more direct routes as well as more efficient takeoffs and landings. “The situation at Daniel Z Romualdez Airport was severe as Typhoon Haiyan had completely destroyed the ground-based navigational aid. As a result, the only Instrument Flight Procedure serving Tacloban was lost, limiting the airport to daytime operations in fair weather, which could potentially limit recovery and relief efforts,” said Chris Baur, President & (CEO), Hughes Aerospace. “Honeywell (SGC) and Hughes are partners in the global (PBN) movement, and working together, we identified an opportunity to assist the Philippines, providing a reliable, all-weather solution that is safer and has greater capability than the (VHF) omnidirectional range (VOR) Instrument Flight Procedure it replaces,” said Chris Baur. “Our successful partnership with the Philippines government and airlines will play a major role in helping to rebuild the Leyte region.”
Performance-based navigation (PBN) is a general term that defines navigation performance requirements for an air traffic route, instrument procedure or defined portion of airspace. This strategy will address current limitations on air transportation capacity by making more efficient use of the airspace. The strategy bases its foundation on two key navigation concepts: Area Navigation and Required Navigation Performance.
Key advantages of (PBN) approach include better access to terrain-challenged airports; parallel runway, converging and adjacent airport operations; lower Minima resulting in fewer weather-related delays and diversions; reduced flight time due to optimized routing; and more reliable, repeatable flight paths.
According to World Disasters Report in 2013, Asia remains the continent most frequently affected, with 40.6% of all natural and or technological disasters between 2003 and 2013. Africa comes second with 24.4% of all disasters. It is therefore exceptionally important for a country’s infrastructure ranging from airports, trains and ports to roads, bridges and telecommunications networks to function even in times of emergency.
(AMOS) has been selected by Philippine Airlines (PAL) as its prime (MRO) software solution. (AMOS), to be implemented in phases, will support the airline's strategy of in-sourcing line maintenance activities and performing certain (MRO) services in-house. The first phase involves the airline’s 48 narrow bodies; the remaining fleet will follow in the near future.
June 2014: Philippine Airlines (PAL) will cut services to Japan, despite a recent boost to schedules between the two countries. Flights to Osaka’s Kansai International will be reduced from the current twice-daily to daily, despite the recent March introduction of the second schedule. Likewise, (PAL) is scaling back flights to Tokyo Haneda from 2x-daily to daily, after introducing the increased twice-daily schedule in March. Its existing schedules to Nagoya and Fukuoka remain unchanged.
Japan - Philippine routes have seen intense competition and lower load since a new bilateral air services agreement came into force at the end of March, aimed at boosting tourism trade between the two countries.
Both Philippine low-cost carrier (LCC) Cebu Pacific (CEB) and Japan’s All Nippon Airways (ANA) are ramping up flight schedules to the Japanese mainland, with (ANA) operating new Boeing 787-8s in addition to its existing daily 767 service. (CEB) has launched seats on services between Manila International and Tokyo Narita in addition to a daily service to Osaka using new Airbus A320s with a $57 introductory fare.
This withdrawal opens the possibility of (ANA) taking up (PAL)’s vacant slots at the Tokyo airport, as it has recently stated it wants to transfer its prime operations completely to slot-poor Haneda. “We need more slots; Haneda is very important to us,” (ANA) President & (CEO), Osamo Shinobe said.
July 2014: Philippine Airlines (PAL) continues to look for a strategic investor to support turnaround efforts and further international expansion. But so far foreign airlines have been reluctant to invest in (PAL) as the flag carrier’s position in the highly competitive Southeast Asian market remains challenging and synergies with potential suitors are relatively limited.
A new partnership with Etihad (EHD) will improve (PAL)’s outlook. But (PAL) needs more partnerships and ideally a new investor. Meanwhile, competition in the Philippine international market is intensifying as (PAL) aggressively adds capacity in markets that Cebu Pacific (CEB) is planning to enter. There is a risk of overcapacity as (PAL) continues to pursue ambitious international expansion. The
(PAL) Group grows international passenger traffic by over >20% in 1st quarter (1Q) 2014.
(PAL) has been transformed, since Philippine conglomerate San Miguel took over management of the carrier in April 2012. (PAL) has since embarked on major fleet renewal and international expansion. Domestically, (PAL) has significantly reduced its presence and handed most routes to (PAL) Express (PHP), which San Miguel has converted from a Low Cost Carrier (LCC) (formerly known as AirPhil Express) into a full-service regional carrier.
In (1Q) 2014, the group recorded a +22% increase in international passenger traffic to 1.27 million passengers, according to Philippine (CAB) data. This includes 1.23 million passengers at (PAL) and about 37,000 passengers at (PAL) Express (PHP). (PAL Express (PHP) currently operates just one international route, Manila - Dubai; it previously operated a handful of regional international routes but has always been primarily a domestic carrier.)
The surge in international traffic follows growth of only +3% in 2013 to 4.27 million passengers. In 2010 through 2012, (PAL)’s international traffic was relatively flat. (PAL)’s market share gain has been even more impressive as the group accounted for 30% of international passengers in the Philippine market in (1Q) 2014 compared to only 23% in (1Q) 2013. The overall international market dropped in (1Q) 2014 by -7% to 4.2 million, according to Philippine (CAB) data.
(PAL) had captured a 30% share of the Philippine international market back in 2006 and 2007. But its share steadily shrunk from 2008 to 2012. The group captured a 25% share of the Philippine international market in 2012 and 2013.
(PAL)’s domestic market share, however, continues to slip. This is intentional, as the group under San Miguel has decided to focus more on the international market and drop the previous two-brand strategy which had budget brand AirPhil (PHP) operate alongside (PAL) on domestic trunk routes.
The (PAL) Group captured only 32% of the Philippine domestic market in (1Q) 2014 compared to 35% in (1Q) 2013 as (PAL) mainline traffic dropped -50% to 368,000 passengers. This was only partially offset by a +23% increase to 1.29 million passengers at PAL Express (PHP), which has been handed almost all domestic routes, to 1.291 million.
The (PAL) Group’s domestic market share has steadily slipped since 2005, when it captured a 63% share.
Cebu Pacific (CEB) in 2009 overtook the (PAL) Group as the largest player in the domestic Philippine market. (CEB) captured 56% of the Philippine domestic market in (1Q) 2014 (includes a 4% share from new subsidiary Tigerair Philippines).
Cebu’s international share was 19% in (1Q) 2014, as its international passenger traffic grew by only about +2%, while (PAL) grew international passenger traffic by more than >20%. (PAL)’s recent international push should ensure (PAL) remains the leader in the Philippine international market even as Cebu Pacific (CEB) starts to expand its new long-haul division and pursues significant growth in Japan.
While (PAL) has been cutting domestic capacity, its international network has expanded significantly over the past year with addition of London, four new destinations in the Middle East, and two destinations in Australia.
(PAL) is now planning further international expansion in the Australia/New Zealand, North American and European markets. According to (OAG) data, (PAL)’s international network currently consists of 34 international destinations, including 24 in Asia-Pacific, five in North America, four in the Middle East and one in Europe.
But an important component of the group’s new business plan still remains unimplemented. Long-time owner, Lucio Tan initially sold a 49% stake in (PAL) and (PAL) Express (PHP) to San Miguel. Mr Tan’s conglomerate, the (LT) Group, was expected to exit (PAL) completely within a year. But 27 months after the initial deal was completed, the (LT) Group still owns a majority stake in both carriers. (Lucio Tan is also still technically in charge of (PAL), but the 2012 deal gave control to San Miguel and (PAL) has since been managed by San Miguel (CEO), Ramon Ang, who has been serving as President & (COO) of (PAL).)
The original plan was for San Miguel or a new strategic investor to take over the (LT) Group’s remaining stake. Over the past two years, Mr Ang has been leading discussions with airlines potentially interested in acquiring a stake in (PAL). Mr Ang said in a recent interview with the "Wall Street Journal" that he is confident a strategic investor will be secured by the end of 2014, but declined to say if the stake would come from the (LT) Group or San Miguel.
Clearly, the preference remains for the (LT) Group to exit. The (LT) Group’s intent has always been to exit the aviation sector and focus on other investments. San Miguel could potentially take over the stake itself, but sees bringing in a strategic investor, as an important component of the (PAL) business plan.
Attracting an investor from the airline sector however has so far proven challenging. All Nippon Airways (ANA) emerged as a potential suitor in 2013 as part of the Japanese carrier’s initiative to invest in foreign airlines with a focus on the Southeast Asian market. But (ANA) has since ruled out an investment in (PAL).
(ANA) also has decided not to complete a planned investment in small Myanmar carrier Asian Wings, which when announced in August 2013 was seen as a toe in the water with the idea it would be followed by larger investments in the Southeast Asian airline sector.
(ANA) rival Japan Airlines (JAL)/(JSA) also has been ruled out as a potential investor in (PAL). Japan was a logical place for (PAL) to turn, as Japan is (PAL)’s largest market, accounting for about 22% of (PAL)’s international seat capacity.
(PAL) currently operates 63 weekly flights to five Japanese destinations (Fukuoka, Nagoya, Osaka, Tokyo Haneda, and Tokyo Narita), according to (OAG) data.
But synergies with Japanese carriers are relatively limited. (ANA) and (JAL)/(JSA) are strong competitors in the Philippines - USA market. (PAL) is now planning to expand its USA operation, which is made possible by Philippine authorities securing a Category 1 rating from the (FAA) earlier this year.
As (PAL) expands in North America, it will try to woo away passengers that have been flying via North Asian hubs including Tokyo, Hong Kong, Seoul, and Taipei, thus increasing the competitive posture towards airlines from those countries.
Japan is an important and growing source market for the Philippines tourism sector. But Philippines - Japan is primarily a leisure point to point market and seemingly is not of sufficient importance to Japanese carriers to justify an investment. There are also limited opportunities to offer Japanese passengers connections beyond Manila.
South Korea is also an important and growing source market for the Philippines tourism sector. South Korea is (PAL)’s second largest market based on current seat capacity, and is served with 46 weekly flights across five routes (Seoul to Cebu, Kalibo, and Manila, and Busan to Kalibo and Manila).
Korean Air (KAL) and Asiana (AAR) each have large presences in the Philippine market, which are supported by strong inbound demand from Korea as well as sixth freedom traffic, particularly to North America. Asiana (AAR) is the second largest foreign carrier in the Philippine market based on seat capacity, and currently has 39 weekly flights to the Philippines, while (KAL) is the fourth largest and has 23 weekly flights.
But it is similarly hard to build a business case for a Korean carrier to invest in (PAL). As is the case with the Japanese carriers, the potential opportunities for Korean carriers to use Manila as a transit hub for other regions of Asia are limited.
San Miguel has talked up building Manila into a transit hub. (PAL) is generally not well positioned for this type of traffic and will need to compromise yields to attract passengers in markets such as Australia - London and Singapore - North America. And potential North Asian partners would be impacted if (PAL) were to pursue this type of traffic aggressively.
While an investment seems unlikely, (PAL) could still use partners in Korea and Japan. A Korean and/or Japanese partner would help with local point of sales and connections to secondary cities in Japan. A Japanese or Korean carrier could also potentially help provide offline coverage to smaller North American markets which (PAL) does not intend to cover on its own.
Currently, (PAL) has a code share with only two North Asians carriers: Air Macau (MCU) and Cathay Pacific (CAT). But both partnerships are limited.
The Air Macau (MCU) code share is limited to the Manila - Macau route, which is currently only served by (PAL) (as well as Cebu Pacific (CEB)). The (CAT) code share is limited to the Cebu - Hong Kong route, which is only served by (CAT) (as well as Cebu Pacific (CEB)).
The Cathay (CAT) partnership excludes the much larger and more competitive Manila - Hong Kong route or any destinations beyond Hong Kong. The Cathay (CAT) - (PAL) partnership is unlikely to be extended as (CAT) competes with (PAL) in several key (PAL) markets including Philippines - North America, Philippines - Middle East and Philippines - North Asia.
Cathay (CAT) is now the largest foreign carrier in the Philippines with 43 weekly flights and 12,000 one-way seats. (CAT) regional subsidiary, Dragonair (DRG) also operates nine weekly flights to the Philippines, giving the Cathay (CAT) group about 25,000 weekly seats and over >5% of capacity in the Philippines international market.
A partnership with a mainland Chinese carrier would be more appealing as (PAL) only now serves four destinations in mainland China with a combined 22 weekly return flights. But a strong partnership or investment from a Chinese carrier, may be made less likely in view of the tense state of relations between China and the Philippines.
A partnership with a Taiwanese carrier would be more conceivable, but again would likely be relatively limited. Taiwan is a much smaller local market for the Philippines than Hong Kong, Korea or Japan. (PAL) has only 11 weekly frequencies to Taiwan, while China Airlines (CHI) and (EVA) Air serve the Philippines with 20 weekly flights and seven weekly flights, respectively. The close proximity of Taipei and Manila mean the two hubs compete for traffic and are not synergistic.
(PAL)’s code share partnerships in Southeast Asia are also relatively limited. Currently, (PAL) has code shares with Garuda Indonesia (GIA), Malaysia Airlines (MAS), and Vietnam Airlines (VIE).
(GIA) and (VIE) currently do not serve Manila, although Garuda (GIA) is planning to enter the Jakarta - Manila route by the end of 2014. The (MAS) code share initially provided (PAL) with offline access to Kuala Lumpur and has been maintained since (PAL) resumed services to Kuala Lumpur in early 2013. None of these airlines are in position to invest in (PAL) or any other foreign carrier.
A partnership with Singapore Airlines (SIA) would be more intriguing as Singapore is by far the largest Southeast Asian market from the Philippines. There are currently over >60,000 weekly seats between Singapore and the Philippines, making it the Philippines largest market after South Korea.
But there would be limited synergies for (SIA). (PAL) is not believed to be on (SIA)’s list of potential acquisition targets.
In recent years most of (PAL)'s code share partners have been from the Middle East. (PAL) currently code shares with Emirates (EAD) and Gulf Air (GUL). But (PAL) also previously code shared with Etihad (EHD) and Qatar Airways (QTA).
Most of its code shares with Gulf carriers were forged during a period when (PAL) did not operate any services to the Middle East. In some cases, Philippine authorities allowed (PAL) to have its code share partners use (PAL) traffic rights to Middle East countries, which enabled Gulf carriers to continue expanding in Manila after their own traffic rights were exhausted.
(PAL) and other Philippine carriers have since taken back most of these traffic rights. In second half (2H) 2014, (PAL) launched Abu Dhabi, Dubai, Dammam, and Riyadh services (Dubai is served by (PAL) Express (PHP)). Cebu Pacific (CEB) at about the same time, also launched Dubai and is planning to launch Kuwait in September 2014. (Cebu Pacific (CEB) also has been looking to serve Saudi Arabia, Oman, and Qatar.)
(PAL) forged a partnership agreement with (EHD) in late April 2014 that builds on the original code share between the two carriers. The two carriers announced on July 9th 2014 that the new partnership will initially cover the Manila - Abu Dhabi route, which (EHD) and (PAL) both operate. For now, the only extension announced beyond the parallel routing is to be on (PAL)/(PAL) Express (PHP) services to 20 Philippine destinations, including holiday destinations such as Cebu, Palawan, and Kalibo (a gateway to Boracay Island).
Etihad (EHD) has said it has no intention of acquiring a stake in (PAL). While an investment is always a future possibility for any carrier (EHD) partners with, (PAL) has a better chance of finding a suitor within Asia (although even there it faces an uphill battle to secure an investment).
(PAL) recognises the need to work with a Gulf carrier to support its effort to build a more global network. (PAL) currently does not code share with any European carrier. The new (EHD) partnership could potentially be extended to destinations beyond Abu Dhabi in continental Europe and Africa, as well as secondary destinations in the Middle East. Much of the foundation for Philippine services to the Middle East is in carrying migrant worker traffic, but the Gulf countries in particular have shown increasing interest in holidaying in friendly countries outside the region.
(PAL) has been looking at launching several potential destinations in continental Europe, including Amsterdam, Frankfurt, Paris, and Rome. One or two European destinations may still be added over the medium term, but following the Category 1 upgrade by the (FAA), it is more likely to focus on expanding in the USA market.
As (PAL)’s only current European destination is London, which is not generally considered a convenient hub for Asia to Europe connections, using Etihad (EHD) and the Abu Dhabi hub to cover the rest of Europe would be a sensible move.
In the USA, (PAL) currently serves Los Angeles, San Francisco, Honolulu, and Guam.
Restoration of Category 1 status has allowed (PAL) to shift all its Los Angeles and some of its San Francisco flights to the 777-300ER. (PAL) plans to shift its remaining San Francisco 747-400 flights to the 777-300ER at the beginning of September 2014. This will allow (PAL) to finally retire its 747-400s after an initial plan to retire the fleet in May 2014 had to be postponed. Moving the 777-300ERs to the USA market improves (PAL)’s product and efficiency, but comes with a catch, as (PAL) has to transition its Vancouver and Toronto services from 777-300ERs to A340s to free up 777s for the USA market.
(PAL) currently serves Los Angeles with 11x-weekly frequencies, San Francisco with 7x-weekly frequencies, Guam with 5x-weekly frequencies and Honolulu with 3x-weekly frequencies. Vancouver is served with 7x-weekly frequencies, three of which continue onto Toronto. (PAL) has been looking at launching new destinations in the USA in late 2014 or 2015. Chicago and New York are the most likely candidates.
(PAL) is also planning to increase Guam and Honolulu to daily services from late October 2014. (PAL) uses A320s to Guam and A340s to Hawaii. The increases in these markets come ahead of Cebu Pacific (CEB)’s planned launch of services to the USA, which is also made possible by the Philippines regaining a Category 1 ranking. (CEB) aims to launch Guam by the end of 2014 using its A320 fleet and begin serving Hawaii in 2015 using its A330-300s.
Category 1 also enables Philippine carriers to code share with USA carriers. A code share partnership with a USA carrier would improve (PAL)’s position in the USA market, as (PAL) would gain offline access to domestic destinations. But (PAL) could find it challenging to attract a USA major and may have to settle for a code share or interline with a smaller carriers such as Alaska Airlines (ASA), JetBlue (JBL), and Virgin America (VUS).
Partnering with a top European carrier may also be challenging, although this may not be as critical if its able to expand its new partnership with (EHD). In addition to potentially providing offline access to Europe via Abu Dhabi, the (EHD) partnership could lead to partnerships with European carriers that are part of the (EHD) equity alliance such as Alitalia (ALI) and airberlin (BER).
(PAL) would also find partnership with an Australian carrier valuable, although options are few. (PAL) is pursuing significant expansion in Australia.
(PAL) currently operates four weekly A340 flights to Sydney, three weekly A340 flights to Melbourne and three A320 flights to Darwin, with continuing service to Brisbane. (PAL) plans to upgrade Sydney to daily in late October 2014. At about the same time, (PAL) reportedly is intending to upgrade Melbourne to daily, and begin non-stop flights to Brisbane and Perth. (PAL) briefly served Perth in 2013 with 4x-weekly flights via Darwin, but quickly dropped the route while maintaining Manila - Darwin - Brisbane.
The Australia expansion comes just as Cebu Pacific (CEB) enters the Philippines - Australia market. (CEB) plans to initially operate four weekly flights to Sydney from September 2014, and is looking at adding Melbourne in 2015. While Cebu Pacific (CEB) should be able to stimulate new demand, overcapacity is likely if (PAL) implements its plan to double capacity to Australia.
Overcapacity is also likely in the Hawaii and Guam markets, as both (PAL) and (CEB) expand. Overcapacity has already resulted in the Philippines - (UAE) market, after both (PAL) and Cebu Pacific (CEB) entered the market in second half (2H) 2014. Both carriers have also been pursuing significant expansion to Japan.
The prospect of overcapacity and irrational competition results in a relatively gloomy short to medium term outlook for the Philippine international market. The inevitable discounting has the potential to stimulate new business, but there is no indication just how the market would respond to lower prices.
(PAL) has come a long way over the last two years, as it has renewed its fleet and rebuilt a global network. But the expansion has come at a cost. (PAL) incurred a net loss of nearly -USD300 million for the year ending March 31st, 2014.
Mr Ang has expressed confidence that (PAL) will be profitable in 2014, pointing out (PAL) was in the black in April 2014 and May 2014. But April and May are traditionally two of the strongest months for Philippine carriers. It will be challenging for (PAL) to remain in the black for the full year. (PAL)'s aggressive international expansion coupled with international expansion at Cebu Pacific (CEB) provides a difficult landscape, which will inevitably pressure yields and load factors.
Many strategic pieces to the puzzle remain elusive. (PAL) needs more partnerships to help support its expanded online network and efforts to build a more global offline network. While the Etihad (EHD) partnership is a step in the right direction, it is only a start.
Even more critically, as it seeks to expand its global reach, (PAL) needs one or more strategic partners which would provide network benefits as well as the capital required for further expansion. San Miguel is banking heavily on being successful in this mission. But the field of potential suitors is small and so far foreign airlines have shown few signs of making a move.
August 2014: (GE) Capital Aviation Services Limited (GECAS) (GEF) announced completion of a purchase-and-leaseback transaction with Philippine Airlines (PAL) involving a new Airbus A330-300 airplane.
(PAL), the flag carrier of the Philippines, operates a fleet of some 50 airplanes to more than >40 destinations.
2 A321-231s (6201, RP-C9910; 6253, RP-C9911), 2014-08, (GEF) LSD, and 1 A330-343E (1553, RP-C8764), ex-(F-WWYA).
September 2014: Philippine-based, San Miguel Corporation (SMC) has agreed to sell its 49% in Philippine Airlines (PAL) to the Lucio Tan Group (LTGroup), which currently owns 51% of (PAL).
The deal is reportedly worth $1 billion and leaves the (LTGroup) in control of (PAL).
Although no further detail was available from either party, the deal reportedly covers (SMC)’s indirectly held shares in the airline, equal to nearly half of the carrier, plus loans and advances, according to "Reuters."
"Reuters" also stated (SMC) has given Tan a week to raise the $1 billion, with about $800 million secured as loans from a syndicate of banks, and the remainder funded from Tan’s existing cash flow.
(SMC) bought its stake in the flag carrier from Tan for $500 million in 2012. The shares of both companies edged up in response to the news.
"Reuters" also quoted sources as saying that the (LTGroup) hopes to invite another investor in (PAL) later, allowing the group to repay part of its bank loans, which were guaranteed by shares in several Tan-owned companies, including Philippine Airlines (PAL).
Philippine Airlines (PAL) is the latest Southeast Asian airline to begin new services to Russia as the increasingly sanctioned country seeks alternative tourism.
Philippine Airlines (PAL) will install wireless in-flight entertainment on a further five Airbus A330s, as well as six A340s.
SEE VIDEO OF (PAL) 747 FAREWELL TO THE QUEEN OF THE SKY:
October 2014: All Nippon Airways (ANA) and Philippine Airlines (PAL) have signed a code share agreement, effective October 26 pending regulatory approval. The partnership will also link the carriers’ frequent flyer programs. The code share will include flights between Japan and the Philippines, as well as domestic routes at either end.
The partners will offer a combined 74 flights a week between the two countries, with the greater share operated by (PAL). (PAL) has flights from Manila to Fukuoka, Nagoya, Osaka, and both Tokyo airports, as well as a route from Cebu to Tokyo Narita Airport. (ANA) flies to Manila from both Haneda and Narita. Cebu Pacific Air (CEB) and Japan Airlines (JAL) also compete on Japan - Philippines routes.
Included in the code share are 19 of (ANA)’s domestic routes and 10 routes within the Philippines operated by (PAL).
(ANA) has confirmed it will not be investing in (PAL) as part of the deal. (JAL) had been discussing the possibility of a strategic investment in (PAL) last year, according to (PAL) executives, but the talks ended without result.
The two airlines decided a code share partnership was the best option after the investment talks finished. They have reportedly been discussing such an alliance for months. The code share was signed by a new (PAL) management team that took over, following business magnate Lucio Tan’s purchase of a larger stake in (PAL) in mid-September.
Separately, (PAL) confirmed it will launch one-stop service from Manila to New York (JFK) beginning in March 2015. (PAL) had previously signaled the introduction of this flight, but it was one of the planned routes that was placed under review by the new management team.
The New York flight will operate 4x-weekly with A340-300s, stopping in Vancouver. It will be (PAL)’s fifth USA destination, joining Los Angeles, San Francisco, Honolulu, and Guam.
After the (FAA) restored the Philippines to a category 1 safety rating in April, (PAL) executives immediately revealed their intention to expand in the USA market.
Philippine Airlines (PAL) may defer an order with Airbus (EDS) for at least some of the 46 airplanes it currently has on order from (EDS).
December 2014: News Item A-1: Emirates (EAD) says its third daily, Manila, Philippines flight is justified. (EAD) is hitting back at claims by Philippine carriers, that it is being allowed to operate too many flights in the important Philippines - Middle East market.
The United Arab Emirates (UAE) is seeking to hold a new round of bilateral air service agreement (ASA) talks with the Philippine Civil Aeronautics Board (PCAB) early next year.
The move follows the recent successful joint protest against United Arab Emirates (UAE) flag carrier, Emirates Airline (EAD) by Cebu Pacific Air (CEB) and Philippine Airlines (PAL), which resulted in the (PCAB) blocking (EAD) from selling unsanctioned Manila - Dubai tickets after December 26.
The new talks, which would likely update and expand the last (ASA) made between the two countries in 2012, could be held as early as January 2015. It could seek to reinstate (EAD)’s blocked schedule, or maybe increase overall flight numbers on the highly trafficked migrant worker route.
However, (PAL) and (CEB) have both spoken out against any new (ASA) talks between the two countries, stating that they “reiterate our appeal against holding a new round of bilateral air negotiations with the (UAE) in the near future.”
The (PCAB) decision to block (EAD)’s third daily flight, which was backed with a PHP 1.8 million/$40,000 fine on (EAD), which forced Emirates (EAD) to offer refunds or ticket transfers to passengers who had already booked flights after December 26, using “illegally sold tickets,” (CAB) Executive Director, Carmelo Arcilla said.
January 2015: Swiss-(AS) Maintenance Repair & Overhaul (MRO) software (AMOS) was adopted by 11 new customers in 2014, including Philippine Airlines (PAL), El Al Israel Airlines (ELA), and Aerolíneas Argentinas (ARG). Swiss-(AS) expanded +20% to >140 employees in 2014, and revenue grew +22%. It is developing a touch-optimized mobile package, (AMOS) mobile, which will launch modules for line maintenance in 2015.
March 2015: News Item A-1: Despite a slowdown in SE Asia’s more developed markets, the remote aviation market in Oceania is continuing to grow. In the coming months, new routes will be introduced in Papua New Guinea, East Java and the Solomon Islands.
National flag carrier, Solomon Airlines (SOI) will launch nonstop flights to Sydney from its Honiara base at the beginning of June. (SOI) currently offers 4x-weekly flights to Brisbane, and will add a single weekly direct flight to Sydney’s Kingsford Smith using an Airbus A320, from June 2.
Indonesian domestic carrier, Susi Air is also expanding, with plans to establish a new East Java hub at Trunojoyo Airport, in Sumenep, on Madura Island. The new location will stretch the coverage from Susi Air’s existing four hubs at Jakarta’s low-cost carrier (LCC) hub at Halim Perdanakusuma, Medan’s Kualanamu International, Balikpapan and Jayapura.
Since the recent management buyout from previous owners, Philippine Airlines (PAL) has begun expanding its network with a new nonstop flight from Manila’s Ninoy Aquino International to Papua New Guinea (PNG)’s Port Moresby airport.
(PAL), the Filipino flag carrier has applied for route permission from the Filipino Civil Aeronautics Board to take over unused schedules previously allocated to low cost carrier (LCC) Cebu Air (CEB), offering a 4x-weekly schedule. Currently, the route has only one carrier (Air Niugini (NIU)) offering direct flights with 3x-weekly service to Manila.
News Item A-2: Philippine Airlines (PAL) on March 15th resumed flights to New York after an absence of 17 years. (PAL) now operates 4x-weekly on the 13,700 km route between Manila (MNL) and New York (JFK) using an A340-300. Flights operate via Vancouver in both directions. New York becomes (PAL)’s 5th USA destination after Guam, Honolulu, Los Angeles, and San Francisco. (PAL) last served the New York region in 1997, when it flew to New York’s Newark Liberty Airport. The move to expand flights in the USA and Canada comes after the Philippines was restored to Category 1 status by the USA Federal Aviation Administration (FAA).
News Item A-3: Philippine Airlines (PAL) on March 20th introduced service on the 269 km route from Manila (MNL) to Tablas (TBH). Tablas is the largest of the islands that comprise the province of Romblon in the Philippines. The route will be served 3x-weekly with Dash 8-300s operated by (PAL) Express (PHP). Flights will operate on Wednesdays, Fridays and Sundays and face no competition.
News Item A-4: Avolon Leasing (AZV) delivered an A321 airplane to Philippine Airlines (PAL), which is (AZV)’s 6th airplane on lease to (PAL), comprising 5 A320 family airplanes and 1 A330.
April 2015: News Item A-1: Philippine Airlines (PAL) hopes to start a direct schedule to Auckland, New Zealand by year end, according to (PAL) President, Jamie Bautista, who said (PAL) is evaluating the service.
New Zealand and Filipino aviation authorities are implementing an updated air services agreement (ASA), which was signed in November 2014 as an update to a 2007 (ASA). The (ASA) was designed to allow Air New Zealand (ANZ) to code share flights to the Philippines through its new partner, Singapore Airlines (SIA), but would extend to cover direct (PAL) services if they are implemented.
“These new code sharing agreements will help develop the market and build momentum toward possible direct flights,” New Zealand Minister of Transport, Simon Bridges said. He noted that >40,000 Filipinos live and work in New Zealand, and make a “valuable contribution” to the country’s economy.
(PAL) currently has three unused weekly slot allocations at Auckland, but airport management would not confirm (PAL) is looking to take them up. It did, however, say it was “in discussions with a number of international airlines about the possibility of them flying to Auckland.”
(PAL) believes “the time is right for expansion,” given (PAL)’s +$13 million profit last year, reversed from a -$49 million loss in 2013. “Our encouraging performance in 2014 signals that (PAL) has now turned the corner,” Bautista said, adding (PAL) is committed to “consolidate and build on these gains to strengthen the foundation for future growth.”
News Item A-2: Philippine Airlines (PAL) is looking at either Airbus A350 or Boeing 787 airplanes as replacements for its aging A340-300 fleet. (PAL) says it will phase out its 6 A340s (average age 14.3 years) over the next 5 years.
May 2015: News Item A-1: Filipino flag carrier, Philippine Airlines (PAL) has posted a 1st-quarter net profit of +PHP3.8billion/+$85 million, up from a -$20.7 million net loss in the same quarter last year. Last year (2014), saw (PAL) register its 1st full year after-tax net profit of +PHP129 million to December after 3 years of losses, with its last full profitable year in 2010 - 2011.
(PAL) said 1st quarter revenues rose +30%, from $429 million in 2014 to $628 million in 2015.
Total operating expenses in were $55 6 million, +11% up year-over-year, mainly attributable to the increase in flights and increased passenger numbers that reached almost 3 million for the quarter.
(PAL) attributed the major turnaround to an overall increase in passengers on its new international routes, along with an expansion of its domestic network.
This was partly due to the lifting of (FAA) restrictions on Filipino carriers last year, allowing the airline to resume flights to New York in March, and to Quanzhou, China in April.
News Item A-2: Philippine authorities will subsidize landing and take-off charges at Mactan-Cebu International Airport (MCIA) to help stimulate international and regional traffic, and ease Manila’s chronically congested Ninoy Aquino International Airport.
Although the subsidies (-30% to -75% reductions for international and -30% to -65% for regional flights) will add to the airport’s pressure on its single runway and current facilities, its geolocation at the heart of the Philippines makes it highly attractive for transfer passengers traveling to secondary tourist and industry locations.
The airport’s 10,800 ft runway serves some 13 airlines operating just >150 daily airplane movements, although the airport saw a -2.1% drop in passenger numbers in 2014 from 67 million in 2013.
The rebate plan (which was initially slated initially for one year but may be extended) came as a result of discussions between carriers such as Cebu Pacific (CEB), Philippine Airlines (PAL) and AirAsia Philippines (APG), which are all increasingly using (MCIA) as a regional hub.
“This incentive program will benefit the entire airline ecosystem from local and national government down to airport ground handlers,” Mactan-Cebu International Airport Authority (MCIAA) General Manager, Nigel Paul Villarete said.
(PAL) recently reinstated schedules to Butuan, Bacolod, Cagayan de Oro, Iloilo, Davao, and Tacloban from Mactan, which had been mothballed in 2014. AirAsia (ASW) Group’s expansion of (MCIA) as a regional hub has seen it boost seat capacity from the airport to some 30,000 seats a week from only two-thirds that number in 2013.
News Item A-3: Philippine Airlines (PAL) is considering either Airbus A350 or Boeing 787 airplanes to replace its aging A340 fleet.
“We are in the process of preparing a long-term fleet plan for (PAL),” (CEO), Jaime Bautista said. “We have finalized our domestic and regional [plan], but for long haul we have yet to finalize our plan.” The Philippine flag carrier currently has both Airbus and Boeing wide body long-haul airplanes in service. It has 15 A330s and six 777s, which operate on Europe, Middle East, and USA routes.
Although likely set as replacements for several current A340 mid-distance routes (such as Manila to Thailand, Canada and China) both the A350 and 787 could be used on longer haul sectors with a much lower fuel burn.
In 2013, previous (PAL) owner, Ramon Ang mooted a 10- to 20-strong Boeing 777X purchase to replace the A340 fleet, but Bautista is said to favor the 787 over its bigger sibling.
June 2015: News Item A-1: The European Commission (EC) announced June 25th it has removed Philippines Airlines (PAL) and all Filipino Airlines from the European Union (EU) Air Safety List. The list names those nations, or carriers, that are barred from operating in (EU) airspace.
All Filipino airlines have been banned since 2010. “After 5 years of hard work, we are finally able to clear the airlines certified in the Philippines from the European Air Safety List,” (EU) Transport Commissioner, Violeta Bulc said.
“The Philippines is an important country with a sizeable and rapidly growing aviation sector. This result can serve as an example for other countries, which have difficulty to match their safety oversight capabilities with the growth of their industry.”
Bulc added that other countries were making “good progress” toward being allowed to fly to Europe once again, but did not specify them. No new airlines were added to the latest list.
Currently, airplanes from 20 states and 231 airlines are blocked from entering (EU) airspace because of concerns over their safety status.
These are: Afghanistan, Angola (with the exception of one airline that operates under restrictions and conditions), Benin, Republic of the Congo, Democratic Republic of the Congo, Djibouti, Equatorial Guinea, Eritrea, Gabon (except for 2 airlines that operate under restrictions and conditions), Indonesia (except for 4 airlines), Kazakhstan (except for 1 airline that operates under restrictions and conditions), Kyrgyzstan, Liberia, Libya, Mozambique, Nepal, São Tomé & Príncipe, Sierra Leone, Sudan, and Zambia.
Additionally, the list includes eight airlines subject to operational restrictions that can only fly to the (EU) with specific aircraft types: Air Astana (AKZ) (Kazakhstan), Afrijet (FRJ), Air Koryo (KOY) (Democratic People's Republic of Korea), Iran Air (IRN) (Iran), TAAG Angolan Airlines (ANG) (Angola), and Air Madagascar (MAD) (Madagascar).
The air carriers certified in Ghana that were on the Air Safety List have all been removed, after the (EC) received guarantees from Ghana that they no longer existed and that their airplanes had been removed from service.
News Item A-2: Philippine Airlines (PAL) begins 2x-weekly, Manila - Port Moresby in October, postponed from the original June schedule with Airbus A320-200 aircraft.
News Item A-3: (PAL) President & Chief Operating Officer (COO), Jaime Bautista says his airline is considering converting some of its outstanding A321neo orders into Long Range variants. (PAL), which has 30 of the type on firm order from Airbus Industrie (EDS), may use the type to expand its Australian market presence, Bautista told local media.
The A321neo LR is being touted as a replacement for the 757-200.
News Item A-4: (PAL) will beef up its fleet of 6 777-300ERs with the lease of +2 more during the course of next year. (PAL) President, Jaime Bautista said that their arrival would allow (PAL) to transition its Los Angeles and San Francisco operations to an all-777 operation instead of its current mixed service which also employs A340s.
The Filipino national carrier (PAL) is also looking to return its 6 recently acquired ex-Iberia (IBE) A340-300s.
Philippine Airlines (PAL) signed lease agreements with USA lessor, Intrepid Aviation (INL) for 2 777-300ERs during the Paris Air Show 2015 at Paris Le Bourget. Though no official delivery date has been set, previous reports have pointed to a possible 2016 arrival.
August 2015: News Item A-1: "Philippine Airlines (PAL) to Open New (LAX) Service" by (ATW) Jeremy Torr, August 11, 2015.
Philippine Airlines (PAL) plans to launch Cebu - Los Angeles (LAX) service from March 2016. In the new schedule, (PAL) will offer a 3x-weekly Airbus A340-300 flight from Mactan - Cebu International to (LAX).
(PAL) (COO), Jaime Bautista said the new service will give easier East Coast access to a wider range of Filipino travelers. “Customers have long clamored for direct flights between Cebu and the USA due to the travel convenience this will bring,” he said.
Since the (FAA) upgraded the Philippines to Category 1 last year, it has seen a surge in transpacific traffic. (PAL) now operates 14 weekly flights from Manila and Cebu to Los Angeles, as well as regular service to San Francisco and New York. This brings to number of USA-bound (PAL) flights a week to 33.
(PAL)’s leased 254-seat A340s have been given a boost by lower fuel prices, despite recent reports that (PAL) is looking to replace them with new Airbus A350s or Boeing 787s.
The move to Cebu has been boosted by the recent push for Mactan-Cebu to increase its international traffic. Filipino aviation authorities are offering up to -75% reductions on landing and takeoff fees at the airport in a bid to ease chronic overcrowding at Manila’s Ninoy Aquino International Airport (NAIA).
(PAL) recently moved some of its Manila - Los Angeles schedules from daytime slots at (NAIA) to night-time services, in part to avoid the increasing congestion there.
(PAL) has previously stated it could potentially open schedules to Miami and Chicago, both of which are home to large numbers of expatriate Filipino workers.
News Item A-2: "Filipino, Russian Carriers Look to Expand Market"
by (ATW) Jeremy Torr, August 28, 2015.
Following the signing of an upgraded air services agreement (ASA) between Russia and the Philippines, at least 5 carriers have flagged interest in operating new schedules between the two countries.
“We were able to come to an understanding that is mutually beneficial and that significantly expands cooperation between our countries,” said Philippines’ Transportation & Communication spokesman, Jose Lotilla.
Signed on August 3, the new (ASA) is an update on the original bilateral treaty signed in 2009 and could see new schedules start in time for the northern winter tourist season.
Russian carriers Aeroflot (ARO) and Transaero (TRX) have both applied for slots between Moscow and Manil. AirAsia Philippines (APG), Cebu Pacific (CEB) and Philippine Airlines (PAL) have also signaled that they want to start services to Moscow, Khabarovsk, and the expanding Vladivostok airport, and could expand to other destinations, including Yekaterinburg and Novosibirsk.
(PAL) is looking at flying to Moscow and Khabarovsk up to 5x-times weekly from both Manila and Cebu using Airbus A330-300s and A320s. Cebu Pacific (CEB) and AirAsia Philippines (APG) have said they are also interested in Moscow, but have also added the far-Eastern city of Vladivostok to their list using either Airbus A330 or A320 aircraft.
The sudden surge of interest in the new routes, reflects both the need for Russian tourists to find new destinations away from sanction-restricted Europe, and for Filipino tourist destinations to find value-hunting tourists looking for sunshine, away from the northern winter.
The Philippines immigration department has upped the visa-free stay time to 30 days, from 21, for Russian tourists to make it a more attractive destination, and although only 40,000 Russians visited the Philippines in 2014, the tourism board is confident that will rise with the new flight schedules.
September 2015: Philippine Airlines (PAL) will cut more than -110 ground staff from November as part of a cost-cutting exercise. The move comes on the heels of a surge in half-year profits, which returned a 1st-half net income of +PHP5.86 billion/+$122 million (up almost tenfold from the previous year’s figures).
The airline said it was making the cuts as part of a drive to “disengage from non-core services such as our ground-handling activities in domestic stations, which can be turned over to qualified third-party service providers.”
(PAL) said it will “continue restructuring its cost base to drive down unit costs and remain competitive.” (PAL) said it will continue to review staffing levels in areas such as airport support services and in-flight catering, which have already seen extensive outsourcing over the last 3 years.
(PAT) has cut some -2,600 jobs since 2011, and has extensively upgraded its fleet to new and more efficient Boeing 777-300s, Airbus A321s and A330-300s to compete with Cebu Pacific (CEB).
(PAL) (CEO) Jaime Bautista added that overall expenditure would also be trimmed from previous years with capital expenditures limited to maintenance and support equipment, but not major aircraft investments.
November 2015: Manila’s Ninoy Aquino International (NAI) Airport reported an estimated $2 billion loss in airline revenue and canceled >1,000 flights due to the recent geopolitical summit of Asia Pacific Economic Cooperation (APEC) leaders in Manila, Philippines.
Attendees at the 3-day (APEC) summit included China’s President, Xi Jinping, Russian Prime Minister, Dmitry Medvedev and USA President, Barack Obama. Security measures included sealing off one runway and closing many sections of airport facilities, resulting in the cancellation of hundreds of flights at the Philippines’ busiest and already congested airport.
A (PAL) spokesperson said (PAL) may have lost >$18 million as a result of some 700 flight cancellations to both international and regional/domestic schedules, and Filipino low-cost carrier (LCC) Cebu Pacific (CEB) said its losses could amount to around -$8.5 million.
Many flights were diverted to other airports in the region, including the old USA Clark Airbase, some 40 miles from Manila.
Regional (LCC) AirAsia Philippines (APG) canceled 10 international and 74 domestic flights; international carriers including Qatar Airways (QTA) re-routed some existing flights to Clark Airbase.
Additional disruption was caused by the security closure of other airport facilities. Manila International Airport Authority provided shuttle buses routed outside key airport areas to ferry passengers without needing to use sealed-off tarmac.
However, (PAL) spokesperson, Cielo Villaluna said, “We must stress, however, that the long-term benefits of (APEC) [summits] outweigh these losses.”
December 2015: News Item A-1: "Philippine Airlines (PAL) Expands into Oceania" by (ATW) Jeremy Torr, December 3, 2015.
Philippine Airlines (PAL) is adding 3 new international routes across Oceania with the launch of its 1st schedule to New Zealand via Cairns, Australia, and a new Papua New Guinea service from mid-December.
The addition of 3 new international routes within one month is part of what (PAL) (CEO) Jaime Bautista said is the result of a “robust investment climate and upsurge of business travel” within the Oceania region.
The Ninoy Aquino International (Manila) - Jacksons International (Papua New Guinea) schedule will commence its 2x-weekly service mid-December, using 136-seat Airbus A320 aircraft.
The Manila - Cairns - Auckland schedule launched December 2, and offers a 4x-weekly service using 156-seat Airbus A320 aircraft.
(PAL), the Filipino flag carrier described the new route as “a significant investment in our brand in this region and a noteworthy commitment to the Australia and New Zealand markets.”
Bautista said the new Manila - Auckland - Cairns schedule in particular recognized the expansion in passenger demand on the New Zealand route, with passenger travel from the Philippines to New Zealand increasing by +9.4% over the last 5 years, with +11.6% growth in the opposite direction.
On December 2 the inaugural A320 flight from Manila (MNL) to Cairns (CNS) departed the Philippine airport at 23:15 arriving in Australia at 07:30 on December 3. After that, the aircraft flew on to Auckland (AKL) in New Zealand. Cairns will be the latest addition to Philippine Airline (PAL)’s extensive route network that spans 37 foreign cities and 30 domestic points.”
(PAL) added that initial response from north Asian countries that could potentially link to the new destinations via Manila was also “promising.”
“It takes time to develop a new service, but we have confidence in the sustainable success of this new service,” said Ian Robinson, (PAL) spokesperson for Australia and New Zealand.
(PAL) currently serves Australian destinations Brisbane, Darwin, Melbourne and Sydney from its base in Manila.
News Item A-2: Manila’s Clark International Airport is targeting a maximum passenger capacity of 16 million passengers a year by 2022, up from 4 million currently.
Construction work on Phase 1 of the PHP15 billion/$318 million project will start in 2016, according to Clark International Airport Corporation (CEO), Emigdio Tanjuatco III.
He said the new terminal would be “a welcome development for the whole Clark community as well as for the entire country.” It comes on the heels of complaints from carriers such as United Airlines (UAL) over repeated diversions and delays at Manila's Ninoy Aquino International Airport (NAIA).
Initial work, which is due for completion in 2017, will add facilities that will handle up to +3 million extra passengers annually, Tanjuatco said.
The airport said Phase 2 of the project will expand capacity to an additional 5 million passengers a year.
This is the second development of the former US Air Force airbase, situated some 40 miles from central Manila. An $8.6 million upgrade of existing facilities was brought online in May, boosting current capacity to 4 million from 2.5 million passengers a year.
“We see Clark International Airport as a premier gateway," said Filipino Transportation Secretary, Joseph Emilio Abaya, adding the expansion of Clark is “part of the government’s development plans for the entire economic zone and region.”
January 2016: News Item A-1: Philippine Airlines (PAL) has launched its second new route of 2016 with the introduction of 3x-weekly flights from Manila (MNL) to Jeddah (JED), via Dubai (DXB). The inaugural flight on the 8,591 km route was on January 19. (PAL) will operate the route with its A330-300s. Saudia (SVA) already serves the market with 4x-weekly flights. These new flights will serve the needs of an estimated 300,000 overseas Filipinos based in Jeddah as well as travelers taking part in the Umrah and Hajj pilgrimages.
News Item A-2: Lufthansa Technik (DLH) (LTK) and Philippine Airlines (PAL) have signed a 5-year Total Component Maintenance contract for Airbus A320s and A340s and, after 2016, A320s. (DLH) (LTK) will support (PAL) in Manila, while Maintenance Repair & Overhaul (MRO) will be done in Hamburg and Shenzhen, China.
February 2016: Philippine Airlines (PAL) signed a memorandum of understanding (MOU) to purchase 6 Airbus A350-900s.
(PAL) said the planned order, valued at $1.8 billion at list prices and announced at the Singapore Airshow February 16, will enable it to replace aging A340s.
(PAL) plans to operate ultra-long nonstop A350-900 flights between Manila and New York. (PAL) will also use the aircraft to add capacity from Manila and Cebu to North American West Coast cities.
(PAL), which additionally took 6 A350-900 options, expects to begin taking delivery of the A350-900s in 2018. It will configure the aircraft with around 300 seats, +50 more than its A340s. Given the higher seating capacity, (PAL) President & (CEO) Jamie Bautista said the A350s will be both “replacement and growth aircraft.”
March 2016: "More (LCC)s Expand to Philippine-Asia Pacific Region"
by (ATW) Jeremy Torr, March 15, 2016.
As low-cost carrier (LCC) Cebu Pacific Air (CEB) launches its first service to a USA territory, Japan-based (LCC) Vanilla Air (VNL) said it also intends to expand across the Pacific region. In addition, Philippine Airlines (PAL) has also announced a new Saipan - Manila service.
All the carriers are increasing services on the strength of expanding tourism numbers across the Pacific region, and the attraction of a low-key entry to USA jurisdiction through Guam and Saipan.
Guam tourism spokesperson, Nathan Denight said the new (CEB) Airbus A320-based service offers a “new opportunity to further connect our island and serve as the gateway to Micronesia and other regions of the world.”
Describing its new Manila - Guam route as “another expansion path across the Pacific,” (CEB) confirmed it is committed to expanding operations across the region.
Concurrently, Philippine Airlines (PAL) (CEO) Jaime Bautista announced a new Saipan - Manila schedule to start from June 2016. The service will offer a 2x-weekly service using A320-200 aircraft (again a 1st to the Pacific USA territory for the airline, since it attempted a short-lived service to the island in 1990).
Also eyeing the Pacific market, Japan-based (LCC) Vanilla Air (VNL) plans to expand to destinations including Guam, Saipan and Cebu from its home base at Tokyo Narita. These will add to its current lineup of local destinations using “beyond rights,” by offering a one- or two-stop schedule via SE Asian countries. These could potentially include Singapore, Thailand, and Vietnam, from (4Q) 2016, if permissions are granted.
April 2016: Philippine Airlines (PAL) has signed an order for 6 Airbus A350-900s, plus 6 options. The contract confirms a memorandum of understanding (MOU) signed by (PAL) in February this year, and covers options on 6 more of the type.
(PAL) President & (COO) Jaime Bautista said the new aircraft, valued around $1.8 billion at list prices, would likely be used on nonstop flights to the USA, as well as on services to “new destinations in Europe.”
Deliveries are scheduled to begin in 2018.
(PAL), the Philippine flag carrier also placed a $600 million order with Rolls-Royce (RRC) for (Trent XWB) engines to power the 6 A350s.
“We are now defining the final layout for the aircraft,” Bautista said, noting the aircraft will use a 3 class layout with around 300 seats. Bautista said the aircraft would give (PAL) the ability to “fly nonstop on our longest sector from New York to Manila, all year round.”
(PAL) tabled expansion plans early in 2015, considering both the Airbus A350 and the Boeing 787 as contenders.
However, in February, Bautista gave indications the A350 was the favored choice, noting that “after a thorough commercial and technical evaluation, we decided the A350 will best meet [our] requirements.”
(PAL) said the A350 will become the flagship of (PAL)’s future long-haul fleet, and would reinforce its regional position, especially on long intercontinental routes.
August 2016: Aircraft connectivity specialist (SITA) OnAir and USA maintenance firm AeroMod have signed a rapid in-flight connectivity installation agreement, with Philippine Airlines (PAL) as the launch customer.
Under the agreement, AeroMod is equipping (PAL)’s Airbus A321s with (SITA) OnAir wireless in-flight entertainment (IFE), returning one aircraft per day to the airline. The installations began in July.
“In (PAL)’s case, this is happening locally to prevent disruption, with engineering teams flown to Asia. For future installations, the service can either happen at AeroMod’s dedicated facility or any pre-agreed location,” AeroMod said, adding that it can perform a complete fleet connectivity roll-out within a matter of weeks.
AeroMod relocated to a new USA headquarters in Melbourne, Florida in April. “Our new facility was designed to offer connectivity and (IFE) installations significantly faster than other Maintenance Repair & Overhaul (MRO) organizations,” AeroMod President, Gary Girard said.
According to AeroMod research, only 13% of non-USA airlines have wireless (IFE) fully deployed.
October 2016: News Item A-1: Intrepid Aviation (INL) reached agreement with Boeing (TBC) to cancel 2 of its 6 777-300ERs on order and instead take 2 747-8Fs in 2017 (subject to lease placement); 2 other 777-300ERs are being deferred to (1H) 2019 and 2 are being leased to Philippine Airlines (PAL) in (4Q) 2016.
"Boeing, Intrepid Leased 1st (PAL) 777-300ER"
by (ATW) Kurt Hofmann email@example.com, October 31, 2016.
Boeing (BCA) has delivered Intrepid Aviation (INL)’s 1st direct ordered Boeing 777-300ER, which will be leased and operated by Philippine Airlines (PAL). This 777 is the 1st of 4 777-300ERs ordered by (INL), the Stamford, Connecticut, USA-based lessor. “This 777 delivery to (PAL) underlines (INL)’s continuous focus on investment into new airplanes on long-term leases with established, strong airlines worldwide,” (INL) (CEO) Olaf Sachau said.
(PAL) plans to use the new 777s primarily on routes to North America. (PAL) is scheduled to take a 2nd 777-300ER from Intrepid before the end of the year. “The 777 has become our standard for passenger comfort, deployed on our long-haul routes,” (PAL) President & (COO) Jaime Bautista said. “It is the pivotal equipment that will propel us to our corporate vision of becoming a 5-star airline.”
News Item A-2: Philippine Airlines (PAL) signed a Letter of Intent (LOI) to order 12 Bombardier (BMB) 86Y-passenger Dash 8-Q400s.
February 2017: Philippine Airlines (PAL) is growing its domestic network from Clark (CRK), the former USA base which is located around 80 km NW of Manila. On January 30 (PAL) began a 4x-weekly service (Mondays, Wednesdays, Fridays and Sundays) on the 657 km route to Cebu (CEB) using its A321s. The 2 airports are already linked 4x-weekly by Cebu Pacific Air (CEB). (CEB) currently accounts for 45% of seat capacity in the domestic market followed by Philippine Airlines (PAL) (34.7%), AirAsia Philippines (APG) (11.0%) and CebGo (SRQ) (7.0%). (PAL) now operates a total of 40 domestic routes, of which 10 involve Cebu with 3 involving Clark.
March 2017: Philippine Airlines (PAL) on March 20 introduced service on the 269 km route from Manila (MNL) to Tablas (TBH). Tablas is the largest of the islands that comprise the province of Romblon in the Philippines. The route will be served 3x-weekly with Dash 8-300s operated by (PAL) Express. Flights will operate on Wednesdays, Fridays and Sundays and face no competition.
November 2017: Lufthansa Technik Philippines completed cabin modification on 8 A330-300s for Philippine Airlines (PAL), converting aircraft from all-economy to 3-class concept with 309 seats.
December 2017: News Item A-1: Philippine Airlines (PAL) launched 4 domestic links on December 1 from Cebu (CEB) to Camiguin (CGM), Del Carmen (IAO), Legazpi (LGP) and Ozamiz (OZC).
These were followed by the introduction of a service from Cebu to Bangkok Suvarnabhumi (BKK), Thailand on December 2. All of the domestic links operate daily and face direct competition from Cebu Pacific Air (CEB) subsidiary, Cebgo (SRQ). The average sector length on the new domestic routes is just 231 km. (PAL), the Philippines’ flag carrier will not experience any competition on its 2,552 km Bangkok Suvarnabhumi service.
News Item A-2: Philippine Airlines (PAL) took delivery of a Boeing 777-300ER on lease from Aviation (PLC).
News Item A-3: Bombardier (BMB) has Philippine Airlines (PAL) contract to provide Dash 8-Q400 component management support.
Click below for photos:
PAL-777-300ER - 1st 2016-10.jpg
PAL-777-300ER - 2013-11
PAL-A320 - 2013-07
PAL-A321 - 2013-08
PAL-A321 - 2013-08-A
PAL-A321 AND A330-300 - 2012-08
PAL-A350-900 - 2016-02.jpg
PAL-A350-900 - 2016-04.jpg
4 737-200 (JT8D), (PHP) LSD 2000-08.
2 737-3YO (CFM56-3B1) (1927-24680, /90 EI-BZL; 1929-24681, /90 EI-BZM; 1941-24770, /90 EI-BZN), (GEF) 5 YR LSD 2001-05, WET-LST (PHP). 24680 RTND 2004-02. 141Y.
3 737-3YO (CFM56-3B1) (1753-24464, /89 RP-C4010; 1755-24465, /89 EI-BZF; 1837-24677, /90 EI-BZJ), 141Y.
0 737-33A (CFM56-3B1) (2025-25033, /91 RP-C4008), EX-(IST), (TCI) LSD 2000-04. RTND, LST (CRM) 2006-04. 141Y.
1 737-332 (CFM56-3C1) (2488-25996, /93 RP-C4007), 12C, 102Y.
1 737-36N (CFM56-3C1) (2882-28559, /97 EI-CUL), EX-(HOL), (GEF) LSD 2000-03. 141Y.
1 +3 ORDERS 737-400 (CFM56-3), TO REPLACE A320 & 3 737-300'S, WHEN LEASES EXPIRE.
1 737-4S3 (CFM56-3C1) (2223-25594, /92 EI-CVO), EX-(MAS)/(AOF), (AFJ) LSD 2000-11, HAMILTON AV, AZ, FOR "C" MAINTENANCE CHECK, 164Y.
2 737-4YO (CFM56-3C1) (1841-24684, /90 EI-CVN; 2442-26081, /93 EI-CVP), EX-(PGS), (GEF) LSD 2000-11. 164Y.
1 747-2F6B (CF6-50E2) (425-21834, /79 RP-C8820), (ENT) LSD, 18F, 42C, 312Y.
2 747-211B (CF6-50E2) (326-21516, /78 RP-C8850; 368-21517, /79 RP-C8830), AMBOY LSD. 18F, 42C, 312Y.
4 747-4F6 (CF6-80C2B1F) (1005-27261, /93 RP-C7471; 1012-27262, /93 RP-C7472; 1039-27828, /94 N753PR; 1038-27827, RP-C8168, 2004-01), AMECO MAINT. 18F, 38C, 383Y.
1 747-469 (CF6-80C2B1F) (1068-27663, /95 N754PR), 32F, 40C, 326Y.
2 +2 ORDERS 777-300ER, AVIATION (PLC) LEASED 2017-12.
5 777-36NER (826-37709, RP-C7777, 2009-11 - - SEE PHOTO - - "PAL-777-300ER-2009-11;" 841-37712, RP-C7776, 2010-01), (GEF) LEASED. 370 PAX, 2 CLASS.
3 A319-112 (2884, RP-C, 2006-09; 2925, RP-C8601, 2006-11; 2954, RP-C8602, 2006-11) (GEF) LSD. 8C, 126Y.
1 A319-112 (3108, RP-C8603),2007-05. 8C, 126Y.
5 +5 OPTIONS A320-200 (CFM56-5B), 12C, 144Y.
1 A320-214 (CFM56-5B4) (936, RP-C3229, 2005-10; 1171, RP-C3230, 2005-12), (GEF) LSD. 936; RTND, LST HELLO (HLO) 2010-10. 12C, 144Y.
5 A320-214 (CFM56-5B4) (182), (708 DESTROYED 1998-03), (706, /97 RP-C3221; 745, /97 RP-C3223; 753, /93 RP-C3224, SEE INCDT IN 2007-10; 1063, RP-C3225, 2004-12), (SIL) LSD. 156Y.
7 A320-214 (CFM56-5B4) (3087, RP-C8604, 2007-04; 3187, RP-C8606, 2007-07; 3205, RP-C8607, 2007-07; 3273, RP-C8611, 2007-11; 3310, RP-C8610, 2007-11; 3455, RP-C8611, 2008-04; 3731, RP-C8615; 4415, RP-C8616). 4415 XFRD TO (PHP) 2010-09. 156Y.
2 A320-214 (CFM56-5B4) (1210, RP-C3231, 2006-01; 3107, RP-C8605, 2007-04), (GEF) LSD. 12C, 144Y.
2 A320-214 (CFM56-5B4) (2162; 2183), EX-(PRH), AFS INVESTMENTS LSD 2005-03. 12C, 144Y.
1 A321-200, (AZV) LSD 2015-03. 12C, 187Y.
2 +32 ORDERS A321-231 (6201, RP-C9910; 6253, RP-C9911), (GEF) LSD 2014-08. 12C, 187Y.
10 ORDERS A321neo:
8 A330-301 (CF6-80E1A2) (183, /97 F-OHZM; 184, /97 F-OHZN; 188, /97 F-OHZO; 191, /97 F-OHZP; 189, /97 F-OHZQ; 198, /97 F-OHZR; 200, /97 F-OHZS; 203, /98 F-OHZT), 48C, 230Y.
2 +20 ORDERS A330-343E (1475, RP-C8785; 1553, RP-C8794, 2014-08), ex-(F-WWYA, F-WWYQ) 2013-12.
5 A340-313X (CFM56-5C4) (173, /97 F-OHPJ; 176, /97 F-OHPK; 187, /97 F-OHPL; 196, /97 F-OKPM; 302, RP-C3435, 2013-06), 12F, 32C, 220Y.
6/6 ORDERS (2018-02) A350-900 (TRENT XWB):
0 F 50 (PW125B) (20201; 20202) ST DENIM AIR 2000-09.
9 ORDERS BOMBARDIER DASH 8-Q300, 50Y.
6 BOMBARDIER DASH 8-Q400, EX-(SAS), 86Y.
12 ORDERS BOMBARDIER DASH 8-Q400, 86Y.
Click below for photos:
PAL-DR LUCIO TAN - 2011-05
PAL-JAIME BAUTISTA - COO
DR LUCIO TAN, CHAIRMAN (SAN MIGUEL BEER & TOBACCO MAGNATE, MAJORITY OWNER (51%)).
RAMON ANG, PRESIDENT & (COO), SAN MIGUEL & PHILIPPINE AIRLINES (2012-06)).
JAIME BAUTISTA, PRESIDENT & CHIEF EXECUTIVE OFFICER (CEO), PHILIPPINE AIRLINES (PAL).
Jaime was previously Chief Operations Officer (COO), ex-(PAL) Express (PHP).
PETER FOSTER, CHIEF COMPANY ADVISOR (1999-03).
BARRY GREEN, CONSULTANT TO (CEO) FOR MAINTENANCE & ENGINEERING (1998-07).
HENRY UY, EXECUTIVE VP COMMERCIAL GROUP.
ANDREW HUANG, SENIOR VP & CHIEF FINANCIAL OFFICER (CFO).
CAPTAIN JULIO HERNANDEZ, SENIOR VP FLIGHT OPERATIONS.
ISMAEL AUGUSTO GOZEN, SENIOR VP AIRLINE OPERATIONS.
DAVID LIM, SENIOR VP COMMERCIAL GROUP.
CAPTAIN JOHNNY ANDREWS, VP FLIGHT OPERATIONS (MNLOYPR),
CAPTAIN ALFREDO JULIANO, CHIEF PILOT 747-400.
CAPTAIN EDGARDO DIAZ, CHIEF PILOT 737.
CAPTAIN REUBEN STERNBERG, VP SAFETY & ENVIRONMENT (MNLNZPR)
VIC TUAZON, VP AIRCRAFT ENGINEERING, (MNLMZPR),
CESAR LAMBERTE, VP HUMAN RESOURCES (HR).
RIA DOMINGO, VP MARKETING.
FELIX CRUZ, VP MARKETING SUPPORT.
CEASAR RONNIE ORDOYO, VP SECURITY.
LUISITO NOPUENTE, ASSISTANT VP AIRCRAFT MAINTENANCE (2000-04)
RAY TALAVERA, ASSISTANT VP AIRWORTHINESS MANAGEMENT (2000-09).
MRS ZENAIDA SAN GABRIEL, ASSISTANT VP ENGINEERING MANAGEMENT
(firstname.lastname@example.org) (MNLMUPR) (2000-09).
NICASIO GABRIEL, ASSISTANT VP FLEET MANAGEMENT (2001-10).
MANUEL DEL MUNDO, DIRECTOR TECHNICAL SERVICES.
W FERRER, DIRECTOR QUALITY.
LUIS NOPUENTE, OFFICER IN CHARGE (OIC) AIRCRAFT MAINTENANCE (1999-10).
PARIS CABALLES, (OIC) ENGINEERING DIVISION (1997-09).
ABRAHAM REYES, MANAGER LINE MAINTENANCE (2000-04).
VICTOR DE LOS SANTOS, MANAGER BASE MAINTENANCE (1999-07).
BOB ATUTUBO, MANAGER MAINTENANCE CONTROL (1996-07).
JOSEPH BERNARDO, MANAGER TECHNICAL SERVICES (MNLEZPR),
LUDEL AQUINO, MANAGER BOEING FLEET (2000-09).