Philippine Airlines stated it expects “dark clouds” ahead, following a 12% decline in 1Q2009-10 revenue, attributed to the swine flu outbreak and global financial downturn (BusinessWorld, 24-Sep-09). The carrier expects similar falls in 2Q2009/10, stating it is “facing the spectre of extremely weak passenger traffic and cargo demand amid the protracted world economic meltdown". As a result, the carrier plans to establish new initiatives to further cut costs and hopes to improve revenues through reconfigured aircraft and an upgraded website. The carrier also plans to outsource or spin-off catering, passenger handling, ramp handling and cargo handling operations from 15-Nov-09.
Philippine Airlines expecting “dark clouds” ahead
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Philippine Airlines Part 3: more USA growth planned, as A350s arrive and partnerships are pursued
Philippine Airlines (PAL) is seeking to improve its position in the North American market by boosting capacity and partnering with a US airline. PAL has been able to increase its presence in the US since the FAA upgraded the Philippines to a Category 1 safety rating in 2014, enabling PAL to increase capacity, launch new routes and pursue codeshares with US airlines.
PAL launched services from Cebu to Los Angeles in Mar-2016 and in the coming weeks is planning to add capacity on Manila-Los Angeles – one of its largest and most profitable international routes – using a newly delivered 777-300ER. PAL may also add capacity to San Francisco in 2017 and is planning to use its new A350-900 fleet to launch nonstop flights to New York, and potentially Chicago, in 2018.
PAL also has begun searching for a US partner to help it feed an expanded US operation. Securing a US partner is key to supporting further growth and further boosting its share of the Philippines-US market as competition intensifies.
Philippine Airlines Part 2: more expansion to Australia and China as A321neos arrive in 2017
Philippine Airlines (PAL) is planning more international growth over the next year or two with a focus on Australia, China, the US and potentially Europe. Nonstops for Brisbane and more capacity for Sydney are in the pipeline for Australia, while in the Chinese market PAL is looking to launch Chengdu.
In Europe PAL is considering adding a second European destination in 2018, with Frankfurt and Rome under consideration. PAL has already added capacity to Europe this year by upgrading its London Heathrow service to daily.
This is the second in a series of analysis reports on the Philippines market. The first report focused on PAL’s Middle East operation, which could be reduced in 2017 amid intensifying competition and weakening demand.