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- PNB Financial Center Pres. Diosdado Macapagal Avenue CCP Complex, Pasay City
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Based in Manilla, Philippine Airlines (PAL) is the national carrier of the Philippines. With hubs at Ninoy Aquino International Airport and Mactan–Cebu International Airport, PAL uses a fleet of narrow and wide-body Airbus, Boeing and Bombardier aircraft to operate a network of services within the Philippines as well throughout Asia, North America, Australia and the Pacific.
Location of Philippine Airlines main hub (Manila Ninoy Aquino International Airport)
Philippine Airlines share price
901 total articles
Boeing and Philippine Airlines transport 20 tons of aid to the Philippines with 777 delivery service
58 total articles
The Philippines-Japan market is poised to see a huge influx of capacity, driven primarily by expansion from Philippine low-cost carriers. The expansion is made possible by a new air services agreement between the two countries and the lifting of restrictions by Japanese authorities on Philippine carriers.
Cebu Pacific Air, which currently only serves one destination in Japan with three weekly flights, is seeking the biggest expansion with at least 80 additional weekly flights and eight new destinations. AirAsia is planning to enter the Philippines-Japan market with 32 weekly flights while Tigerair is looking to enter with 56 weekly flights.
Philippine Airlines (PAL) and its regional subsidiary PAL Express are seeking to add 63 weekly flights. PAL is currently the market leader with 31 weekly flights to Japan. In the total there are currently only 76 weekly flights between the two countries, a figure which should quickly double and possibly triple depending on how many of the proposed new flights are implemented.
AirAsia is attempting to turn around its struggling operations in the Philippines by closing its base at Manila alternative airport Clark and focusing on expansion at Manila Ninoy Aquino International Airport using slots held by new partner Zest Air. AirAsia is also seeking approval for Zest to adopt the AirAsia brand, giving the LCC group two carriers in the Philippine market but a single product.
AirAsia has struggled in the Philippine market since it launched Philippines AirAsia in Mar-2012. The new affiliate’s base at Clark has been highly unprofitable with limited growth opportunities.
Shifting focus to Manila significantly improves AirAsia Group’s outlook in the Philippines. But AirAsia will still need to overcome intense competition from market leader Cebu Pacific, which has a much stronger position at Manila, as well as the Philippine Airlines Group and Tigerair Philippines.
Philippine Airlines (PAL) is planning to launch services to London in early Nov-2013, the first step in an ambitious plan for resuming flights to Europe. PAL has secured Heathrow slots but the flight times are not ideal as they do not support connecting services, which the carrier will likely need to sustain the new route.
PAL will face intense competition from several carriers in the Manila-London market as well as in planned new services to continental Europe. While PAL will be the only airline offering non-stop service between the Philippines and Europe, the market is well served on a one-stop basis by several Asian and Gulf carriers.
PAL announced on 17-Sep-2013 that London Heathrow will be its first European destination since 1998 with flights beginning on 4-Nov-2013. The Manila-London Heathrow route will initially be served with five weekly frequencies using 777-300ERs.
Bilateral agreement differences are providing a check on the launch of services to Australia by Philippine low-cost carrier Cebu Pacific, which is interested in serving Melbourne and Sydney using its new fleet of A330-300s. The differences between Australian and Philippine authorities on an extension to their air services agreement is frustrating Australian airports, which have seen medium/long-haul low-cost carriers drive international traffic growth in recent years.
Cebu Pacific would be the fourth medium/long-haul LCC to operate international services to/from Australia, joining AirAsia X, Scoot and Jetstar. The rapid expansion of AirAsia X in Australia, where the Malaysian carrier will become by the end of 2013 the fourth largest foreign carrier, was analysed in the first part in this series of reports on the Asia-Australia market.
The Philippines is a much smaller market for Australia than Singapore or Malaysia. But there is potential for significant growth, particularly if a new LCC can enter, stimulating demand in a market which is highly price sensitive.
Asian airline costs and efficiencies vary widely. Compared to Europe, the region is home to efficient LCCs like AirAsia, which on a stage length-adjusted basis is more efficient than Vueling or easyjet – but perhaps not Ryanair. Thai Airways is the most efficient of the major full-service Asian airlines, but it is not much more efficient than Finnair, one of Europe's leanest carriers. But Thai is certainly more efficient than many of Europe's full-service airlines, which have similar costs and stage lengths, unlike Asia's full-service carriers that occupy a wide spectrum. At the top end is Japan's All Nippon Airways, which rivals SAS' costs – Europe's most expensive major airline.
These are some of the findings from CAPA's examination of Asian airline costs. Geography and local labour costs only partially dictate total airline costs: three Japanese airlines are the most expensive in this sample. Yet Japan's independent LCC, Skymark is cheaper than any Chinese carrier while one of Asia's most efficient full-service airlines – Singapore Airlines – is from a country with a cost of living closer to the West than other parts of Asia. Many of Asia's full-service airlines need to shape up – and LCCs need to maintain cost discipline for when the cost gap is inevitably narrowed.
ANA looks for international acquisition: talks with Philippines Airlines productive but not end game
Japan's All Nippon Airways (ANA) is flush with funds and looking to acquire foreign carriers as part of a three-pronged growth strategy to counter Japan's declining economy and population. But marriages are seldom consummated without a decent period of courting. ANA has quietly flirted with Indian carriers and is now whistling sweet tunes to Philippines Airlines (PAL), which is looking for foreign airline investors. That fact was confirmed by none other than PAL part-owner San Miguel Corporation, perhaps looking to leverage that news with other potential buyers.
But the possible synergies between ANA and PAL are few. PAL has contentiously exited the Philippines' key low-cost segment and its long-haul ambitions will be challenging given the competition, its lack of geography or scale for connecting traffic, and a low profile without a global alliance or numerous partners. As ANA continues to search for what would be one of Asian aviation's few major cross-border acquisitions, more flirting should be expected.
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