Philippine Airlines Group to step up competition against Cebu Pacific with new long-haul LCC

The Philippine Airlines (PAL) Group is looking at launching a low-cost long-haul operation, potentially in 2013, as part of the Group's revised two-brand strategy. Allocating some of PAL's newly acquired A330-300s to its budget brand will help the Group stay competitive with archrival Cebu Pacific, which is planning to launch its own low-cost long-haul operation in mid 2013. A long-haul operation from AirPhil/PAL Express would also allow the Group to re-enter markets in the Middle East, which it has dropped in recent years and is the main target for Cebu Pacific's new A330 operation.

PAL Group sources say AirPhil Express, which is currently awaiting approval to be rebranded as PAL Express, is expected to receive several of the A330-300s PAL ordered in Aug-2012 for delivery from 2013. Sources say the aircraft will be operated in all-economy configuration and likely be used initially on routes between Manila and destinations in the Middle East.