Philippines-Middle East market: Philippine Airlines resumes expansion as Cebu Pacific Air retreats

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Philippine Airlines (PAL) is resuming expansion to the Middle East after adjusting its strategy for competing in the intensely competitive Philippines-Middle East market. The flag carrier is introducing business class on all Middle East routes after serving the market for nearly four years with all-economy aircraft.

PAL will be operating 33 weekly nonstop flights to seven destinations in the Middle East in Dec-2017, compared to 24 weekly nonstop flights to four destinations in Dec-2016. Seat capacity will be up 22%.

PAL will need to overcome intensifying competition from Middle East airlines, which will be operating 101 weekly flights to the Philippines in Dec-2017, compared to 76 frequencies in Dec-2015. PAL has benefited from Cebu Pacific's recent suspension of three Middle East routes but the LCC's decision to cut capacity to the region highlights how difficult it is for a Philippine carrier to be profitable in the Middle East market.

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