Airline News
PAL to slow fleet and network expansion
November 11th 2014
Less than two months after regaining control of Philippine Airlines (PAL), chairman Lucio Tan and president Jaime Bautista have silenced most critics that doubted their ability to take over the airline once again. Read More »
Bautista has confirmed that PAL is in talks with Airbus regarding the deferral of upcoming deliveries in 2015 and beyond, but said the airline will accept the remaining deliveries in 2014 including three A321s and three A330s. He also announced that a decision on additional and replacement long-haul aircraft will be postponed until further notice as Lucio Tan’s LT Group gradually resumes full control of the carrier.
PAL is also stalling its network expansion plans, which initially saw it add up to four new European and North American destinations next year. For the time being, Bautista told the Philippine Flight Network, it will only go ahead with re-launching New York in March, while in Europe the focus will be on improving the performance on the Manila – Heathrow route, which is still unprofitable although load factors and yields have improved after an abysmal start.
To this end, PAL has reduced capacity on the route by replacing the B777-300ER with an A340-300. It has also finally been able to obtain fly-over rights from Russia, which will significantly shorten the flight time on the route and save fuel.
In a recent meeting with CAPA – Centre for Aviation, Bautista said he expects PAL will no longer pursue plans for further expansion in Australia as services to Brisbane and Darwin have been unprofitable and might be axed, following PAL’s earlier withdrawal from the Perth route.
Bautista further offered that PAL is presently hounded by overcapacity in the Middle East, dampening previous speculation that it might open a new service to Jeddah.
Bautista’s remarks echo those of low-cost competitor Cebu Pacific Air, which recently told This Week in Asia-Pacific Aviation that its newly-launched “services to Dammam, Riyadh and Jeddah are performing rather badly so far.”
