Over the medium term, Philippine Airlines (PAL) targets to be one of the best in the world, with a five-star rating, from being a three-star today, as it focuses on a handful of American cities, beefs up both international and regional destinations via code-shares and expand in the local market.
At the same time, the flag carrier is eyeing to find a strategic partner within the next three years after parting ways with San Miguel Corp.
Next year, its 74th year of operations, PAL is re-launching its Manila-New York service after a 20-year absence and “This time, we’ll be back for good,” announced PAL President Jaime J. Bautista yesterday.
PAL first flew to New York in 1996 but suspended its service after a year because of Category 2 restrictions.
Today, the flag carrier is optimistic about its prospects in New York, with a potential of half a million Filipino passengers.”If we get just 30 per cent of this, we will be very successful indeed,” he pointed out.
Some 250,000 Filipinos live in New York; 90,000 in East Virginia; 75,000 in Washington DC and 31,000 in Philadelphia. Filipinos in the East Coast account for 15 per cent of the 3.4 million Filipinos living in the US, a natural base market for PAL.
Hence, the flag carrier is focusing heavily on the American market to take advantage of its upgrade to Category 1 status.
On top of its four times weekly service between Manila and New York starting March 15, 2015, PAL is increasing its flights to San Francisco and Los Angeles, California, as well as Honolulu and Guam
From five times a week in Honolulu and four times a week in Guam, it will now operate daily flights in both destinations.
Its European service will be focused in London while it has deferred plans for Manila-Rome and Manila-Paris.
PAL has also deferred plans for a number of its Middle Eastern services.
“We deferred Manila-Doha because of the low passenger traffic. In Jeddah, we can’t have the time slot we want. We’re being given a 4 a.m. departure time. In Abu Dhabi, we wanted to operate daily but we can only operate four times weekly.”
Likewise, “We want to operate daily in Dubai but we can only have five times a week. We want to fly to Riyadh, but we can’t have the additional flights we want,” Bautista explained.
However, the eight planes initially planned for use in the Middle East will be used to fly to profitable destinations, he added.
Anyway, PAL can expand its presence in other parts of Europe, the Middle East and even in the East Coast of the US via its code share arrangements with Etihad.
In Japan and other parts of the Asian region, PAL can also expand its presence via its code share arrangements with All Nippon Airways.
“This is the trend in the industry, expanding your routes by code shares, joint ventures and other programs of cooperation,” he pointed out.
In the next three years, PAL targets to have a strategic investor who will “preferably be an airline or a company with investments in airlines”.
While the airline does not need additional equity right now, “We will require equity infusion as we expand in the future,” the president acknowledged.
To be ranked five-star, PAL, “We have to improve our service. We need a good fleet, on time performance and cabin service at par with other five-star airlines. It will take a lot of work.”
Meanwhile, PAL plans to increase its London frequency to daily from the current five times a week following the good reception it has received when it opened the route a year ago.
This as PAL president and chief operating officer Jaime B. Bautista told Manila Bulletin that the flag carrier has recently obtained approval to “over fly” Russian airspace.
The “Russian over fly” will reduce substantially the travel time going to Europe, Bautista said.
“It will be cost effective as it will cut travel time going to Europe,” he said.
Increase in frequency is also aimed to service the growing demand of UK-based Filipinos as well as tourists between the two countries.
Also, Bautista disclosed PAL is launching its New York frequency middle of March next year. The route will have an hour stopover in Vancouver with New York as the final destination.
Source: The Manila Bulletin, Emmie Abadilla