Bernard on what it takes to run an airline
PAL group adviser says the vital part is the commercial aspect of the business
PETALING JAYA: From Airasia, Malaysia Airlines and now Philippines Airlines (PAL), Datuk Bernard Francis has come a long way in his involvement in low cost to premier airline business.
To him, the most important thing about running an airline is the commercial aspect of the business as it involves network planning.
Correctly done, it can yield the revenue an airline needs for sustainability.
“To run an airline you need to understand the commercial side of the business. Start with network planning as to where you can fly and which routes, as that decides the yields and revenue and then create a business plan.
“It is not just about putting in or fixing it with numbers, you need to have a solid business plan and focus on the core strategy,’’ Bernard, the chief commercial group adviser of PAL said in an interview.
He added that as “a head of commercial, you need to lead as there are many departments that have skill sets, be it sales, marketing, distribution and e-commerce but you need to bring them all together and work on a single goal, which is to fly passengers and make money.’’
Since joining PAL in October 2017, the core strategy he helped craft was for the airline to be the gateway to the Us/canada for South East Asia (SEA) and vice versa.
“We now control 20% of the market share for flights between Us/canada and SEA, and we have a larger share of that market than even Singapore Airlines,’’ Bernard said.
It helps as four million Filipinos live in the United States and they travel to and from the Philippines but increasingly, according to Bernard, travellers from South-east Asia (SEA) are opting for PAL for their connectivity to the Americas.
“We have the most number of direct flights and that is why we offer the fastest travel time from SEA to the USA’’ he adds.
He said PAL now flies 17 times (x) weekly to Los Angeles from 10X previously, 7x to 14x to San Francisco, 4x daily flights to New York, and daily flights to Toronto Vancouver,
Honolulu and Guam.
“Our marketing is so intensive as we go into markets and stimulate demand. I lead the team with a clear winning strategy and we track our performance daily. Our focus is that whatever we do it must produce results. If it is not working we stop, re-strategise and then move on,’’ he adds.
To do all that “we need to understand the dynamics of the airline industry, the demand patterns and the so-often easy way is to dump fares to fill aircraft. But for an aircraft to break even we need a portfolio of passengers who pay for value, pay for service quality and corporate travellers. So we need to segmentise better and create demand.’’
Going forward, PAL plans to add more destinations such as San Diego, Chicago and Seattle to expand its Us/canada route map. It is on a pursuit to further expand its destinations in Asia.
“PAL will continue to provide the biggest connection from SEA to Us/canada,’ he says.
As at the end of last year, the airline carried over two million passengers year-on-year and its revenue rose 15% from the previous year. PAL recorded the highest growth in RASK (revenue per seat kilometre) versus others in the region.
“When I joined, our focus was on branding, the need for brand presence in all markets, so we market ourselves as a value-based airline with good product and customer service experience.
“It is clearly a winning strategy as our passenger loads went up to 82% at the end of 2018 from 70% in 2017, and that was without diluting our yields. In fact our yields were also up by 2%, RASK was also up by 11% and revenue rose by 15%,’’ Bernard said
This year the focus is to maintain loads at about 82% and grow the revenue by a further 10% while maintaining the cost. Thus far, the progress has been encouraging given the number of flights that have taken off.
Bernard said PAL was accorded the “world’s most improved airline award’’ rating by Skytrax for 2019 as it achieved its biggest leap in product and service quality.
PAL has 92 aircraft in operation with an average fleet age of five to six years.