PAL said to expand int’l network in next 2 years
PHILIPPINE Airlines (PAL) is planning on expanding its international network further in the next two years, according to the Center for Asia Pacific Aviation (CAPA), adding more flights to Australia, China, the US and Europe.
In its report dated Nov. 30, the aviation think tank said PAL is looking into nonstop flights for Brisbane and adding capacity for Sydney. The flag carrier is also said to be planning a Chengdu route in China.
In Europe, CAPA said PAL is also considering adding a second European destination in 2018, with Frankfurt and Rome under consideration.
“PAL has been able to improve its profitability, despite the rapid international expansion — an accomplishment that was a primary factor in being selected for the CAPA Asia Pacific 2016 Airline Turnaround of the Year Award,” it added, noting that listed PAL Holdings returned to profitability in 2014 after three consecutive years of losses.
PAL Holdings turned a record profit in 2015 and is again on course to deliver a profit for the full year in 2016.
PAL currently serves 43 international destinations, including 20 regionally within East Asia, 10 in Australasia and the Pacific, seven in the Middle East, five in continental North America and one in Europe.
CAPA said the airline of taipan Lucio C. Tan has launched 19 of these destinations over the past four years, including seven in the Middle East, six in Australasia and the Pacific — Australia, New Zealand, Papa New Guinea and Saipan — three in East Asia, two in North America and one in Europe.
This year, PAL added four international destinations, namely Doha, Kuwait, Jeddah and Saipan. PAL also launched services from Cebu to Los Angeles in March 2016, and a new fifth freedom sector from Taipei to Osaka last June.
Citing a Nov. 15 interview with CAPA TV, the think tank said PAL President and Chief Operating Officer Jaime J. Bautista said the carrier plans to add capacity to its existing Chinese destinations and is looking at Chengdu as its next destination with service from Manila potentially launching in 2017.
“We are looking at Chengdu as a new destination in China,” Mr. Bautista told CAPA TV. “We are also looking at more charter flights from other cities in China to secondary cities of the Philippines like Kalibo, Puerto Princesa and Bohol. We want to fly more tourists from China. We are very optimistic [with] the Chinese market.”
CAPA noted that PAL is still a “relatively small player” in China with less than 11,000 weekly seats, but is the market leader, capturing almost a 30% share of total scheduled seat capacity between the two countries. PAL launched a Guangzhou flight in 2013 and Quanzhou in 2015, giving it five Chinese destinations along with Beijing, Shanghai and Xiamen.
“PAL is keen to maintain its market leader status as demand soars, driven by new and much friendlier China-Philippines relations that are expected to lead to a surge in inbound demand. Inbound visitor numbers from China are expected to quickly surpass one million, compared to less than 500,000 in 2015,” its report said.
CAPA said China now accounts for less than 6% of PAL’s international seat capacity, with Japan and South Korea as the carrier’s largest markets and bigger source markets for the Philippine tourism sector but “China has huge growth opportunities.”
The report further noted that Hong Kong is PAL’s third largest international market followed by the United States, the United Arab Emirates and Singapore while China is now PAL’s seventh largest international market.
PAL Holdings saw a net loss of P2.009 billion in the quarter ending September from a P251.257-million income during the comparable period in 2015, its quarterly report showed, which the company attributed to stiff competition and the “lean season” for the airline industry.
PAL, nonetheless, still posted a profit in the nine-month period, recording a P2.599-billion net income in first nine months of 2016.
Shares in the company closed at P5 apiece, up 10 centavos or 2.04% from its previous close of P4.90. —