PAL plots return to full fleet, sees continued profit in 2023

Flag carrier Philippine Airlines (PAL) plans to redeploy all 75 of its aircraft back into service by the end of the year to raise its passenger count and keep its operations profitable.

In an interview with reporters, PAL president and chief operating officer Stanley Ng said the Lucio Tan-owned airline expects to spend almost double for capital expenditures in 2023, although no exact figures were given how much the budget for the year would be.

Bulk of the capex would go for the maintenance, repair and overhaul of aircraft, as PAL aims to reactivate its full fleet of 75 units within the year.

PAL vice president for network planning Christoph Gaertner said the airline operates 68 aircraft in its fleet at present and plans to redeploy an additional seven units mainly for Chinese routes. In particular, Gaertner said PAL will reactivate Airbus A320s and A321s back into service, as it looks to boost its long haul flights moving forward.

As such, PAL expects to close the year with a 40 percent increase in flight volume. The airline targets to grow its passenger traffic at the same rate, banking on the so-called revenge travel as many trips were called off due to the pandemic.

According to the Civil Aeronautics Board, PAL flew more than 9.2 million passengers last year, in which 5.85 million went to domestic destinations and 3.35 million headed to foreign routes.

With this, Ng expressed optimism that PAL will keep its head above water in 2023, especially as demand for air travel appears unfazed by economic challenges such as rising inflation.

Awaiting full year data, PAL recorded a profit of P6.76 billion from January to September 2022, reversing its net loss of P21.83 billion during the same period in 2021.

Ng said a preliminary look at PAL’s performance in the first quarter of 2023 signals that it is headed for a year in profitability. The carrier has come a long way from the breakdown it suffered at the height of the pandemic, he said.

In 2021, PAL filed for Chapter 11 bankruptcy protection in a New York court to clear more than $2 billion in outstanding debt. The restructuring compelled it to decrease its fleet by 25 percent to 70 aircraft and to infuse $505 million in debt financing from majority shareholders.

Ng said the future looks bright for the flag carrier, with load factors of as high as 90 percent for US flights and 85 percent for domestic services.

For 2023, PAL will expand its Mabuhay Lounge for international departures at Terminal 1 of the Ninoy Aquino International Airport; launch a new port to door service for last-mile delivery; and introduce new routes, the first of which is Manila to Perth in Australia.