PAL to beef up US service with 777, A350 jets

PHILIPPINE Airlines (PAL) will renew its long-haul fleet with two new Boeing 777-300ERs and four to six new-generation widebody aircraft — most likely Airbus A350-900s — in a bid to cement its position in the North American market ahead of rival Cebu Pacific, the Center for Asia Pacific Aviation (CAPA) said in a report released over the weekend.

At the June 8 annual general meeting of the International Air Transport Association in Miami, CAPA said PAL told it that the airline “recently committed” to leasing the new 777-300ERs for delivery in 2016 in the same 370seat configuration as the existing six 777-300ERs.

“PAL will most likely use the two additional 777- 300ERs to transition Los Angeles and San Francisco to an all 777- 300ER operation,” the report read.

PAL flies both 777-300ERs and A340- 300s for its Los Angeles and San Francisco routes.

In a mobile phone reply to a BusinessWorld query seeking confirmation of the CAPA report, PAL’s Mr. Bautista said: “Yes, we will add two B777-300ER to our fleet in 2016 and we are evaluating the possible addition of up to six new generation aircraft of B787 or A350 from 2017 to 2020.”

CAPA said the carrier is also “considering” using the additional 777- 300ERs on the Manila-Vancouver-New York route launched in March 2015, “but if this was pursued it would not also be able to upgrade all its Los Angeles and San Francisco flights.”

“Providing a uniform product in the California market would be logical and could help boost sales,” the report read, noting that Los Angeles and San Francisco are PAL’s two largest international markets.

A350-900 JETS

In addition, PAL, by CAPA’s reckoning, is “looking to acquire” four to six new-generation wide-body aircraft for delivery between 2017 and 2018, which would allow the airline to expand its network in North America and Europe, as well as operate additional frequencies to its six existing longhaul destinations.

This move is aimed at strengthening its hold on the North American market, as “PAL will eventually face competition in this key market against Cebu Pacific, which is now looking at acquiring A350s to serve the west coast of North America.” It will also “improve” PAL’s long-term position in the Philippine long-haul market as competition intensifies.

“The A350-900 has emerged as the strong favorite as Airbus has informed PAL that it could use the type to operate nonstop services to New York,” CAPA’s report read.

Last month, on the sidelines of the Manila leg of an Airbus sales tour event, PAL’s Mr. Bautista told journalists that the airline will consider Airbus’s twin- engined A350 jet for an expansion of its long-haul operations.

The airline’s interest in new planes comes as PAL Holdings, its parent company, returned to the black in 2014 with a profit of P127 million ($3 million) due to a combination of lower fuel prices and improving market conditions. It had reported three years of losses before that.

In the three months ending March, PAL reported an $85-million net income, a reversal of the $20.7-million net loss it booked during the same period last year.

Meanwhile, PAL will retrofit its 15-strong A330-300 fleet from an all- economy configuration also to go toe-to-toe against Cebu Pacific in the long-haul arena.

The flag carrier currently serves six long-haul destinations, with one in Europe and five in North America. Cebu Pacific uses its six A330s on four long-haul routes — Dubai, Kuwait, Riyadh and Sydney, though the aircraft is also used on three short-haul routes. —