PAL plans to upgrade fleet with Boeing, Airbus planes

MANILA, Philippines – The country’s flag carrier Philippine Airlines (PAL) is planning to buy or lease Boeing and Airbus planes to upgrade its fleet and provide more non-stop flights from Manila to Europe and the United States.

PAL president Jaime Bautista said last week the airline management is mulling on purchasing or leasing eight units of either Boeing 787 Dreamliner or Airbus A350 WXB aircraft. Both manufacturers, two of the world’s biggest, have expressed interest in supplying and delivering the aircrafts between 2017 and 2018.

“The Dreamliner and XWB will be contributing to savings in fuel, savings in maintenance and will allow us to improve our product because we can fly non-stop to more destinations,” Bautista said in a statement.

Aside from the acquisition of larger-capacity planes, the carrier’s subsidiary PAL Express serving domestic routes is also considering the purchase or lease of nine more Q300 or Q400 Bombardier turboprops to replace ageing models in its fleet.

PAL is currently operating 43 Airbus and 6 Boeing planes. Six of the A340s are serving the Los Angeles, San Francisco, London, New York and Vancouver flights while the Boeing units are operating in other long-haul destinations.

Following a three-year operational losses, PAL has finally posted a total comprehensive income of P954-M ($20.4-M) in 2014. For the first half of this year alone, PAL reported a net income of P6.4-B ($138-M) citing an improved tourism climate from January to July.

“The modest but significant financial performance snapped a three-year losing streak and represented a dramatic turnaround from the huge $229.7 million loss for the period April-December 2013,” PAL said in a statement.

“This was attributed mainly to an increase in passenger traffic after new international destinations were opened, as well as the expansion in domestic route network following an enhanced commercial arrangement with PAL Express,” it added.

However, Bautista warned the airline’s long-term prospects could be compromised if the ongoing talks between the Philippine and the United Arab Emirates (UAE) government resulted into an unfavorable decision.

PAL is joined by other international airlines in US and Europe in denouncing the practices of Gulf carriers through its massive subsidies used in purchasing more aircrafts that is way beyond which is needed to serve passenger demand, at the expense of other carriers.

“Any additional entitlements to the UAE carriers would create a distortion in the market and could possibly lead to PAL pulling out of these routes,” PAL said, adding that such subsidies enjoyed by Middle East carriers undermines Open Skies policy.