Philippine Airlines

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Philippine Airlines
Founded November 14, 1935 (1935-11-14) (as Philippine Aerial Taxi Company)
February 26, 1941 (1941-02-26) (as Philippine Air Lines)
Commenced operations March 15, 1941 (1941-03-15)
Hubs Ninoy Aquino International Airport
Secondary hubs Mactan-Cebu International Airport
Focus cities Kalibo International Airport
Frequent-flyer program Mabuhay Miles
Airport lounge Mabuhay Lounge
Subsidiaries PAL Express
Fleet size 54 excl. subsidiaries
76 inc. subsidiaries
Destinations 45 excl. subsidiaries
78 inc. subsidiaries
Company slogan Your Home in the Sky
Parent company LT Group Inc.
Headquarters PNB Financial Center, Pres. Diosdado Macapagal Avenue, CCP Complex, Pasay City, Philippines
Key people
Revenue Increase PHP27 billion(US$618.3 million)(2Q2014)
Net income Increase PHP1.5 billion (US$34.3 million)(2Q2014)
Employees approx. 5,000

Philippine Airlines (PAL) (A trading name of PAL Holdings Inc.) (PSE: PAL), also known historically as Philippine Air Lines, is the flag carrier of the Philippines. Headquartered at the PNB Financial Center in Pasay City,[6][7] the airline was founded in 1941 and is the first and oldest commercial airline in Asia operating under its original name.[8] Out of its hubs at Ninoy Aquino International Airport of Manila and Mactan-Cebu International Airport of Cebu, Philippine Airlines serves 31 destinations in the Philippines and 36 overseas destinations in Southeast Asia, East Asia, Middle East, Oceania, North America and Europe.[9]

Formerly one of the largest Asian airlines, PAL was severely affected by the 1997 Asian Financial Crisis. In one of the Philippines' biggest corporate failures, PAL was forced to downsize its international operations by completely cutting flights to Europe and Middle East, cutting virtually all domestic flights except routes operated from Manila, reducing the size of its fleet, and laying off thousands of employees. The airline was placed under receivership in 1998, and gradually restored operations to many destinations. PAL exited receivership in 2007, and following the brief management takeover by the San Miguel group from 2012 to 2014, has been taking steps towards reestablishing itself as one of Asia's premier carriers.


Beginnings (1935–1959)[edit]

Philippine Aerial Taxi Company[edit]

On November 14, 1935, the Philippine Congress approved the franchise of Philippine Aerial Taxi Company Incorporated (PATCO) to provide mail, cargo and passenger service particularly in the island of Luzon. The company then had scheduled Manila-Baguio and Manila-Paracale flights.[10] The company became dormant for six years on its scheduled passenger operation under its assigned routes.[8]

Philippine Air Lines[edit]

On February 26, 1941 Philippine Air Lines, Inc. by a group of businessmen led by Andrés Soriano, Sr., hailed as one of the Philippines' leading industrialists at the time,[11] who served as general manager, and former Senator Ramon Fernandez, who served as chairman and president. Philippine Air Lines, Inc. acquired the franchise of Philippine Aerial Taxi Company Incorporated, thus the birth of Philippine Airlines.[8]

The airline’s first flight took place on March 15, 1941 with a single Beechcraft Model 18 NPC-54 on daily services between Manila (from Nielson Field) and Baguio.[11] On July 22, the airline acquired the franchise of the Philippine Aerial Taxi Company. Government investment in September paved the way for its nationalization.

Revenue Passenger-Kilometers, scheduled flights only, in millions
Year Traffic
1957 160
1960 286
1965 729
1969 1330
1971 1302
1975 2842
1980 6033
Source: IATA World Air Transport Statistics

PAL services were interrupted during World War II, which lasted in the Philippines from late 1941 to 1945. Upon the outbreak of the Pacific War on December 8, 1941 the two Model 18s and their pilots were pressed into military service. They were used to evacuate American fighter pilots to Australia until one was shot down over Mindanao and the other was destroyed on the ground in an air raid in Surabaya, Indonesia.[12]

On February 15, 1946, PAL resumed operations after a five-year hiatus with service to 15 domestic points with five Douglas DC-3s and a payroll of 108 names. Philippine Airlines returned to its original home, the Nielson Field in Makati. The airport, heavily damaged during the war, was refurbished and modernized by PAL at a cost of over one million pesos, quickly becoming the official port of entry for air passengers into the Philippines. The airport was operated by Manila International Air Terminal, Inc., a wholly owned PAL subsidiary.

Philippine Airlines Vickers Viscount at Kai Tak Airport in 1961

On July 31, 1946, PAL became the first Asian airline to cross the Pacific Ocean when a chartered Douglas DC-4 ferried 40 American servicemen to Oakland, California from Nielson Airport with stops in Guam, Wake Island, Johnston Atoll and Honolulu.[8][11] A regular service between Manila and San Francisco started in December 1946.[11] During this time, the airline was designated as the country’s flag carrier.[13]

PAL commenced service to Europe in 1947 with the acquisition of more Douglas DC-4s.[11] By 1948, PAL had absorbed the only other scheduled airlines in the Philippines, Far Eastern Air Transport and Commercial Air Lines.[14] Following the government's decision to convert Nichols Field in Pasay City, the site of a former U.S. Air Force base, into a new international airport for Manila, PAL was required to move its base of operations and passenger terminal there from Nielsen Airport. The transfer was accomplished over a five-month period from January 31 to June 28, 1948, with PAL investing an additional P600,000 in ground installations and improvements to Nichols Field.

In 1951 PAL leased a DC-3 named "Kinsei" to Japan Airlines, which led to the founding of the country's own national airline.[15] In March 1954, the Philippine government suspended all flights to Europe, Japan and the United States, only to resume five years later. In three years PAL started services to Hong Kong, Bangkok, and Taipei using Convair 340s[11] that would later be replaced by the Vickers Viscount 784, which brought the airline into the turboprop age. On March 15, 1941, a Beech Model 18 twin engine monoplane left Manila for Baguio. The aircraft with registry NPC-54 carried two pilots and five passengers on its maiden flight. The five passengers were also the founders of PAL - Philippine Air Lines: Andres Soriano, Ramon Fenandez, Juan Elizalde, John R. Schultz and Ernesto Von Kaufmann. On October 23, 1941, John R. Schultz was elected by the Board of Directors as Treasurer of Philippine Air Lines. On December 8, 1941, war broke out. PAL ceased operations but shortly resumed operations. In 1949, President Quirino became the first Filipino Chief executive to travel by air over the Pacific.

First expansion and modernization (1960–1989)[edit]

A Philippine Airlines DC-10 in Zurich. The airline operated 6 DC-10s, which consisted of five -30 series and one -30CF series.

In the 1960s, PAL entered the jet age, initially with a lone Boeing 707, later replaced with Douglas DC-8 aircraft leased from KLM Royal Dutch Airlines.,[11] used for long-haul international flights to Europe and the United States. The DC-3 remained the mainstay of domestic services as it expanded to a total of 72 points as airports were improved or opened, but most of the airline's rural air service was later stopped in May 1964. Two years later, PAL commenced its first jet services to Cebu, Bacolod, and Davao using the BAC1-11.[11] In addition, PAL was also privatized, as the Philippine government relinquished its share in PAL after Benigno Toda, Jr., then-PAL chairman, acquired a majority stake in the airline.[11]

Upon the declaration of martial law in 1972, Ferdinand Marcos, during his second term of presidency, implemented a monopolizing decree of a one-airline policy. PAL was the lone surviving airline, absorbing Air Manila and Filipinas Orient Airways.[8] On March 10, 1973, PAL was re-designated as the national flag carrier.[14] PAL continued its expansion with the arrival of its first Douglas DC-10 in July 1974.[11] Three years later, the Philippine government re-nationalized PAL, with the Government Service Insurance System holding a majority of PAL shares. In 1979, the Boeing 727, the Boeing 747-200B and the Airbus A300B4, dubbed the "Love Bus", joined the PAL fleet,[11] while the PAL DC-8 fleet was retired.[12]

In 1975, Philippine Airlines was headquartered at the PAL Building in Makati City.[16] Between 1979 and 1981, as part of a comprehensive modernization program led by then-PAL President Roman A. Cruz, PAL built a series of mammoth aviation-related facilities around the periphery of the MIA. These included the PAL Technical Center, the PAL Inflight Center, the PAL Data Center and the PAL Aviation School.

A PAL Boeing 747-200 at London Gatwick

On April 2, 1982, a PAL Boeing 747-200B arriving from San Francisco via Honolulu became the first aircraft to dock at the new 800-million peso Terminal 1 of Manila International Airport. PAL would later strengthen its cargo-handling capability by building a dedicated cargo terminal building adjacent to the MIA passenger terminal and installing cargo-refrigeration equipment in 1983. The new facilities, which catered mainly to international cargo services, enabled PAL to become a fully equipped cargo handler. Services to Paris and Zürich began in November 1982.

After Cruz's resignation to President Cory Aquino on the last day of the 1986 EDSA Revolution, Dante G. Santos became PAL president. He launched a massive modernization of the domestic fleet with the acquisition of the Short 360, nicknamed the "Sunriser", in May 1987, the Fokker 50 in August 1988 and the Boeing 737-300 jet in August 1989.[11] Corazon Aquino also abolished the one-airline policy in 1988 that had begun under Marcos.

As the Manila domestic passenger terminal outgrew its capacity and ramp aircraft parking space became more scarce, PAL leased the hangar of the Philippine Aerospace Development Corporation and converted it into the PAL Domestic Terminal 2. The terminal, which opened in October 1998, exclusively served passengers flying to destinations serviced by PAL's Airbus A300s: namely, Cebu and Davao, with General Santos and Puerto Princesa added later on. At the same time, PAL also expanded and improved the existing terminal. The opening of the new facility cleared out the old terminal and provided greater convenience to passengers.

Re-privatization and second expansion (1990–1997)[edit]

A Philippine Airlines A320 at Hong Kong International Airport. The A320 is one of PAL's first narrow body aircraft.

PAL was privatized again in January 1992, when the government sold a 67% share of PAL to a holding company called PR Holdings. However, a conflict as to who would lead PAL led to a compromise in 1993, when former Agriculture Secretary Carlos G. Dominguez was elected PAL president by the airline's board of directors. The fleet of BAC1-11s were retired in May 1992, following completion of the deliveries of Boeing 737s, and the Short 360s in September. In November 1993, PAL acquired its first Boeing 747-400. The new aircraft arrived at Subic Bay International Airport and was carrying then-President Fidel V. Ramos, who was headed home from the United States after an official visit.[11] The 400-ton aircraft, one of the world's largest and most popular long-range aircraft continues to be the mainstay of PAL's trans-Pacific services and its flagship aircraft. A new service between Manila and Osaka, launched in 1994, brought to 34 the number of points in PAL's international route network.

The PAL Domestic Terminal 2 was refurbished in 1995, with a number of facilities being added or improved, including a renovated Mabuhay Lounge, an exclusive check-in counter for Mabuhay Class passengers, an Express Counter, refreshment bar, a medical clinic, an expansive waiting lounge and two baggage carousels in the arrival section. PAL facilities at NAIA were also renovated. The total cost for the renovation of the domestic terminal (1 and 2) reached P33.15 million.[17]

In January 1995, Lucio C. Tan, the majority shareholder of PR Holdings, became the new chairman and CEO of the airline.[11] The delivery of the carrier's fourth Boeing 747-400 in April 1996 signaled the start of an ambitious US$4 billion modernization and re-fleeting program that aimed to make PAL one of Asia's best airlines within three years. The centerpiece of the program was the acquisition of 36 state-of-the-art aircraft from Airbus and Boeing between 1996 to 1999. The re-fleeting sought to give PAL the distinction of having the youngest fleet in Asia and allow the expansion of its domestic and international route network. The 36 orders of PAL during its re-fleeting program were for eight Boeing 747-400s, four Airbus A340-300s, two Airbus A340-200s, eight Airbus A330-300s and twelve Airbus A320-200s. The re-fleeting program enabled PAL to be dubbed the first airline in the world to operate the full range of new-generation Airbus aircraft.[18]

Asian financial crisis (1997–1999)[edit]

A PAL Boeing 747-200 with a Philippine Centennial decals to commemorate the 100 years of Philippine Independence in 1998 at Narita Airport.

In 1997, PAL rebranded itself as "Asia's sunniest airline" to cap its new marketing and advertising thrust. PAL also commenced services to New York City, using the Newark Liberty International Airport via Vancouver. The acquisition of too many aircraft matched with unprofitable routes forced the airline to be financially unstable. The re-fleeting program was about halfway through when the full impact of the 1997 Asian financial crisis struck the airline industry early in 1998. By March 31, 1999, PAL dismantled its Mactan-Cebu International Airport hub. With massive lay-offs also taking place, disputes between the airline’s owners and the employee’s union led to a complete shutdown of PAL's operations on September 23, 1998.[19] Cathay Pacific temporarily took over PAL's domestic and international operations during its fourteen-day shutdown,[20] with Cathay Pacific also showing interest in acquiring a 40-percent stake in PAL during this period. However, no agreement was reached with the Hong Kong-based airline.[21]

PAL resumed operations on October 7, 1998 after an agreement between PAL employees and top management, reported to be facilitated by Philippine President Joseph Estrada, was reached, with services to 15 domestic points out of Manila. On October 29, the flag carrier resumed international services with flights to Los Angeles and San Francisco, with other international services being restored three weeks later.[14] Asian services resumed on November 11 with flights to Tokyo and Hong Kong. PAL gradually expanded its network over the next two months, restoring services to Taipei, Osaka (via Cebu), Singapore, Fukuoka, Dhahran, Riyadh and Seoul. With the aviation industry still in the doldrums, PAL continued to search for a strategic partner but in the end, it submitted a "standalone" rehabilitation plan to the SEC on December 7, 1998. The plan provides a sound basis for the airline to undertake a recovery on its own while keeping the door open to the entry of a strategic partner in the future. PAL presented the new proposed rehabilitation plan to its major creditors during a two-week marathon meeting that started on February 14 in Washington D.C. and ended on March 1 in Hong Kong.

In 1999, PAL submitted its amended rehabilitation plan to the Securities and Exchange Commission that comprised a revised business plan and a revised financial restructuring plan. The plan also required the infusion of US$200 million in new equity, with 40% to 60% coming from financial investors and translating to no less than 90% ownership of PAL. That same year, with the unprecedented boom in air travel, PAL operations were moved to the new Centennial Terminal 2 of Ninoy Aquino International Airport, located at the site of the old MIA terminal building. On August 9, 1999, PAL moved selected domestic flights to the P5.3 billion terminal. Full domestic operations operated from the new terminal on August 10, while international services followed soon after, thus consolidating PAL's flight operations in one terminal for the first time.[11]

Receivership and rehabilitation (2000–2008)[edit]

A Philippine Airlines Airbus A340-200 about to land at Kai Tak Airport.

In 2000, PAL finally returned to profitability, making some ₱44.2 million in its first year of rehabilitation, breaking some six years of heavy losses. On September 1, 2000, PAL formally handed over its ownership of its maintenance and engineering division to German-led joint venture Lufthansa Technik Philippines (LTP), the world's largest provider of aircraft maintenance services in accordance with the provisions of its rehabilitation plan, which mandates the disposal of the airline's non-core assets.[11] In August of the same year, PAL opened an e-mail booking facility. In 2001, PAL continued to gain a net profit of P419 million in its second year of rehabilitation. In that year alone, PAL restored services to Bangkok, Taipei, Sydney, Busan, Jakarta, Vancouver and Ho Chi Minh City,[11] while launching new services to Shanghai and Melbourne. A year later, PAL restored services to Guam and Tagbilaran.[22]

Like other airlines, PAL was severely affected by September 11 Attacks in 2001. But, in 2003, PAL was restructured again.

The Mabuhay Miles frequent flyer program was launched in 2002, combining PAL's former frequent flyer programs, PALSmiles, Mabuhay Club, and the Flying Sportsman (now SportsPlus) all into one.[8] The PAL RHUSH (Rapid Handling of Urgent Shipments) Cargo service was also re-launched during the same year.[11] An online arrival and departure facility and a new booking system was then launched in 2003. In December, PAL also acquired a fifth Boeing 747-400.[11]

In 2004, PAL launched services to Las Vegas to mark its 63rd year of service. PAL also returned to Laoag and started services to Macau on codeshare with Air Macau. In that same year, the PAL entered into code share agreements with Air France and KLM Royal Dutch Airlines for services to Paris and Amsterdam, respectively.[23] Code share service to Paris was cut due to the merging of the two European airlines and the formation of Air France-KLM. Service to Amsterdam remained, operated by KLM. PAL also continued an overhaul of its fleet with the arrival of two new Airbus A320-214s and continued modernizing its ticketing systems with the launch of electronic ticketing. For the first time in Philippine history, the airline flew President-elect Gloria Macapagal-Arroyo and Vice-President-elect Noli de Castro to their inauguration in Cebu City. Arroyo rode a chartered PAL Airbus A330-300, while de Castro was aboard a separate Airbus A320-200.

A Philippine Airlines Boeing 747-200 in its current sunriser livery at Frankfurt Airport in 1995.

In March 2005, PAL started services to Nagoya and restored scheduled flights to Beijing after a 15-year hiatus. In response to rival Cebu Pacific's increasing domestic market share, mainly due to its massive re-fleeting program[24] and its own aging Boeing 737 fleet, PAL signed an agreement for the purchase and lease of up to 18 Airbus A319-112s and A320-214s from Airbus and GE Capital Aviation Services (GECAS) on December 6, 2005.

The first brand-new, GECAS-leased Airbus A319-112s were delivered to and inaugurated by PAL and President Arroyo on October 20, 2006. It was the first aircraft in the airline's history to offer AVOD-capable inflight entertainment on its Mabuhay Class cabin. In December, the airline initiated its wide-body re-fleeting program by signing a deal with Boeing for the purchase of two Boeing 777-300ER aircraft to be delivered in 2009, with an option for two more planes in 2011. PAL also signed a separate agreement with GECAS to lease another two Boeing 777-300ER aircraft for delivery in 2010. The purchase of the new 777-300ERs effectively cancelled previous orders for new 747-400s, ending the production of said aircraft.[25][26] PAL later signed a memorandum of understanding that opens the way for the introduction of flights to the southwestern Chinese city of Chongqing.[27] Service to Chongqing began on March 14, 2008, while service to Chengdu commenced on March 18, though the routes have been terminated after the 2008 Sichuan earthquake.

Philippine Airlines was named "Airline Turnaround of the Year" for 2006 and 2007 by the Centre for Asia Pacific Aviation for its "strategic contribution to the aviation industry through a significant transformation by successfully restructuring its operations through innovative cost-cutting measures resulting in operating profits".[28][29]

Post-receivership history (2008–2011)[edit]

A Philippine Airlines Boeing 747-400 at Los Angeles International Airport

On October 4, 2007, nine years after being financially crippled by the Asian financial crisis and subsequent downturns in the aviation industry, the Securities and Exchange Commission ordered the release of PAL from receivership. The airline immediately announced plans to attract foreign investments through an international road show to tour around Asia, Europe and North America.[30] PAL continued its ambitious expansion plans, launching regional subsidiary PAL Express on April 10, 2008 to supersede the financially troubled Air Philippines, with a $150 million order for three 50-seat Bombardier Q300 and six 78-seat Bombardier Q400 aircraft from Bombardier Aerospace.[31] PAL Express operations began on 5 May with eight flights daily between Manila and Malay, while hub operations from Cebu City commenced on 19 May with flights between Cebu and five points in the Visayas and Mindanao.[32] Services to other destinations, including many destinations formerly served by PAL prior to the Asian financial crisis, began in June and July 2008.[33] PAL Express was originally to be primarily based in Cebu and fly intra-regional routes in the Visayas and Mindanao, as well as secondary routes to smaller airports in island provinces. In response to rising competition from Cebu Pacific, PAL Express rebranded itself as Airphil Express on March 28, 2010 under a low-cost model. PAL decided to restore the PAL Express name as part of expansion strategy, effectively rendering the Airphil Express brand defunct on March 15, 2013.

Despite PAL's successful exit from receivership, international safety concerns regarding the Philippine aviation industry severely hindered its expansion plans. The United States Federal Aviation Administration downgraded the Philippines' aviation industry from Category 1 to Category 2 in January 2008, preventing PAL from increasing its flights to the United States from 33 per week or from switching the type of aircraft used unless the airline undertakes a wet-lease agreement with a different carrier.[34] The FAA decision effectively stalled PAL's previously announced intentions to expand its presence in the US market with routes to San Diego, Seattle, Chicago, Saipan and New York City.[34] On March 30, 2010, all Philippines-based carriers were placed in a EU aviation blacklist,[35] banning PAL from flying to any European destinations. Nonetheless, PAL continued its route expansion plans in the Asia-Pacific region, resuming services to Riyadh with a four times weekly Boeing 747 service four years after it was suspended, as well as adding a twice weekly Airbus A330 service to Brisbane and three-times-weekly service to Delhi via Bangkok. However, the expansion proved unprofitable and all three routes were cancelled. Flights to Brisbane and Riyadh were suspended in 2011, and the Manila-Bangkok-Delhi route ended in 2013; however service to Brisbane and Riyadh resumed in the same year.

Despite these hindrances on its expansion, PAL went ahead with its widebody re-fleeting program, receiving its first two Boeing 777-300ER aircraft on November 19, 2009 and January 2010 respectively, and another two leased from GECAS in 2010. Due to the inability for PAL to further expand its long-haul network, the airline launched 777 service to its existing long-haul routes including Tokyo, Los Angeles and Vancouver.[36] The 777-300ER jet features 370 seats in a two-class configuration (42 flat business class seats in a 2-3-2 layout and 328 economy class seats in a 3-4-3 layout), and is also PAL's first aircraft to feature AVOD in-flight entertainment in all classes (later retrofitted in its 747-400 fleet).

Labor disputes[edit]

In July 2010, 25 of Philippine Airlines' pilots resigned and left to seek employment abroad without informing the airline. After calls to return to work by both the airline and Philippine Government, PAL subsequently sought to file charges against the pilots involved for breach of contract.[37] In the same month, PAL announced that it would be outsourcing jobs, with retrenchments resulting. Disputes with flight attendants, ground crew, airport staff as well as reservation agents escalated, with threats of potentially disruptive strike action, which took place in October.[38] On Friday, November 12, 2010, the Department of Labor and Employment approved the lay-off of 2600 employees of Philippine Airlines.[39]

Entry of San Miguel Corporation (2012–2014)[edit]

A Philippine Airlines Boeing 777-300ER taxiing at Ninoy Aquino International Airport.

On April 4, 2012, San Miguel Corporation bought a 49-percent stake in Philippine Airlines for $500 million as part of a strategy to move away from its beer and food businesses. San Miguel, one of the Philippines' biggest conglomerates, said it planned to help modernise and strengthen PAL, renew its aging fleet and restore its competitiveness in the Asian aviation industry. San Miguel president Ramon Ang also announced intentions to join a global airline alliance.[40] PAL's first major initiative under San Miguel ownership was confirmed on 28 August 2012, with a $7 billion order for 54 Airbus aircraft, comprising 44 Airbus A321 (34 with sharklets and 10 A321neo) and 10 Airbus A330-300, with options for 10 more. The A321 was ordered to enhance domestic and regional routes, while the A330-300s are to be flown on Australian, Middle Eastern and some European routes.[41][42][43] PAL's original fleet of 8 A330s were transferred to PAL Express in response to Cebu Pacific announcing intentions to compete with PAL on mid-to-long-haul routes. PAL exercised its option to purchase a further 10 A330-300 for $2.5 billion on 28 September. PAL took delivery of its first aircraft under this order in 2013.

Under San Miguel's management, PAL embarked on expanding its route network, involving both adding new and restoring previously terminated routes. In 2013, the airline announced its return to Abu Dhabi, Dammam and Riyadh, and launched new routes to Brisbane and Perth (via Darwin), as well as Doha and Jeddah.[44] In 2013, PAL was removed from the EU aviation blacklist after three years of negotiations, and the carrier immediately announced its European plans.[45] PAL subsequently launched flights between Manila and Heathrow to commence in November 2013, its first European destination in 15 years.[46] The airline will expand its US service as they will open flights from Manila to New York via Vancouver.

In addition to its fleet modernization and route expansion, PAL announced plans to become an investor within the aviation industry following the San Miguel partial acquisition. In 2012, the airline entered into negotiations with Cayman Airways for a 50 percent equity share in the Caribbean-based airline. Under the deal, Cayman Airways will issue new preferred shares to PAL's majority shareholder, San Miguel Corporation. As part of the proposed scheme, Cayman Airways will use the fresh capital to acquire new aircraft which will then be leased out to Philippine Airlines under a wet lease agreement. The planes will be registered and domiciled in the Cayman Islands, and to be flown, operated and maintained completely by Cayman Airways.[47] In 2013, PAL entered a joint venture with the Cambodian conglomerate Royal Group of Cambodia, headed by Kith Meng to launch a new incarnation Cambodia Airlines with a 49% share. The new airline was originally expected to commence operations by June 2013, however no services have been launched as of September.[48]

On August 30, 2012, PAL president Ramon Ang announced its intention to build a second international airport to service Metro Manila.[49] Citing the need to relieve pressure on the congested and outdated Ninoy Aquino International Airport and the unreasonable 90 km distance from the Philippine government's favoured second airport option at Clark, Ang announced that the airline was in negotiations with a Korean contractor to build the airport on a 2000-hectare site, initially with two runways, eventually expanding to four,[50] in a yet-undisclosed location north of Metro Manila. In March 2013, PAL postponed the project indefinitely citing government restrictions on airline corporate ownership of Philippine airports.[51][52] However, on July 12, 2013, Ang stated that PAL was 'still looking to build' a new airport and were '100% sure' that the project would eventuate, although plans had yet to be finalised.[53]

In a disclosure to the Philippine Stock Exchange on September 8, 2014, San Miguel stated that it has signed an agreement “whereby [San Miguel] expressed willingness to sell its 49% stake to the group of Dr. Lucio Tan, and the latter has expressed willingness to buy the said 49% stake.” It added the deal is “subject to the fulfillment of certain conditions.” Informed sources said San Miguel gave Tan a week to raise $1 billion to acquire the stake.[54][55] The final transaction amounted to $1.3 billion and was completed a week later on September 15, 2014.[56][57] In a disclosure to the Philippine Stock Exchange on September 16, 2014,[58] San Miguel said Tan assumed day-to-day management of PAL through the appointment of its former president, Jaime Bautista, as general manager. But it maintained that Ang, as president of PAL, remains, along with the rest of his team, "until the relevant closing date of the agreement" between the parties.[59] On October 15, 2014, Ang officially stepped down as President and COO.[60] On October 23, 2014, Philippine Airlines announced the appointment of Bautista as the new President and COO of Philippine Airlines.[61]

Corporate management[edit]

Philippine Airlines Headquarters

Philippine Airlines is owned by PAL Holdings (PSEPAL), a holding company responsible for the airline's operations. PAL Holdings is in turn part of a group of companies owned by business tycoon Lucio Tan. PAL is the thirteenth-largest corporation in the Philippines in terms of revenue and the twenty-first largest in terms of assets, as stated in the Philippines' Top 500 Largest Corporations of 2005.[citation needed] As of January 2005, PAL employs a total of 7,322 regular employees, including 450 pilots and 1300 cabin crew.[62] PAL is the sixty-first largest airline in the world in terms of revenue passenger kilometers flown, with over 16 million flown for 21 million available seat kilometers, an average load factor of 76 percent.[63]

For the fiscal year ending on March 31, 2007, Philippine Airlines reported a net income of US$140.3 million, the largest profit in its 66-year history.[64] This allowed it to exit receivership in October. PAL had forecast net profit to reach $32.32 million for the fiscal year ending on March 31, 2008, $26.28 million in 2009 and $47.41 million in 2010, but this proved difficult to achieve, with a large loss announced in early 2009 causing some concern.


  Philippines (Manila, Gen. Santos & Kalibo)
  Philippine Airlines destinations
  Charter Flights

Philippine Airlines operates two hubs in Manila and Cebu, with the majority of routes operating from Manila. The airline flies to destinations in Asia-Pacific, North America and Australia, especially those with large overseas Filipino populations.[citation needed]

PAL currently operates Manila-General Santos as the mainline domestic destination and two non-hub routes, Darwin-Brisbane and Vancouver-Toronto. PAL will operate another non-hub route (Vancouver-New York). In the past, PAL operated a number of domestic and international non-hub routes (most notably Iloilo-General Santos, Bangkok-Delhi, Vancouver-Newark, Vancouver-Las Vegas,Zürich-Paris and Singapore-Jakarta), as well as non-stop services to destinations in Europe and extensive domestic operations; those services were discontinued in light of the Asian financial crisis. PAL is also studying to open additional flights to the US West Coast namely San Diego and Seattle as well as to reopen the Chicago route. Some of its previous domestic operations, namely, service from Manila to Naga, Tuguegarao, and more recently, Ozamiz have been taken over by Airphil Express (PAL Express), while services to others were stopped altogether. In addition, services from Manila to Legazpi City, Puerto Princesa, Butuan, Cagayan de Oro, Cotabato City, Dipolog, Zamboanga City, Dumaguete and Tacloban, while retaining the "PR" flight codes, have been operated by Airphil Express (now PAL Express) on behalf of PAL since March 1, 2014.

Codeshare agreements[edit]

Philippine Airlines had codeshare agreements with the following airlines as of December 2014:[35]


PAL president Jaime Bautista told Biz Buzz that the flag carrier would actively look to get into one of the major alliances, which include Star Alliance, the oldest group, as well as Skyteam and Oneworld. Like the most selective of clubs, a carrier does not simply apply to join, it must first be “invited”, Bautista said. Moreover, all existing member-carriers have to agree to any new admission. To that end, PAL’s external department has been working with “friends” in the industry to try to gain access, Bautista said.[65]


Philippine Airlines current fleet
A Boeing 777-300ER on short final to London Heathrow Airport in 2014.

As of March 2015, the Philippine Airlines fleet (excluding all PAL Express aircraft) consists of the following aircraft:[35][35][66]

Philippine Airlines fleet
Aircraft In Service Orders Passengers Notes
J Y+ Y Total
Airbus A320-200 10
To be replaced by Airbus A321-200 and Airbus A321neo

2 of PAL's A320 will be sold to Allegiant Air by the end of 2015[67]

Airbus A321neo 18
Ordered on August 28, 2012[68]

Orders for Airbus A321neo will be delivered starting 2017 until 2024[69]

Airbus A321-200
19 12 18 169 199 PAL will receive 3 more Airbus A321 Aircraft, 2 in April and 1 in June. The 5 remaining Aircraft scheduled for 2015 will be deferred until 2016[70]

Replaces Airbus A320.

Airbus A330-300 15 0
PAL will be returning five of their mono class A330-300 aircraft to lessors before the end of the year[71]
Airbus A340-300 6 36
Boeing 777-300ER 6 42
Total 54 37

  • All aircraft were delivered to Philippine Airlines or leased brand new; except for the six Airbus A340-300's (RP-C3435, RP-C3436, RP-C3437, RP-C3438, RP-C3439 and RP-C3441).

Future fleet[edit]

Philippine Airlines is currently evaluating the Airbus A350-900 and Boeing 787-10 Dreamliner to compliment with the existing Boeing 777-300ER Fleet. No mentions of future orders of the Boeing 777X, but Bautista said that a pair of brand new Boeing 777-300ERs will be added to the fleet soon for long haul flights to North America, its most profitable market.

Fleet History[edit]

Over the Years, Philippine Airlines has operated the following aircraft:

Aircraft Total Exit from Service Notes
Airbus A300B4 13 September 1998 -
Airbus A319-100 4 October 2014 -
Airbus A330-300 (with GE engines) 8 August 31, 2014 RP-C3330 and RP-C3340 were scrapped at CRK; RP-C3336 is stored at MNL; RP-C3331, RP-C3332, RP-C3333 and RP-C3335 are stored in GWO; RP-C3337 is stored at MZJ.
Airbus A340-200 4 1998 Leased to Cathay Pacific in 1994, later sold to Airbus in 1998 when PAL completed the delivery of all A330/A340 they have ordered.
Airbus A340-300 8 November 2014 Replaced with Airbus A340-300 leased from Iberia.

Old A340s (RP-C3430, RP-C3432 and RP-C3434) have been ferried to GWO for scrapping. RP-C3431 was scrapped at CRK.

BAC One-Eleven 400 Series - May 1992 -
BAC One-Eleven 500 Series - May 1992 -
Beech Model 18 - - -
Boeing 707 - - -
Boeing 727-100 - - -
Boeing 737-300 14 May 2008 Replaced with Airbus A320. RP-C4007 is stored at MNL which was previously operated by Air Philippines
Boeing 737-400 3 Replaced with Airbus A320
Boeing 747-200B 13 2001 Replaced with Boeing 747-400
Boeing 747-400 5 September 1, 2014 The air frame of the Boeing 747-400 with registration number RP-C8168 was ordered by Philippine Airlines. The airline did not take up the order and was instead taken up by Canadian Airlines, which subsequently merged with Air Canada. It was then leased by Philippine Airlines from GECAS in 2003. RP-C8168 was later retired in 2013 and was flown and stored in GWO.

The air frame of another Boeing 747-400 with registration number RP-C7475 is the only PAL aircraft with numerous Arabic signs. RP-C7475 was intended for Kuwait Airways but the said airline decided to cancel the order. Philippine Airlines took up the said order and it was delivered in 1996. RP-C7475 was later retired along with all the 747 fleet of PAL in 2014. The aircraft is stored at MZJ

The final 747 flight of PAL was operated as PR104/105 (flight no. for San Francisco-bound PAL flights utilizing Boeing aircraft) using the last remaining 747-400 in their fleet, RP-C7473, on August 31, 2014. September 1, 2014 marks the official retirement of the Queen of the Skies for Philippine Airlines.[72]

Replaced with Boeing 777-300ER

Convair 340 - - -
De Havilland DHC-3 Otter - - -
Douglas DC-3 - 1978 -
Douglas DC-4 - - -
Douglas DC-6 - - -
Douglas DC-8 - - -
Fokker 27 - - -
Fokker F50 / F60 11 December 1999 -
Hiller UH-12 - - -
Hawker Siddeley HS 748 - - -
McDonnell Douglas DC-10-30 - - -
McDonnell Douglas MD-11 4 July 1998 Leased from World Airways
NAMC YS-11 - - -
Noorduyn Norseman C-64 - - -
Scottish Aviation Twin Pioneer II - - -
Shorts SD360 - - -
Vickers Viscount 700 - - -
PAL's Airbus A300, dubbed as the "Lovebus" at Singapore Changi Airport.

Fleet maintenance[edit]

The entire Philippine Airlines fleet of Airbus and Boeing jets were formerly maintained in-house at the PAL Technical Center, which consisted of two hangars. The hangars contained an engine overhaul shop, two engine test cells and test shops. The responsibility of maintaining the fleet, as well as all the facilities, was subsequently transferred in 2000 to Lufthansa Technik Philippines (LTP), a joint venture of Hamburg-based Lufthansa Technik AG, a leading maintenance provider in aircraft maintenance, repair and overhaul, and Macro Asia Corporation, one of the Philippines' leading providers of aviation support services and catering for foreign airlines, owned by Lucio Tan, the majority owner of PAL. LTP currently maintains an 8-bay hangar and workshops occupying 110,000 square meters in Manila’s Ninoy Aquino International Airport.

Currently, some of the A320 fleet are being handled by PAL Express Maintenance and Engineering, including all A321 aircraft that are already delivered and those to be delivered. PAL Express is the budget arm of PAL and has overtaken PAL last 2012 in domestic seats second only to Cebu Pacific (5J)[73]

Mabuhay Lounge[edit]

The Mabuhay Lounge is the airport lounge for Philippines Airlines. Mabuhay (Business) Class and Elite Members of Mabuhay Miles (except those taking PAL Express flights) are eligible to use the lounge. The clubs all have open bars and food catering.

Philippine Airlines Mabuhay Lounge at NAIA-2

Lounges are maintained at the following airports:

As of October 11, 2013, The Lounge was renovated to give passengers a pleasant experience[74]



The Philippine Airlines logo has gone under four incarnations in the entire length of its operations. The first logo incorporated a blue oval with "PAL" superimposed in white letters, a four-pointed star whose points intersect behind the "A" in the PAL initials, and a wing whose position varied depending on the location of the logo (the wing points to the right if located on the left side of the plane, left if on the right side). A variant of this logo used a globe instead in the blue oval with the PAL initials superimposed. This logo would be in use from the 1950s until the mid-1960s, when it would be replaced by a second logo.

The second logo adopted a blue triangle (with the bottom point missing) and a red triangle superimposed upon it, enclosed by a circle; this was meant to evoke a vertically-displayed national flag (the white being formed by the negative space between the two triangles' tips). In the mid-1970s, a third logo, which removed the circle and simplified the shapes, was introduced. The typeface used in the third logo was later applied to the second logo, which remained the official PAL logo until 1986, when it would be replaced by the current logo.

The current PAL logo features the same two blue and red triangles used in the second and third logos. However, an eight-rayed yellow sunburst that recalled the flag's Sun was superimposed on top of the blue triangle, and a new Helvetica typeface was used.


PAL liveries have undergone many incarnations. The first PAL aircraft bore a simple white-top, silver-bottom livery separated by solid straight cheatlines, with a small Philippine flag superimposed on the tail. The name "Philippine Air Lines" was superimposed in the upper forward portion of the fuselage and the PAL logo was located at the back. Later variants of the livery, especially on PAL jet aircraft, made use of an extended Philippine flag as cheatlines, with the PAL logo superimposed on the tail. By this time, the name "Philippine Airlines" was used in the livery.[75]

Another variant of the original livery used by PAL is somewhat similar to the current livery. However, it uses PAL's third logo on the tail with blue, white and red cheatlines running the center of the fuselage. Later on, the bottom half of the fuselage was also painted white.

The current "Eurowhite" livery, first used with the Short 360, was adopted in 1986 following PAL's corporate rebranding. This livery, (designed by Landor Associates) has the name "Philippines" superimposed on the forward portion of the fuselage in italics (using the PAL logo typeface), while the tail is painted with the logo and the Philippine flag is visible near the rear of the aircraft. The PAL logo is also painted on the winglets of aircraft that have them. The name "Philippines", instead of "Philippine Airlines", is to denote that PAL is the primary flag carrier of the Philippines. However, this sometimes leads to confusion that a PAL plane, especially when chartered by the President for official or state visits, is in fact the official air transport of the Philippine head of state. Any PAL aircraft with the callsign PR 001 is a special plane operated by Philippine Airlines to transport the President of the Philippines.

For the airline's 70th anniversary, a special decal was placed on all of its aircraft. The sticker featured a stylized "70" and the words, "Asia's first, shining through".


  • Mabuhay
  • Asia's First Airline
  • Welcome Aboard the Philippines
  • Shining Through - concurrent with the slogan The beauty of the Philippines that heavily promoted Philippines as a tourist destination. The TV advertisement clip won a finalist in Clio Awards.
  • Pilipino, Para sa Pilipino (Filipino, for the Filipino)
  • On the Wings of Change
  • Asia's Sunniest
  • With You All the Way
  • It's About Experience - introduced after its 60th Anniversary. It attempts to highlight the fact that PAL is the first and longest-serving airline in Asia under its original name. The slogan was also used in the airline's ad spot featuring Kevyn Lettau, which incidentally featured her song, "Sunlight."
  • Love at Thirty Thousand Feet is the de facto theme song of the airline. It was composed by Jose Mari Chan and is still being used today. The song has many variations, including a version for the PAL's Swingaround tour package advertisement.
  • Clearly no. 1
  • With us, You're always no. 1
  • 70 Asia's First, Shining Through - introduced for PAL's 70th anniversary, it combines two previous PAL slogans: Asia's First Airline and Shining Through.
  • Love, Your PAL
  • Fly The Flag. Fly Proud
  • Your Home in the Sky
  • I Am The Eye In The Sky

Mabuhay Miles[edit]

Mabuhay Miles is the Philippine Airlines frequent flyer program. It was established in 2002 by merging all existing PAL frequent flyer programs prior to the Asian financial crisis: namely, PALsmiles, the Mabuhay Club and the Flying Sportsman, with PALsmiles and Mabuhay Club members being moved to the new program on August 1, 2002.[76] The Flying Sportsman program was subsequently transformed into SportsPlus, a three-tiered, subscription-based program which gives extra baggage allocations for sports equipment.

Mabuhay Miles members earn miles that can be redeemed at face value on most Philippine Airlines-operated flights, as well as on code-shared routes of partner airlines. Some promotional fares, however, are ineligible to earn miles. Miles may also be earned by patronizing the services of Mabuhay Miles partners, or by purchasing miles. Membership tiers include Mabuhay Miles Base, Elite, Premium Elite and Million Miler.

Mabuhay Miles Tiers
Tier Level Benefits Requirements
  • Redeemable free flights and service class upgrades
1,000 Miles on eligible published fares with Philippine Airlines and partners.
  • 25% bonus on actual miles flown for all flights on Philippine Airlines[77]
  • Mabuhay Lounge access and participating VIP lounges[77]
  • Priority reservation waitlist[77]
  • Priority check-in, boarding, luggage handling[77]
  • Priority airport standby (higher priority for a seat on the next available flight in case of flight cancellations)[77]
  • Additional luggage allowance of ten kilograms flying on Philippine Airlines-operated flights (except to/from US, Canada, Nagoya, Tokyo and Guam)[77]
  • SportsPlus Global and partner privileges[77]
  • Exclusive member reservations numbers[77]
25,000 miles (40,000 km) or
30 one way segments in Fiesta class or
15 one way segments in First or Mabuhay class within a calendar year.[78]
Premier Elite
  • Receive all the benefits of Mabuhay Miles Elite[79]
  • 75% bonus on actual miles flown traveling to and from the United States and Canada on Philippine Airlines[79]
  • For all other flights on Philippine Airlines, a 25% bonus on actual miles flown[79]
  • Receive 2 upgrade travel certificates
  • Invite a traveling companion to the Mabuhay Lounge[79]
  • Additional luggage allowance of 30 kilograms flying on Philippine Airlines-operated flights (except to/from US, Canada and Japan)[79]
45,000 miles (72,000 km) or
50 one way segments in Fiesta class or
25 one way segments in First or Mabuhay class within a calendar year[78]
Million Miler
  • Receive all the benefits of Mabuhay Miles Premier Elite[80]
  • Lifetime Premier Elite Membership[80]
  • Highest level of priority and recognition[80]
1,000,000 miles (1,600,000 km) accumulated from the beginning of one's membership[80]

As of October 2004, Philippine Airlines had 27 million members.[81] Philippine Airline customers can now enjoy their Mabuhay Miles Frequent flyer program with "No Expiration" on their Miles.[82]

Cabin service[edit]

An example of an Economy Class in flight Lunch served for its Manila-Hong Kong flights.

Philippine Airlines currently offers two-class services on all aircraft, business (called Mabuhay Class) and economy (called Fiesta Class).

During the second half of 2006, PAL announced a cabin reconfiguration project for its Boeing 747-400 and Airbus A340-300 aircraft. The airline spent US$85.7 million to remove all first class seats and increase the size of its business and economy seats, leading to the aforementioned new seats; as well as add personal screens with audio and video on-demand (AVOD) across both cabin classes. The cabin reconfiguration project began in the third quarter of 2008. The first 747-400 to be reconfigured (reg. RP-C7471) re-entered service in October 2008. The second reconfigured plane (reg. RP-C7475) was completed in May 2009, and the third (reg. RP-C7472) was completed July 2009. The fourth 747 (reg. RP-C7473) began reconfigured work in August 2009.

Mabuhay Class[edit]

Mabuhay Class seats, available on all aircraft, offer increased legroom, and personal screens (A320-200s with registration numbers RP-C3221 and RP-C3223 do not feature personal screens and instead have drop-down LCD screens). Currently, Philippine Airlines is the only Philippine carrier to offer business class on domestic flights. Boeing 777-300ER aircraft feature angled lie-flat seats manufactured by Recaro. Arranged in 2-3-2 configurations, seats have a pitch of at least 60 inches. Seats are upholstered in blue with silver-copper accents and feature 15-inch (38 cm) personal screens with AVOD (bulkhead and exit row seats feature 10.6-inch (27 cm) personal screens), as well as in-seat power. The 777-300ER seats feature a USB port where passengers can plug in their flash drives to listen to music from their personal collection on the aircraft's IFE system. Amenity kits with toothpaste, hairbrush, knitted socks, eye mask and toiletries from Clarins are provided on long-haul flights, regardless of aircraft.[83]

On other wide-body aircraft such as the A340-300, the older First Class cabin with seat pitch of 82-inch (210 cm) is sold as Mabuhay Class, alongside other recliner seats with seat pitch of 50-inch (130 cm). While there are personal screens, AVOD is not always offered.

Mabuhay Class seats on recently delivered A321s recline, and have a seat pitch of 39 inches (99 cm). The feature laptop power supply (both AC and USB). There is no IFE built into the seats but iPads are provided on select flights for no extra cost.

Premium Economy Class[edit]

As a hard product, premium economy class is available on A321s and selected A330s, as well as PAL Express flights using two class A320's in which case the business class seats are sold as Premium Economy. They are similar in design to standard/regular economy class seats but feature at least 4-5 inches more legroom providing a minimum of 34-36 inches of legroom. On some flights, passengers are also treated to complementary iPads.

Fiesta Class[edit]

Fiesta Class seats are also available on all aircraft. Footrests and tray tables are found in the seat in front, except for bulkhead and exit seats, where the tray tables are embedded in the seats and footrests are on the floor. A319-100s and A320-200s have drop down overhead LCD screens.[84] All aircraft in the mainline fleet feature audio entertainment to Fiesta Class passengers.

The Boeing 777-300ERs feature a new economy class seat also manufactured by Recaro and Weber, respectively. Their seats offer a pitch of between 32 and 34 inches. The new economy class offers AVOD and each seat is equipped with 9-inch (230 mm) monitors, mounted either on the seatbacks or armrests (for bulkhead and exit row seats). Similar to the Mabuhay Class seats, Fiesta seats on board the 777-300ER also feature a USB port that allows passengers to charge portable devices. The 777-300ER also have In-flight internet and mobile service.

In-flight Enhancement[edit]

Philippine Airlines recently introduced the iPad on-Demand on the trans-Pacific flights. Passengers can enjoy in-flight entertainment options such as movies, TV shows, music, games, and even magazines and newspapers.[85]

Philippine Airlines is the first carrier in the Philippines to offer Wi-Fi on board, which began on April 1, 2013. It is named as Philippine Airlines In Air. Passengers are able to make calls, send and receive text messages, tweets, email and surf the Internet while flying.[86]

Econolight and Budget Economy[edit]

In late 2008, Philippine Airlines introduced Econolight, which is its no-frills economy class product. Passengers can travel on domestic and selected regional routes. While the seat used is the same as PAL's full-service Fiesta Class, at the time of launch, food and headsets were not provided and they had to sit at the back of the aircraft. No physical barriers (i.e. walls or curtains) separate Econolight passengers from full-service Economy class passengers; instead, Econolight passengers were identified with a sticker attached to their seat. However, in November 2009, Econolight was enhanced to provide meals and passengers may already choose their seats at check-in. The inclusion of meals and seat assignments came at the expense of raising the base fares to almost double what it was when it launched. Other restrictions such as the lack of check-through facilities and lounge access for high-tier Mabuhay Miles members still remain though.

Econolight was phased out in 2010 but in 2013, PAL introduced a budget economy tier. Compared to Econolight, meals are provided but baggage allowance is still restricted. Also, mileage accrual is not possible on most flights.

Incidents and accidents[edit]

Although Philippine Airlines aircraft have been involved in a string of accidents since its founding in 1941, the majority of airline accidents have occurred with propeller aircraft during the early years of operations. Few PAL jet aircraft have been involved in accidents, the most notable being the explosion onboard Philippine Airlines Flight 434, masterminded by al-Qaeda and precursor to the ill-fated Project Bojinka.

Despite this, PAL is known for being the only airline in the Philippines to be accredited by the International Air Transport Association with passing the IATA Operational Safety Audit (IOSA), having been accredited in February 2007.[87]


Financial issues[edit]

PAL experienced huge financial losses for the past few years. On March 31, 2006, PAL’s consolidated total assets were amounted to 100,984,477 Philippine pesos, an 11% decrease compared to 112,982.6 million Philippine pesos balance as of March 31, 2005. On March 31, 2007, the company’s consolidated assets continue to diminish by 8% with amount equivalent to 92,837,849 Philippine pesos as against to 2006 figures. The declination of PAL’s assets was primarily due to net decrease in property and equipment and advance payments to aircraft and engine manufacturers, current and other non current assets. As of March 31, 2007, other current and noncurrent assets fell by 29% to 2,960.4 million Philippine pesos and by 20% to 2,941.7 million Philippine pesos “due to the effect of re-measurement to fair value of certain financial assets and derivative instruments”.[88] After carrying 17% more passengers in 2009 due to acquisition of additional aircraft and growth in the local market, PAL annual income report showed raise in revenues amounted to US$1.634 billion from US$1.504 billion in 2008. In spite of this, PAL expenses escalated as a result of more flight operations and higher maintenance costs aggravated by fuel prices fluctuations; forty-four percent (44%) of PAL income operating expenditures is utilized for fuel consumption.[89]

Labor Relations Issue[edit]

PAL has a history of labor relations problem. On June 15, 1998, PAL retrenched 5,000 of its employees, including more than 1,400 flight attendants and stewards to allegedly reduce costs and alleviate financial downturn in airline industry as consequence of Asian financial crisis. Represented by Flight Attendants and Stewards Association of the Philippines (FASAP), the retrenched employees particularly the 1,400 cabin crews seek remedy for their problem through judicial process and filed a complaint on the grounds of unfair labor practice and illegal retrenchment. It took a decade before it was finally settled. It passed the Labor Arbiter to the National Labor Relations Commission then to the Court of Appeals and, finally, to the Supreme Court. The Philippine Highest Tribunal favored the aggrieved party and on July 22, 2008, in its 32-page decision ordered PAL to “reinstate the cabin crew personnel who were covered by the retrenchment of and demotion scheme of June 15, 1998 made effective on July 15, 1998, without loss of seniority right and other privileges, and to pay them full backwages, inclusive of allowances and other monetary benefits computed from the time of their separation up to time of actual reinstatement, provided that with respect to those who have received their respective separation pay, the amount of payments shall be deducted from their backwages.” The Supreme Court further explained that there was a failure on the part of PAL to substantiate its claims of actual and imminent substantial losses. Although the Asian financial fiasco severely affected the airline, PAL defense of bankruptcy and rehabilitation are untenable; hence, the retrenchment policy is not justified.[90]


For more than 20 years, PAL monopolized the air transport industry in the Philippines. This came to an end in 1995 through the passage of Executive Order No. 219 that permits entry of new airlines in the industry. The liberalization and deregulation of Philippine airline industry have brought competition in the domestic air transport industry resulting to lower airfare, improvement in the quality of service and efficiency in the industry in general. At present, three airlines are competing in international and major domestic routes: PAL, Cebu Pacific and Air Phil Express (formerly known as Air Philippines) and two airlines are serving minor and short-distance routes: Zest Airways (formerly Asian Spirit), South East Asian Airlines (SEAir) and other small airlines.[91]

See also[edit]


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External links[edit]

Official website