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 takeover of San Miguel Corporation in 2012, has been taking steps towards reestablishing itself as one of Asia's premier carriers.
History
Beginnings (1935-1959)
Philippine Aerial Taxi Company
On November 14, 1935 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.[6] The company became dormant for six years on its scheduled passenger operation under its assigned routes.[4]
Philippine Air Lines
On February 26, 1941 Philippine Air Lines, Inc. by a group of businessmen led by Andres Soriano - hailed as one of the Philippines' leading industrialists at the time,[7] 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.[4]
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.[7] 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.[8]
On February 14, 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.
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.[4][7] A regular service between Manila and San Francisco started in December 1946.[7] During this time the airline was designated as the country’s flag carrier.[9]
PAL commenced service to Europe in 1947 with the acquisition of more Douglas DC-4s.[7] By 1948 PAL had absorbed the only other scheduled airlines in the Philippines, Far Eastern Air Transport and Commercial Air Lines.[10] 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.[11] 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[7] that would later be replaced by the Vickers Viscount 784, which brought the airline into the turboprop age.
First expansion and modernization (1960-1989)
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.,[7] 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 turbojet services to Cebu, Bacolod, and Davao using the BAC1-11.[7] 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.[7]
When President Ferdinand Marcos declared martial law in 1972, he implemented a one-airline policy. PAL was the lone surviving airline, absorbing Air Manila and Filipinas Orient Airways.[4] On March 10, 1973 PAL was re-designated as the national flag carrier.[10] PAL continued its expansion with the arrival of its first Douglas DC-10 in July 1974.[7] 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,[7] while the PAL DC-8 fleet was retired.[8]
In 1975 Philippine Airlines was headquartered at the PAL Building in Makati City.[12]
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 Philippine Airlines Boeing 747-200 in old livery
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.[7] Corazon Aquino also ended the one-airline policy in 1988 that had begun under Ferdinand Marcos.[4]
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)
A Philippine Airlines Airbus A320-200. The A320 was the airline's first narrow-body Airbus 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.[7] 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 while the NAIA renovation totaled P125 million.[citation needed]
In January 1995, Lucio C. Tan, the majority shareholder of PR Holdings, became the new chairman and CEO of the airline.[7] 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.[13]
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 31 March 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.[14]Cathay Pacific temporarily took over PAL's domestic and international operations during its fourteen-day shutdown,[15] 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.[16]
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.[10] 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 15 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.[7]
Receivership and rehabilitation (2000-2008)
File:PB031012.JPGA Philippine Airlines Airbus A340-300. Philippine Airlines was the first airline in the world to operate the full range of new-generation Airbus aircraft.
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.[7] 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,[7] while launching new services to Shanghai and Melbourne. A year later, PAL restored services to Guam and Tagbilaran.[17]
Like other airlines, PAL was severely affected by September 11 Attacks in 2001. In 2000s, PAL also experienced financial problem, loss jobs, and failure of restructuring caused 9/11 attacks in United States. 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.[4] The PAL RHUSH (Rapid Handling of Urgent Shipments) Cargo service was also re-launched during the same year.[7] 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.[7]
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.[18] 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.
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[19] 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 canceled previous orders for new 747-400s, ending the production of said aircraft.[20][21] PAL later signed a memorandum of understanding that opens the way for the introduction of flights to the southwestern Chinese city of Chongqing.[22] Service to Chongqing began on March 14, 2008, while service to Chengdu commenced on March 18, though the routes have been terminated after the Sichuan earthquake.
The Securities and Exchange Commission, on October 4, 2007, ordered the release of PAL from receivership. This move came nine years after coming within proximity of liquidation amid mounting bills due to the Asian financial crisis. Moments after PAL’s formal exit from rehabilitation, the airline announced plans to attract foreign investments through an international road show to tour around Asia, Europe and North America.[23]
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".[24][25]
Despite PAL's successful exit from receivership, with the downgrading of the standard of Philippine aviation by the United States Federal Aviation Administration from Category 1 to Category 2 in January 2008, former PAL president Jaime Bautista stated that as a consequence of the downgrading, its 2008 growth targets would be lowered. The FAA decision prevents 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.[26] This is in spite of PAL's efforts to expand its presence in the US market, with intentions to commence services to San Diego and Seattle and also restarting service to Chicago, and later New York City,[26] as well as Saipan.
On March 31, 2008, PAL announced that it had ordered nine aircraft from Bombardier Aerospace: three 50-seat Bombardier Q300 and six 78-seat Bombardier Q400 aircraft at an estimated value of $150 million,[27] all in preparation for the launch of PAL Express, its new regional subsidiary, which was unveiled on April 14, 2008. Using the recently ordered fleet, PAL Express was to primarily fly intra-regional routes in the Visayas and Mindanao from Cebu City, as well as secondary routes to smaller airports in island provinces that are not able to accommodate PAL’s regular jet aircraft: the first time PAL launched a sub-brand in its history, and also the first time since the Asian financial crisis that turboprop aircraft were incorporated into the mainline PAL fleet. PAL Express operations began on May 5, with eight flights daily between Manila and Malay, while hub operations from Cebu City commenced on May 19 with flights between Cebu and five points in the Visayas and Mindanao.[28] Services to other destinations, including many destinations formerly served by PAL prior to the Asian financial crisis, began in June and July 2008.[29]
In March 2010, Philippine Airlines again expanded its route network, 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, however both routes were suspended in 2011.
Boeing 777-300ER
A Boeing 777-300ER on final at Melbourne. Philippine Airlines ordered 6 aircraft, with deliveries started in 2009. (2010)
In December 2006, the airline initiated its widebody 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 to purchase 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 airline later exercised its options for the two planes. Originally intended for flights to the United States, the FAA category 2 downgrading has made expansion in the US impossible until Philippine aviation is restored to Category 1. They will also use the 777 for the Vancouver service on flights not continuing to Las Vegas (PR116/117) starting March 28, 2011.[30]
Philippine Airlines' first Boeing 777-300ER first flew on November 2, 2009, and was delivered to Philippine Airlines on November 19, 2009. The second 777 was delivered in January 2010 and the third 777 was delivered in June 2012. 5 more 777s will be delivered in November 2012 and the rest of 2013. The 777-300ER jet features 42 fully flat Business Class seats (2-3-2 Layout) and 328 Economy Class seats (3-4-3 Layout) with a total of 370 seats.
Labor disputes
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.[31] 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.[32] On Friday 12 November 2010 the Department of Labor and Employment approved the lay-off of 2600 employees of Philippine Airlines.[33]
Entry of San Miguel Corporation (2012-present)
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 PAL's aging fleet and rejuvenate Asia's oldest commercial airline, which has lost its status as the nation's top carrier in recent years. San Miguel president Ramon Ang said the $500-million investment had bought his company a 49-percent stake in PAL and its low-cost offshoot, Airphil Express (AirPhil). "The new investment will allow the two airlines to strengthen operations and stay competitive with the implementation of PAL and AirPhil's fleet modernization," said a joint statement from PAL chairman Lucio Tan and San Miguel. Ang also stated that they are planning to join a global airline alliance. Billionaire Tan, the country's second-wealthiest man, is PAL's controlling shareholder.[34]
Philippine Airlines (PAL) ordered 54 Airbus aircraft with a list price of $7-billion on August 28, 2012. The order consists of 44 Airbus A321, including 34 A321-200 equipped with sharklets, 10 A321neo and 10 Airbus A330-300. PAL will begin taking delivery of the first batch of aircraft in 2013. The A321 was ordered to enhance domestic and regional routes, while the A330-300s are to be flown on Australian and Middle Eastern routes.[35][36][37]
On September 28, 2012, Philippine Airlines announced it had exercised its option to purchase a further 10 A330-300 wide-body aircraft from Airbus, a deal totalling $2.5 billion.
New Airport
Philippine Airlines (PAL) unveiled their plan of building their own airport after acquiring 100 Boeing aircraft on August 9, 2012. They said that it will be the largest airport in the Philippines occupying 2,000 hectares of land near Makati City and if approved will be constructed in 2013 with four runways which can hold 1,500 take-offs and landings an hour. The airline said that a Korean Contractor will build the project.[38][39][40] The new airport will be built just north of Manila not near Makati. Detail plans will be displayed in early 2013.
Negotiation with Cayman Airways
In 2012, Philippine Airlines entered into negotiation 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.[41]
Investing in Cambodia Airlines
Philippine Airlines entered a joint venture with the Cambodian conglomerate Royal Group of Cambodia, headed by Kith Meng to form its first international airline venture, the Cambodia Airlines. PAL owns 49% stake while the Royal Group has 51% stake ownership. The new airline would start its operations by June.[42]
Corporate management
General Headquarters: Philippine Airlines location (PNB Financial Center, Pres. Diosdado Macapagal Avenue CCP Complex, Pasay City).
Philippine Airlines is owned by PAL Holdings (PSE: PAL), 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.[43] 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.[44]
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.[45] 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.
Major facilities
Philippine Airlines operates several aviation facilities in the Philippines. These include various training facilities for pilots and cabin crew, catering services, as well as a data center and a flight simulator.[46]
Training facilities
Philippine Airlines maintains training facilities both for its pilots and other crew, composed of the PAL Aviation School, the PAL Technical Center, and the PAL Learning Center.
The PAL Aviation School, located within the premises of Clark Civil Aviation Complex, provides flight training for its own operations and as well as for other airlines, the Philippine government and individual students. It currently operates ten Cessna 172Rs, five of which is fitted with a Glass Cockpit Garmin G1000 for student pilots' training with complete training facilities including simulators for the Airbus A320 and for turboprop aircraft (FRASCA 142). More than 5,000 students graduated from the PAL Aviation School, eventually joining the ranks of pilots at PAL and other airlines.
The PAL Learning Center, located in Manila, serves as the integrated center for Philippine Airlines flight deck crew, cabin crew, catering, technical, ticketing and ground personnel.
Located at the PAL Maintenance Base Complex in Pasay City, the PAL flight simulator, designed to simulate an Airbus A320, can duplicate all flight conditions complete with sound and visual system capability for day, dusk and night operations.
Airport and cargo services
PAL also maintains integrated airport ground handling services, cargo operations and a full catering service for it and other airlines.[47] This is composed of PAL Airport Services, Philippine Airlines Cargo and the PAL Inflight Center.
Based at both the Centennial Terminal (Terminal 2) and International Cargo Terminal of Ninoy Aquino International Airport, PAL Airport Services offers ground handling for seven international airlines calling at Manila, while Philippine Airlines Cargo processes and ships an average of 200 tons of Manila publications and 2 tons of mail daily throughout the country and 368 tons of cargo abroad daily.
Established in 1979, the PAL Inflight Center is the site of fully equipped in-flight kitchens and catering center of Philippine Airlines which also offer catering services for Japan Airlines, China Airlines, Korean Air and Northwest Airlines, preparing some 6,500 meals daily.
Philippines (Operated by PAL Express excluding Cebu, Davao, General Santos, and Kalibo)
International destinations
Philippine Airlines operates two hubs in Manila and Cebu. Virtually all PAL routes are operated from its hubs, with the majority of routes operating from Manila. Domestically, PAL flies to major Philippine cities from Manila and Cebu. It flies between Manila, and Cebu to a lesser extent, and cities in Asia-Pacific, the western United States, Canada and Australia. Many destinations served by PAL, especially destinations in the United States, Canada, Australia, Japan and Hong Kong, are areas with large overseas Filipino populations.[citation needed]
PAL currently operates four non-hub routes, Bangkok-Delhi, Singapore-Jakarta, Vancouver-Toronto and Sydney-Melbourne. In the past, PAL operated a number of domestic and international non-hub routes (most notably Iloilo-General Santos, Vancouver-New York, Vancouver-Las Vegas and Zürich-Paris), 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. 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 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/PAL Express on behalf of PAL since 28 October 2012.
Future Destinations
Philippine Airlines has planned to launch direct flights from Manila to New York and some key cities in Europe. However, PAL is being prevented since the FAA made PH under category 2, which prevents PAL to expand its U.S. network.[48]
Philippine Airlines (PAL) has filed with the Civil Aeronautics Board (CAB) permit to start flight to Moscow's Domodedovo Airport in Russia Capital starting September 2013, using the high-gross variant of Airbus A330-300 aircraft 4 times weekly.
Moscow flight leaves Manila on Tuesdays, Thursdays, Fridays, and Sundays, with Turkey flight leaving Monday, Wednesday, and Saturday. It is the second destination in Europe to be flown by PAL after announcing flights to Turkey beginning August 5. Both destinations are outside the European Union. PAL is also slated to fly daily services on the Manila-Kuwait route by April 2013 using Airbus A330-300, while daily flights to Darwin, extending 3 mornings a week to Brisbane and 4 mornings a week to Perth commence on 1 June 2013 using Airbus A320s.[49]
Philippine Airlines will soon to launch flights to São Paulo, Brazil, with stopovers on Los Angeles. This is anticipation of the demand for tickets from fans travelling to the 2014 FIFA World Cup in Brazil.[50]
In 30 March 2010, Philippine Airlines was placed in a European Union aviation blacklist, alongside all Philippine carriers. [52] This prevented PAL from reestablishing former European routes, such as flights to London and Paris.
Steps were taken to lift the European ban in 2013. In March 2013, the International Civil Aviation Organization (ICAO) lifted the Significant Safety Concerns (SSC) directive issued on the Philippine airline industry. [53] In June 2013, an EU Audit team inspected the Civil Aviation Authority of the Philippines (CAAP). The ban on Philippine Airlines was finally lifted on 10 July 2013.[54] PAL was the only Philippine carrier removed from the blacklist. [55]
PAL's services in the United States are hampered by the 2008 downgrade of Philippine aviation's status to Category 2 by the Federal Aviation Authority (FAA). [56] Efforts to lift the ban culminated in the FAA's inspection of the Civil Aviation Authority of the Philippines (CAAP) in May 2013. It is hoped that the Category 1 upgrade will be granted later in the year. [57]
Since the inclusion of Malaysia Airlines to Oneworld in 2012, Philippine Airlines is the last flag carrier of Southeast Asia's major economies that is not a member of any airline alliance. Especially following the partial acquisition of PAL by San Miguel Corporation, the airline has renewed its interest in alliance membership and is particularly targeting Oneworld; however, no firm deal has been made as of July 2013.[59][60]
Fleet
As of August 2013, the Philippine Airlines fleet (excluding all PAL Express aircraft) consists of the following aircraft with an average age of 9.3 years.[61][62] All aircraft were delivered to Philippine Airlines or leased from GECAS brand new; except for the four Airbus A340-300's (RP-C3435, RP-C3436, RP-C3437, and RP-C3438).
Short- to medium-haul international and domestic Asia, Middle East, Australia (To start when Europe service commences)
Mabuhay Class seats with personal TV screens but do not have AVOD capability. 10 New generation Airbus A330's were ordered on August 28, 2012,[64] An additional 10 aircraft was added to the order on 9/27/2012.[67] The current 8 aircraft will be transferred/given to PAL Express when the 20 new A330s enter service and will have a high density 414 all economy seat configuration. 12 of the 20 aircraft will have 18 Business and 350 Economy divided into 3 subclasses (36 premium, 264 standard, 50 low cost).[68]
Short- to long-haul international and domestic Asia, North America, Hawaii, Middle East, Europe
Mabuhay Class seats with personal TV screens but do not have AVOD capability. Old First Class seats are marketed as Mabuhay First seats and they can recline to flat bed seats. Four Ex-Iberia Airbus A340's are scheduled for delivery with two (2) RP-C3435, RP-C3436 already delivered as of 06/24/2013. 1 further A340-300 stored.[69]
Short- to long-haul international and domestic Asia, North America, Australia (To end when Europe service commences), Europe
Fitted with new long-haul product. All seats are fitted with personal IFE/AVOD. Deliveries to be completed by 2013.
Total
46
66
0
Aircraft registrations marked with "**" are leased from GECAS.[72]
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.[73] Furthermore, 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 on 1996.[74]
The 20 brand new A330-300's (High Gross Weight Model) will be Philippine Airlines replacement to its current 8 A330's which will be transferred to its low cost subsidiary PAL Express when the 20 A330's delivery is complete. These A330's will have a high density 414 all-economy seat configuration.
The old A340's of Philippine Airlines will be retired when the delivery of the 20 A330's will be completed.
In May 2006, Philippine Airlines announced its medium-term fleet plan, covering fiscal years 2006 to 2011. The plan aims to increase and/or replace the current fleet with new additional aircraft for a complete fleet of 43 wide and narrow bodied aircraft at the culmination of the re-fleeting and expansion program. A major overhaul of the narrow-bodied fleet includes the phase-out of all remaining Boeing 737 aircraft by October 2007, maintaining instead a fleet of 20 brand-new Airbus A320 family aircraft from 2008 onwards. The wide-body fleet plan also seeks to increase the current medium-haul fleet of eight Airbus A330-300 aircraft with two additional aircraft between 2007 and 2009, and the long-haul fleet of five Boeing 747-400 and four Airbus A340-300 with six additional aircraft between 2007 and 2013.
On December 6, 2006, PAL signed an agreement with Boeing for two Boeing 777-300ER aircraft, with a purchase agreement for two more aircraft. A separate agreement to lease two additional 777-300ERs from General Electric Capital Aviation Services (GECAS) was signed as well. In May 2007, PAL exercised its rights to purchase an additional two 777-300ERs for delivery in 2011.[20][75] The first 777 delivered in November 2009 and the 2nd 777 delivered in January 2010 are leased. The four 777s that were directly purchased and were slated for delivery starting 2011 were deferred to 2012 and 2013 following mounting losses and uncertainty over the return to a Category 1 rating.
As part of its domestic expansion plan, PAL has also acquired a fleet of nine Bombardier Dash 8 aircraft, three Q300s and six Q400s, for the use of PAL Express.[76] Likewise, Philippine Airlines has considered the Airbus A380, but the airline concluded that the A380 is too large for Philippine domestic airport infrastructure that the airline intends to fly to. The airline also added that there are only 2 airports capable of handling the A380, Ninoy Aquino International Airport and Clark International Airport.
As part of Project Winter, there were supposed to be 100 ordered aircraft. There has been speculation about orders for either Boeing widebodies or Airbus single aisle aircraft, but this has yet to materialize. Since there were already 64 ordered Airbus aircraft, there are high hopes that PAL may order Boeing 747-8i, Boeing 777-300ER, Boeing 777-9X or a Boeing 787-9.
Philippine Airlines is looking to buy 20 Boeing 777x[79] and Boeing 787's to replace their aging fleet of 747-400's and Airbus A340-300 aircraft. If this order is to be completed, Philippine Airlines will be one of the launch customers of the 777x with codeshare partner Emirates. This will also complete their Project Winter timeline with the orders of 100 new aircraft.
As part of the press conference in Manila Peninsula Hotel with the announcement of 11 new destinations, Philippine Airlines also ordered ex-Iberia Airbus A340-300's to handle more trans-Pacific flights in the United States. These ex-Iberia A340's are fitted with Iberia's A340-300 interior, and will be phased out with the current four Airbus A340 fleet.
The entire Philippine Airlines fleet of Airbus and Boeing jets were formerly maintained in-house at the PAL Technical Center, which consists of two hangars which contain 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 a four-bay hangar and workshops occupying 110,000 square meters in Manila’s Ninoy Aquino International Airport.[80]
Brand
Logo
This logo, PAL's first, was used from the 1950s until the mid-1960s.The second PAL logo, used from the mid-1960s until 1986.PAL's third logo was applied to aircraft during the 1970s, in concurrent use with the second one. The typeface used here was later applied to the second logo.
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. In the mid-1970s, a third logo, which removed the circle, 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 its current logo.
The current PAL logo features the same two blue and red triangles used in the second and third logos. However, a yellow sun, reminiscent of the flag of the Philippines, was superimposed on top of the blue triangle, and a new Helvetica typeface was used.
Livery
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 in 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.[81]
Another variant of the original livery used by PAL is somewhat similar to the current livery used today. 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" is instead of "Philippine Airlines" to denote that PAL is the primary flag carrier of the Philippines. However, this has sometimes leads to confusion leading some to believe 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".
Slogans and advertising
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
Mabuhay Miles
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.[82] 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
Base
Redeemable free flights and service class upgrades
1,000 Miles on eligible published fares with Philippine Airlines and partners.
Elite
25% bonus on actual miles flown for all flights on Philippine Airlines[83]
Mabuhay Lounge access and participating VIP lounges[83]
1,000,000 miles (1,600,000 km) accumulated from the beginning of one's membership[86]
As of October 22, 2004, Philippine Airlines has 27 Million Milers.[87]
Philippine Airline Customers can now enjoy their Mabuhay miles Frequent flyer program with "NO EXPIRATION ON THEIR MILES"
Cabin service
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 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 began reconfigured work in August 2009. On the other hand, reconfiguration of the Airbus A340s had been put on hold until further notice, as no word had been given on the matter. [citation needed]
Mabuhay Class (Business class)
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.
Newly refurbished Boeing 747-400s, except for RP-C8168, and the Boeing 777-300ERs feature angled lie-flat seats manufactured by Recaro. The 747-400s, which have varying configurations, offer 42, 44, or 56 such seats, while the 777-300ER offers 42. Arranged in 2-2 or 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.[88]
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 offered..
Mabuhay Class seats on recently delivered narrow-body aircraft recline, and have a seat pitch of 39 inches (99 cm). The cabins also feature AVOD,[89] and laptop power supply.
Fiesta Class (Economy class)
An economy breakfast onboard Philippine Airlines flight MNL-HKG
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.[89] All aircraft in the mainline fleet feature audio entertainment to Fiesta Class passengers.
Newly refurbished Boeing 747-400s and 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.
In-Flight Enhancement
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.[90]
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.[91]
Econolight
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.
Incidents and accidents
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.
Bad weather at the intended destination Zamboanga forced the crew of the PAL DC-3 to divert to Cebu. Fuel exhaustion then forced the crew to ditch their plane in shallow water, 40yds off the Mindanao shore.
The pilot continued to fly VFR into unfavourable weather over the jagged shoreline with practically zero visibility due to heavy rain. There was a heavy squall at the time and at the scene of the accident. Weather conditions in the Western Mindanao area during the day of the accident were generally unfavourable for VFR flights. When the pilot took off from Siocon the ceiling at the destination, Zamboanga, was below IFR minima.
Control was lost on take-off from runway 02 in almost zero visibility. The F-27 ran off the runway and rolled over stockpiles of sand and crossed the shoulder. The left wingtip struck a stockpile of rocks, causing the aircraft to cartwheel.
A hand grenade exploded inside the passenger cabin at an altitude of 13,000 feet (4,000 m). A safe emergency landing was carried out at Roxas Airport with a 9 sq ft (0.84 m2) hole in the fuselage.
Crashed in Nichols Field after a fire developed in the number two engine shortly after takeoff. It was also due to crew error in their inability to deal with a standard emergency.
During descent into Manila (at FL200) a bomb exploded in the right lavatory in the rear of the plane. The explosion caused a hole in the fuselage of 1.3m x 4m. A successful emergency landing was made.
The no. 1 engine ran down and temperature rose to 850deg. C. The aircraft, on base leg for an approach to Mactan, lost height and ditched. The airplane sank in 17 feet (5.2 m) of water.
The take-off was aborted at V1 when the pilots heard two unusual sounds from the no. 1 engine. The aircraft overran and came to rest against a wall and some vehicles.
EI-BZG suffered an explosion in the center fuel tank near the terminal of Ninoy Aquino International Airport while preparing for takeoff. The fire and smoke engulfed the aircraft before it could be completely evacuated. The explosion was similar to what happened to the ill-fated TWA Flight 800 six years later.
A small bomb exploded underneath the seat (seat 26K) of Japanese businessman Haruki Ikegami. Ikegami died due to injuries sustained in the explosion, but none of the aircraft's other 293 passengers and crew were killed. The aircraft landed safely. Investigators later found that Ramzi Yousef planted the bomb there to test it out for a terrorist attack he was planning, Project Bojinka. The plan was foiled after an apartment fire in Manila led investigators to the laptop computer and disks containing the plan.
On December 30, 1952, after takeoff from Laoag International Airport, an armed man forced his way into the cockpit. He pulled out a .45-caliber pistol and demanded that the plane be brought to Xiamen, in mainland China. The captain took over control from the co-pilot and put the plane into a steep dive. The hijacker did not lose his balance, and shot and killed the captain, forcing the co-pilot to retake control. A flight attendant had come up to the cockpit to find out what was going on; as he knocked, the hijacker shot him twice through the cockpit door, killing him. The co-pilot changed course to China and continued at 6,000 feet (1,800 m) over the China Sea until two Chinese Nationalists T-6 Harvard planes showed up. Both planes chased the DC-3 and sprayed machine gun fire. The pilot managed to escape until he met with other Nationalist planes, who forced the flight to land at Quemoy. At Quemoy the hijacker was arrested.[94]
On November 6, 1968, four hijackers demanded money.[95]
On March 30, 1971, six hijackers attempted to hijack a Philippines Airlines BAC One-Eleven in Guangzhou, China.[96]
On October 11, 1973, three hijackers surrendered after attempting to hijack a Philippines Airlines BAC One-Eleven in Hong Kong, China.[97]
On February 25, 1975, two hijackers attempted to hijack a Philippines Airlines BAC One-Eleven bound from Davao to Manila. They surrendered.[98]
On October 7, 1975, one hijacker on a Philippines Airlines BAC One-Eleven bound from Davao to Manila demanded to be taken to Libya. He surrendered.[99]
On April 7, 1976, a BAC 1-11 was hijacked by rebels for seven days, demanding money and the release of imprisoned rebels. The aircraft ended up in Benghazi, Libya.[100]
On May 23, 1976, Philippine Airlines Flight 116, a BAC One-Eleven en route from Davao to Manila, was hijacked by rebels, demanding $375,000 and a plane to fly them to Libya. The hijackers subsequently detonated a hand grenade in the cabin, which burned the aircraft and killing 10 passengers and 3 hijackers. The remaining three hijackers were caught and sentenced to death.[101]
On July 12, 1980, a hijacker of a Philippine Airlines flight from Manila to Cebu demanded money and wanted to be flown to Libya. The aircraft was stormed and the hijacker arrested.[102]
On May 21, 1982, a man with a hand grenade, demanding better conditions for sugar workers and coconut farmers, held 109 people hostage aboard a Philippine Airlines jet bound from Bacolod to Cebu. The plane was on the ground at Cebu. The unidentified hijacker also demanded pay raises for teachers and back pay for veterans.[103][104]
On May 25, 2000, Philippine Airlines Flight 812, en route from Davao to Manila, was hijacked by a man with marital problems. The hijacker was pushed out of the aircraft before arrival by a flight attendant and used a homemade parachute in escaping, with none of the other passengers and crew being injured or killed.[105]
Issues
Financial issues
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”.[106] 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.[107]
Labor Relations Issue
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.[108]
Competition
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.[109] Air Phil Express is an affiliate of PAL so technically speaking it is only head-to-head competition between PAL and its greatest rivalry, Cebu Pacific.
Primate Shipments
In 2013, PAL became the subject of a campaign lead by the animal protection organization People for the Ethical Treatment of Animals. The organization is campaigning - through online marketing and email campaigns, and protests - to get PAL to implement a policy banning the shipment of primates to laboratories. PAL is reportedly only one of three major airlines that partakes in this practice. On May 30, a nearly naked activist from the group painted as the Philippine flag protested in front of PAL's ticketing office in Seoul.
[110][111][112] In June 2013, a disruption occurred at the airline's Makati ticketing office. [113]
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