Philippine Airlines
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| Founded | 14 November 1935 (as Philippine Aerial Taxi Company) 26 February 1941 (as Philippine Air Lines) | ||||||
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| Commenced operations | 15 March 1941 | ||||||
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| Frequent-flyer program | Mabuhay Miles | ||||||
| Subsidiaries | PAL Express Cambodia Airlines | ||||||
| Fleet size | 49 (+59 on order) excl. subsidiaries 70 inc. subsidiaries | ||||||
| Destinations | 39 inc. future destinations | ||||||
| Parent company | PAL Holdings, Inc. San Miguel Corporation | ||||||
| Headquarters | PNB Financial Center, Pres. Diosdado Macapagal Avenue, CCP Complex, Pasay City, Philippines | ||||||
| Key people |
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| Website | www.philippineairlines.com | ||||||
Philippine Airlines, Inc. (abbreviated as PAL and also known historically as Philippine Air Lines) operating as Philippine Airlines, is a flag carrier of the Philippines. Headquartered at the Philippine National Bank Financial Center in Pasay City,[2][3] the airline was founded in 1941 and is the first and oldest commercial airline in Asia operating under its original name.[4] Out of its hubs at Ninoy Aquino International Airport of Manila and Mactan-Cebu International Airport of Cebu City, Philippine Airlines serves 30 destinations in the Philippines and 39 overseas destinations in Southeast Asia, South Asia, East Asia, Middle East, Oceania, North America and Europe.[5]
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.
| Year | Traffic |
|---|---|
| 1957 | 160 |
| 1960 | 286 |
| 1965 | 729 |
| 1969 | 1330 |
| 1971 | 1302 |
| 1975 | 2842 |
| 1980 | 6033 |
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)
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]
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.[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.
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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 abolished the one-airline policy in 1988 that had begun under 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)
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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]
Asian financial crisis (1997-1999)
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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)
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.
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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.
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".[23][24]
Post-receivership history (2008-2011)
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On 4 October 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.[25] PAL continued its ambitious expansion plans, launching regional subsidiary PAL Express on 10 April 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.[26] 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.[27] Services to other destinations, including many destinations formerly served by PAL prior to the Asian financial crisis, began in June and July 2008.[28] 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 28 March 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 15 March 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' avidation 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.[29] 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.[29] On 30 March 2010, all Philippines-based carriers were placed in a EU aviation blacklist,[30] 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 19 November 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.[31] 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
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.[32] 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.[33] On Friday 12 November 2010 the Department of Labor and Employment approved the lay-off of 2600 employees of Philippine Airlines.[34]
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 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.[35] PAL's first major initiative under San Miguel ownership was confirmed on 28 August 2012, with a $7 billion order for 54 Airbus aircraft, comprision 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.[36][37][38] 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 partial ownership, 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.[39] In 2013, PAL was removed from the EU aviation blacklist after three years of negotiations, and the carrier immediately announced its European plans.[40] PAL subsequently launched flights between Manila and Heathrow to commence in November 2013, its first European destination in 15 years.[41]
New investments
In addition to its fleet modernisation 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.[42] 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.[43]
On 30 August 2012, president Ramon Ang announced PAL's intentions to build a second international airport to service Metro Manila.[44] 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,[45] 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.[46][47] However, on 12 July 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.[48]
Corporate management
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.[49] 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.[50]
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.[51] 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.[52]
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.[53] 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.
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 three non-hub routes, Bangkok-Delhi, Singapore-Jakarta, Vancouver-Toronto. 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,General Santos City, 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
Between 2007 and 2012, Philippine Airlines' route expansion had been hindered by the Philippines' international aviation safety reputation. Its expansion to the US had been hindered by the FAA's classification of the Philippines as 'Category 2', preventing PAL from its long-term plans to resume flights to New York.[30] On 30 March 2010, all Philippines-based carriers were placed in a EU aviation blacklist,[30] effectively banning PAL from flying to any European destinations.
The European Union ban was lifted from PAL in 2013 following several negotiations. In March 2013, the International Civil Aviation Organization (ICAO) lifted the Significant Safety Concerns (SSC) directive issued on the Philippine airline industry.[30] In June 2013, an EU Audit team inspected the Civil Aviation Authority of the Philippines (CAAP), lifting the ban on PAL on 10 July 2013.[30] PAL was the only Philippine carrier removed from the blacklist.[30] Nonetheless, PAL's services in the United States remain hampered by the 2008 downgrade of Philippine aviation's status to Category 2 by the FAA.[30] Efforts to lift the ban culminated in the FAA's inspection of the Civil Aviation Authority of the Philippines (CAAP) in May 2013.[30]
Since the San Miguel Corporation takeover in 2012, PAL has released firm plans to re-establish its intercontinental route network. Following the removal of the European Union ban on Philippine Airlines, the flag carrier has indicated that it hopes to reestablish direct flights to London, Paris, Amsterdam, Frankfurt, Rome and Madrid by September 2013.[30] Outside the EU, PAL applied for a Civil Aeronautics Board (CAB) permit to start 3-times-weekly flights to Istanbul Ataturk Airport in August, and 4-times-weekly flights to Domodedovo Airport in Moscow from September 2013 using Airbus A330-300 aircraft; however applications remain unapproved. 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.[30] Philippine Airlines also intends to fly to São Paulo via Los Angeles in anticipation of the demand for tickets from fans travelling to the 2014 FIFA World Cup in Brazil.[30]
On Sept. 15, 2013, it was reported that PAL will be flying to London via Heathrow Airport on Nov. 4,2013 with its Boeing 777-300ER planes.[30]
Codeshare agreements
Philippine Airlines has codeshare agreements with the following airlines as of April 2013:[30]
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.[30][30] FleetAs of October 11, 2013, the Philippine Airlines fleet (excluding all PAL Express aircraft) consists of the following aircraft with an average age of 9.3 years.[30][30] 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).
Future fleet 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][63] 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.[64] 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. Regarding the August 28, 2012 order of 54 Airbus jets, PAL President Ramon Ang stated that they are in talks with Boeing and are looking at plans for the Boeing 747-8 Intercontinental,[65] more Boeing 777-300ER's, and the upcoming 777-X Program. Philippine Airlines is also interested in the Boeing 787-9 Dreamliner, as well as the Airbus A350-900 and A350-1000 Programs.[66] 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[67] 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. Former fleet
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