PAL scores Fasap for CHR suit PAL faring ‘better than expected’

Sunday, 19 September 2010 13:09
BusinessMirror

AMID a number of canceled flight bookings, Philippine Airlines (PAL) president Jaime Bautista said last week the overall performance of the airline’s international operation remains “better than expected.”

“It’s below budget but it wasn’t that bad. It’s still okay, and it’s better than expected in terms of loads, revenues and number of passengers,” said Bautista, referring to anticipated effects of the labor dispute of the company with the flight service-crew union.

Initially, PAL had reported there were 558 tourists from Hong Kong and mainland China who have canceled their bookings with the airline, which translates to around $167,400 in revenue loss. But the numbers have yet to be updated. “We still don’t have the latest data.  We have yet to determine the financial impact of the booking cancellations.”

After the tragic hostage-taking incident on August 23, a number of countries had issued a ban on travel to the Philippines, and Bautista said the negative advisories are an additional burden on them. “The aftermath of the hostage crisis, coupled with the labor dispute, will definitely hurt the airline’s bottom line. That is for sure.”

“In terms of number of flights, we just cut by one our six Hong Kong flights.”  On domestic routes, PAL is doing well. “We still mount the same number of flights for our domestic service.”

Hong Kong contributes roughly 6 percent of PAL’s total revenue, .04 percent for Macau and 3.3 percent for the rest of China. The United States remains at 25 percent and domestic routes 30 percent of the airline’s total revenue. Bautista said the load factor for Hong Kong and China still remains in the high 70s.

The notice of strike filed by its cabin-crew union “is ill-timed,” since it would scare away tourists and cause further damage to the flag carrier’s fragile finances, he said. Still, PAL will continue to service its domestic and international routes. “There is nothing to worry about.”

Under the law, parties have a cooling-off period, ranging from two to four weeks, after the filing of a notice of strike, during which the labor secretary will continue to mediate and find a compromise settlement. It is also within the labor secretary’s authority to issue an assumption order to prevent any work disruption in critical public utilities like PAL. --L. Lectura