Overcapacity looms: PAL

BY GENIVI FACTAO
Malaya

Philippine Airlines (PAL) sees overcapacity in the airline industry beginning next year but gave passengers the assurance that the airline would stay competitive.
PAL president Jaime Bautista said for as long as airline companies comply with civil aviation regulations, the flag carrier welcomes competition.

The labor troubles PAL is experiencing have prevented investors from coming in. But it continuous to expand and launch new flights, the next to India beginning the first quarter of next year, Bautista said.
Other airline companies are also expanding, including the Gokongwei-led Cebu Pacific which is acquiring more aircraft.

AirAsia plans to put up a venture airline operation next year in partnership with Antonio Cojuangco.
South East Asian Airlines (SEAIR) is partnering with Tiger Airways of Singapore.
SEAIR president and CEO Avelino Zapanta said SEAIR has leased two Airbus 319 aircraft, with a capacity of 144 seats, from Tiger Airways.

SEAIR will start its regular Clark-Singapore-Clark flight on December 16. From December 16 to 20, SEAIR will launch once daily flights, to be followed by twice a day flights.

"We welcome this development because it will start the bigger operations of SEAIR with their first regional international flight," Clark International Airport Corporation president and CEO Victor Jose I. Luciano said.

PAL’s sister airline Airphil Express likewise plans to increase its domestic and regional flights next year.

"We should welcome competition. We can’t prevent other airlines from expanding, but the problem is overcapacity," Bautista said.

He said an overcapacity may lead to a price war that will affect the loads of everybody.
The Lucio Tan-led airline company currently has a load factor of 70 percent.

PAL, despite the problems with labor unions, managed to meet its passenger volume target as of December 10 and hopes to exceed its 10 million passenger target for its fiscal year ending March.
Last year, the airline carried 9.2 million passengers.

Besides overcapacity, the airline industry still faces the challenge of high fuel prices.