PAL seen getting back in the black in a year

Philippine Daily Inquirer
May 11, 2012
By: Doris C. Dumlao

SMC confident it can reverse airline’s fortune.

Flag carrier Philippine Airlines can turn profitable again in just one year, even by just using the existing fleet now under the management control of San Miguel Corp., SMC chief Ramon S. Ang said.

  “Based on the existing fleet, we are already confident we can turn it around,” Ang told reporters Thursday after the stockholders’ meeting of SMC’s hard liquor unit, Ginebra San Miguel Inc.

  “PAL is a very good company and a very good brand,” he said.

  PAL’s return to profitability one year after SMC’s takeover, Ang said, would be achieved through the implementation of a better sales and ticketing system and reduction in cost through higher utilization of aircraft.

  He said PAL would implement a “better system of selling to get a better yield and better pricing.”

  Ang also said that operating costs could be significantly reduced by increasing aircraft utilization from about 10.5 hours per day to 12 to as high as 16 hours daily, in line with international benchmarks.

  Doing so would help achieve PAL’s turnaround even before the planned refleeting program that Ang had extensively discussed.

  Two previously purchased Boeing 777-300E7 planes are set to arrive this year.

  Ang, who recently became chief executive officer of PAL, added that he would find ways to review current routes and introduce non-stop Manila-New York flights in the next three months.

  “We hope to go to Toronto this year,” Ang said, adding that PAL hoped to resolve international aviation woes so that the flag carrier will be able to fly to European cities like London, Paris and Rome.

  The European Union currently disallows carriers from the Philippines, Honduras and the two Congos to fly to its jurisdiction.

  Since 2008, the US Federal Aviation Administration has also downgraded the Philippines to Category 2 safety, effectively banning local carriers from expanding their operations in the United States.

  With the Category 2 status in force, PAL is limited to various destinations in the US, including Los Angeles, San Francisco, Honolulu, Guam and Las Vegas via Vancouver.

  But Ang said SMC was “doing something” to be able to fly to new destinations in the United States.