PAL Holds High Hope to its Low Cost Subsidiary

August 27, 2010

Low cost subsidiary Airphil Express is the answer of Philippine Airlines to Cebu Pacific's dominance in the country and for PAL Holdings to remain competitive in the domestic air travel market says its Executive Officer.

According to PAL President Jaime J. Bautista, the airline had no plans to cater to the low-cost market. Instead, its sister firm Air Philippines, is being groomed to compete in the low-cost scene.

Bautista said the company’s Legacy carrier business model no longer works well in attracting customers for the domestic market, unlike budget carriers whose mode of operations are based on low cost carriers patterned after Southwest of the US or Easyjet or Ryanair of Europe.

“Growth is in the low-cost model,” Bautista said in a recent interview. “That’s why our rival Cebu Pacific is growing very fast.”

As part of its plans to beef up Air Philippines’ operations, Bautista said majority of its narrow-bodied fleet will be transferred to its LCC subsidiary. PAL recently transferred three of its 150-seater Airbus A320 aircraft to Airphil Express with three more expected in October and November.

A total of six A320s will join the AirPhil Express fleet this year. The first two are being operated by the airline on lease from Philippine Airlines, while the other four will be new aircraft delivered from Airbus during the second half of the year, which is part of the original PAL 320 orders.

"We want to position AirPhil Express as a low-cost carrier offering quality service," said David Lim, President of the airline. "The modernization of our fleet will enable us to increase market share while the industry braces for the eventual rebound."

PAL will be left with 9 Airbus 320 planes, which makes up bulk of its narrow body fleet of 18 jets. Over the next three years, Air Philippines would eventually operate all of PAL's 18 Airbus 320 aircraft to bolster its domestic and international operations.

However, Bautista assured that PAL’s operations would not be cannibalized as they will be retaining the wide bodied aircraft for its domestic and international operations, saying further that there would always be a market for passengers that want more luxury when they fly than what is offered by budget airlines.

Bautista also said they will have four more brand-new Boeing 777-300ER aircraft delivered starting in 2012 to cover more points across Asia Pacific and Australia, the Middle East and North America. PAL expects to fly to India within next year for a thrice a week service using Airbus 330. According to him, the airline will mount three direct flights a week to New Delhi from March 27 2011, and another three weekly triangular service via Bangkok for a total 6 weekly service. The airline has local traffic rights between Bangkok and Delhi sector.

The new 777 planes is expected to replace the airlines ageing Boeing 747-400 jets as the airline’s flagship aircraft which are due for retirement in 2016.

1 comment:

  1. since they have no pilots to fly the planes it is expected that the passengers know basic flying skills since they will have to pilot the airplanes themselves.