PAL Drops Airbus for Boeing widebodies

As San Miguel Takes Over PR

April 27, 2012

The 747-800 may be Philippine Airlines flagship plane as the carrier intends to do more business with aircraft manufacturer Boeing Co. this time around according to Ramon Ang, President of San Miguel Corporation.

The airline is now looking more at Boeing's 747-800 program than the A380 of competing manufacturer Airbus.

Ang, a pilot himself, said the A380 cannot fit in the Philippines domestic airport, pointing the airports of Cebu and Davao as very inadequate to support the aircraft type because of its size. Meanwhile, the Boeing Aircraft (747-800) can fit at other domestic airports the airline intends to fly like Puerto Princesa, Cebu, Davao and General Santos.

Ang said there are only two airports capable of handling the A380 in the Philippines, Manila and Clark. While the Boeing 747-800 can be flown to five different domestic points. He further pointed out that the A380 is also too big for the Philippines saying that there is no market for the 600 plus capacity aircraft.  The A380 seats 644 in two class configuration while the B748 seat 550 in the same class. 

Philippine Airlines operates full service bi-class model, and continues to operate doing so under new management.

The carrier is now finalizing plans to order new wide body fleets, consisting of 12 Boeing 787's and and possibly 4 Boeing 747's to replace its ageing fleet which consists of 5 B747s, 4 A340s. and 8 A330's. 

It has 4 Boeing 777-300ER on orders with 2 for delivery this year, and another 2 for delivery next year. It also plans to get 4 more of the same aircraft type so that by 2020 they may have a fleet of 4 B748, 10 777-300ER, and 12 B787. 

The first set of B787 is scheduled to be introduced to the airline in 2016 from aircraft lessors and will replace the A330 which will go to low cost subsidiary Air Philippines.

Meanwhile, the remaining narrow bodies will still be held by Airbus A320s accounting to 75% of PAL fleets, inclusive of Air Philippine Express orders.

Philippine Airlines new boss, Ramon Ang

The carrier’s two main owners Ramon Ang and Lucio Tan, will provide $1 billion capital build up to help fund the fleet expansion program that would buy the airline 80 new aircraft.

Ang however cautioned that the long-haul expansion plans depend upon the Philippines improving safety standards soon as they will fly immediately to New York via Vancouver, Seattle, San Diego and Chicago when the category rating of the country is upgraded to Category 1.  It already flies to San Francisco, Los Angeles, Las Vegas and Vancouver in North America, as well as Honolulu and Guam.

Next on the airline's agenda is the return flight to Europe which will commence sometime in 2016 with the arrival of long ranged twins, referring to Boeing's newest baby, the 787 listing London, Paris, Rome, Barcelona, and  Frankfurt as destination.

The country is currently blacklisted by the European Union and has a Category 2 rating from the U.S. Federal Aviation Administration for failure of the country's aviation body to meet international safety regulations.

Third on the Agenda is the resumption of flights to the middle east, to be served by its low cost carrier Airphil Express to fly the 2.5 million overseas Filipinos working there who regularly travel back to the Philippines. Airphil Express will be utilizing the A330 to be dispose by PAL upon the arrival of B787s.

As part of the airline's route rationalization, PAL will stop flying to domestic airports where there is not much premium traffic  and some regional flights to Air Philippines, while focusing on long- haul, full-service trips. PAL already axed Ozamiz this year with additional destinations to follow soon.

San Miguel Corporation (SMC) is Southeast Asia's largest publicly listed food, beverage and packaging company with $11 billion (US) in gross revenue. It earned $481 million (US) in 2011 from $460 million in 2010.