Too Ambitious!

CAPA labels PR flight to EU too risky

19 July 2013

After 15 year hiatus, Philippine Airlines (PAL) will be back in Europe with ever increasing and tense competition to the region amidst recession in the EU area. Can PAL survives the competition?

The Centre for Asia Pacific Aviation (CAPA) thinks otherwise and labelled the airlines desire to fly to Europe as "overly ambitious".

In its analysis, it found that its better for PAL to focus its attention "on the better performing Asia-Pacific market" which CAPA said is generally a more profitable option, considering the present economic environment.

"A large online network could help and quickly build PAL’s brand in the European market, where the carrier is relatively unknown. But operating several 12 to 13-hour routes in a market that is highly price sensitive and has limited premium demand is very risky", it said. 

CAPA added that "Such long-range flights are expensive to operate and PAL could struggle to achieve the yields necessary to make the routes viable, particularly as it will need to price competitively against more economical one-stop products".

Philippine Airlines (PAL) Chief Operating Officer and President Ramon Ang has different perception in mind saying that they have studied the European market more than once for so long that they are certain to be competitive in the Europe-Asia market. Its market study also found that daily flights to major European destinations gets better results than having to fly on odd-even days.

Ang said that PAL's ticket prices will be "very competitive" with other airlines, which offer economy seats from Manila to London at $1,200 or about P52,000.

PAL is targeting close to 1 million migrant workers in Europe as well as leisure travellers heading to the Philippines. But CAPA maintains that Gulf carriers are in better position to carry European tourist to the country given their much larger European networks.

12 comments:

  1. I think PAL is making the right decision in making a daily flight to EU countries. As of the moment I am not aware of any direct flights coming or going to EU from Manila, hence PAL is making the move. We Filipinos should support PAL on this endeavor.

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  2. I am with you on this one. Nonstop is certainly the way to go; I hate transiting through another airport.

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  3. This is a big risk move by RSA...i hope tumagal ng 1 year yang daily Europe flights na yan considering the high costs of flying to Europe..

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  4. Its convinient for people living in big cities. For us in northern europe its good with qatar emirates or singapore. Value for money and same price if u book early. I tried pr many times, but never made me satisfied even on their business with 777. Not state of the art. If u travel with ek or sq u can choose between 3 flights per day and very nice business lounges in the big airports

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    1. Its convenient for people who have direct access to the flight. If you live in Sweden or Norway, the gulf carriers are probably better doing the one stop shop.

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  5. yeah. B777s cabin is designed like its for short hauls flights. Business class section is like economy. theirs no privacy.

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    1. Its the privacy i like. Love 1-2-1 seating and the nice entertainment with wifi . Seating is very good with very nice width on the seats. Pal should try to be a premium carrier. They think quantity not quality. They should study other carriers and steel some ideas for them. Pal is way to outdated

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    2. Yeah. They should have thought of upgrading their cabin with their new orders. Their new B777s are almost outdated. Even Lufthansa was criticized when they introduced business class like that of PAL. Even the 3-4-3 economy seats feels so crowded seating side by side.

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    3. Thats why many european airlines go bankrupt. Thesedays people want what they pay for. And most people dont care if a premium carrier cost 100usd extra, its thr travel experience and airports that matter. if they get world class product il travel with them.

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  6. I hope manila will get world class airport like the new in doha . Hk sin. With easy commute to city center. Then it will be tempting to travel long haul from europe

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  7. PAL has been to Europe and they know what they are doing.CAPA is not an airline & based its analysis on statistics & flight schedules. If we follow their logic only the big legacy carriers will survive.

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    1. i agree with CAPA: Large Legacy Carriers with a bid network is the way to go. Niche players like PAL who define themselves as Legacy Carrier with Low Cost have little chance i the long-term to survive, especially if the airport home-base is as crappy is NAIA.

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