PAL eyes $300-M savings yearly by flying new planes

MANILA, Philippines - Flag carrier Philippine Airlines Inc. (PAL), a unit of diversified conglomerate San Miguel Corp. (SMC), could save as much as $300 million a year from the use of new Boeing 777 aircrafts from Boeing Co. for long-haul routes while redeploying other jets to handle shorter routes and expects to breakeven for fiscal year 2012.

PAL and SMC president Ramon Ang said in an interview with reporters during the cocktail reception for its third new B777-300ER that the use of the new aircrafts would increase the airline’s efficiency and profitability.

The 370-seater B777s currently fly to Vancouver, Japan, Hong Kong, Australia and Japan via Cebu and each B777 has two of the largest and most powerful commercial jet engines – the GE90-115BL. The aircraft boasts of exceptional fuel economy, efficiency, reliability and high levels of cabin comfort for its passengers, combined with unmatched levels of payload (28 tons of cargo) and range (7,825 nautical miles).

Ang pointed out that three more B777s worth $290 million each are expected to arrive in the coming months to serve as the workhorses of the airline’s planned nonstop, long-haul service to Europe and North America such as Toronto, Paris, and New York.

“In the months ahead, three more Boeing 777-300ER aircraft will be delivered to PAL. It means a modern fleet that we can be proud of. For our loyal passengers, this means more new exciting destinations. In the near future, PAL will fly non-stop to Toronto, Paris and New York,” he said.

The first three B777s were delivered in November 2009, January 2012, and June 2012. PAL is spending between $500 million and $1 billion to acquire about 100 aircrafts over the next few years.

He explained that the company intends to lease additional aircraft for shorter routes such as Middle East countries as it intends to realign its fleet under the long-haul and short-haul flights by October.

Our growth strategy for PAL is simple: Modernization of the fleet, expansion of the network and improvement of passenger service, he said in his speech.

According to him, PAL would also pursue joint venture with other carriers in Asia to increase the frequency of its flights to countries such as the US especially as the US Federal Aviation Administration has tagged the Philippines as a “Category 2” due to its low safety standards.

The list prevents airlines in countries from expanding services to the US and subjects to stricter surveillance.