PAL to expand international routes

MANILA, Philippines – Flag carrier Philippine Airlines (PAL) is set to expand its international operations as it adds five destinations to the Middle East and Australasia over the next two months with its continuous fleet growth.

In a report by think tank Center for Asia Pacific Aviation (CAPA), PAL would expand its Middle East network to a total of six destinations in just over two years, with the addition of services to Jeddah and Kuwait by early January 2016.  

Other existing destinations include Abu Dhabi, Dammam, Dubai, and Riyadh. Currently, PAL serves Dubai with five weekly frequencies but starting January, flights to Dubai will be increased to daily but with four weekly Manila-Dubai-Kuwait and three weekly Manila-Dubai-Jeddah flights. 

“PAL is hoping the new tag to Kuwait and Jeddah will improve its performance in the Dubai market. PAL will have uplift rights from Dubai to Kuwait and Jeddah which it intends to utilize. It is also hoping to carry significant traffic from Manila through Kuwait and Jeddah, enabling it to improve load factors on Manila-Dubai,” CAPA said. 

Furthermore, CAPA said the Philippine flag carrier would also improve its Australasia network from the existing five destinations to eight before 2015 ends, as services would be launched to Cairns, Auckland, and Port Moresby.

“Cairns will become PAL’s fifth destination in Australia after Brisbane, Darwin, Melbourne and Sydney, while Auckland will be its first destination in New Zealand, and Port Moresby its first destination in Papua New Guinea. PAL also serves Guam, a US territory in the South Pacific which is considered part of the Australasia,” CAPA said. 

PAL would initially operate four weekly flights on a Manila-Cairns-Auckland route starting Dec.1, while Port Moresby would be served with three weekly turnaround flights on Dec.18  

“PAL will rely heavily on sixth freedom traffic in these markets as well as fifth freedom traffic on the Cairns-Auckland sector. Port Moresby offers high yielding business traffic, while Cairns is primarily a leisure market,” it added.

On the other hand, CAPA noted PAL might face new competition from low-cost carrier Cebu Pacific in the Australasia network as it plans to launch services to Guam next year and enter the Melbourne market after the forged air service agreement between Australia and the Philippines last April. 

While PAL has been profitable over the last year due to low fuel prices and improving conditions in some of its markets, its international load factor slipped below 70 percent last June, the lowest monthly international load factor for PAL since 2012. 

PAL Holdings reported a P6.1 billion net profit for the first nine months of 2015 compared to P238 million in the same period last year. Passenger revenues were up 13 percent for the January-September period to P68.4 billion on the back of increased international passenger traffic.  

PAL’s international network would exceed 40 destinations by January 2016. The flag carrier is on track to carry approximately 6 million international passengers by year-end, a 20 percent annual passenger growth.