PAL executives were here yesterday to observe talks on Gulf Air’s plans to launch flights between Bahrain and Manila.
PAL said the decision to suspend flights to Riyadh was due to losses triggered by a "massive oversupply of airline seats in the Middle East market."
"The recent series of increases in aviation fuel prices in the world market has added to the burden of maintaining the Riyadh operation, a liability other heavily subsidized airlines do not share," PAL said in a statement issued to the local media.
But PAL said it will continue "to serve the needs of travelers to the region, particularly Filipino workers, via existing code-share partnerships with Emirates and Qatar Airways." Negotiations with other Middle Eastern airlines are also underway "to expand and enhance the coverage of its code-chare network."
The suspension of the Riyadh flights, PAL said, is not expected to impact Filipino workers as PAL’s three weekly flights to the capital city account for less than four percent of the total number of airline seats available to Philippine-Middle East routes.
Six national carriers from various Arab Gulf states already operate a total of 43 flights weekly between Manila, Cebu, and nine other areas in the region, apart from five East Asian carriers that serve the Gulf market from the Philippines with 33 flights weekly via their hubs.
"These airlines operate 76 flights per week between the Philippines and the Middle East, with a deployed capacity of over 1.12 million seats a year. However, the traffic in this sector is not much over half a million passengers annually, the vast majority of them Filipino workers," PAL said.
The oversupply of airlines seats have prompted state-owned Arab Gulf carriers to bring down the prices of their fares to elbow out other airlines not only in the Middle East but also in Europe.
Because of this, four European carriers that used to have direct flights between Manila and the European capitals have either stopped or reduced service.
PAL recalled that market pressure had forced it to cut its service to Dubai and Jeddah in June 1998, and to Dammam in August 2001.
Meanwhile, PAL voiced its apprehensions about the proposed Manila flights of Gulf Air.
"Gulf Air’s first priority is to fly to Manila. If they do not secure the Manila rights, they may consider flying to Clark as an alternative. If they do so, they will have to invest in the route to develop Clark which is good for Clark. But if they get Manila, then it’s surely ‘Goodye Clark,’"said another document issued by PAL.