PAL flies high

The advances in modern technology, especially in the telecommunications industry, have made our lives easier and communications made faster. In terms of speed of transmission, it is now a matter of split seconds we get the text message or even photographs. These technological breakthroughs have definitely improved the quality of our jobs, especially us journalists. From my own experience, I used to write my news stories with the use of a typewriter until I learned how to use the personal computer. Now, we even have laptop computers and Nokia communicators to send our stories straight to the news desks.

But modern telecommunications have also its downside, when the computer system bogs down. Although such cases of computer systems going down occur once in a while, it is really a horror story if you’re caught in that situation. We experienced one such case of computer system breakdown while our press junket group was about to fly back to Manila from Hong Kong last Sunday. We had an inkling of things to come when we were refused to be checked-in at the  check-in counter of the Philippine Airlines (PAL). We were told to go straight to the PAL counter at the Chek Lap Kok international airport.  

To their credit, the PAL counter at the Hong Kong airport managed well the ensuing long queues of passengers checking in for the 6 p.m. flight to Manila. Since the computer system was down, the PAL counter people have to do the whole process of checking in the passengers and their luggage manually. And the PAL counter crew did this to about 200 passengers at that time in our flight back to Manila. Since Chek Lap Kok is a very huge airport, it was good that it has airport trains that take passengers from one terminal to another in its more than 80 boarding terminals.

Despite this computer system breakdown, our PAL flight took off without delay and we arrived at the Centennial Airport in Manila exactly on time. From what I have observed, much of the problems in delayed flights is also caused partly by certain passengers themselves. Pasaway, as we call this kind of people, who insist their way despite knowing the rules and regulations like in the size and weight of their hand-carry and checked-in luggage.

Nonetheless, PAL obviously enjoys a good share of the passenger market in Hong Kong despite the stiff competition with other big airlines servicing the same profitable route in the travel industry. Before we left Manila last Friday, PAL reportedly sustained a net loss of $11.8 million from July to September this year. But still, PAL emerged with a record profit of $22.7 million for the first half of its fiscal year 2007-2008 or a hefty 107 percent increase from the previous year’s level. PAL admits though they traditionally incur a loss during rainy months. It is a period of low travel season precisely because of bad weather.

Riding high on this impressive eight-year streak of operational profits and a three-year run of net profits, PAL will exit its receivership and from the Securities and Exchange Commission (SEC)-supervised rehabilitation before the end of the year. This was the bold target of PAL as stated by its president Jaime Bautista. PAL entered receivership in June 1998 after a series of external and internal crises, including a labor problem, that caused massive financial losses to the airline firm, shut its operations and was pushed to the brink of liquidation.

I distinctly recall how then President Joseph Estrada initially refused to intervene into this labor problem stalemate while he was still in his first few weeks into office at Malacañang Palace. But because it involves the country’s flag carrier, Estrada reluctantly negotiated with PAL chairman and chief executive officer Lucio C. Tan to convince the latter to enter into a “win-win” compromise with the striking PAL workers. But financially, PAL was bleeding in the red and it was only the $200 million in fresh equity infusion of Tan that saved the flag carrier from bankruptcy and put back to black its financial books.

In a joint report to PAL’s shareholders, Tan and Bautista agreed that it is the appropriate time to advance out of the SEC-supervised rehabilitation program given the very much-improved financial condition and the favorable outlook of the airline industry. In particular, Tan and Bautista highlighted PAL’s dramatic productivity gains for the past eight years, with the airline’s doubled revenue per employee rising by 10.5 percent yearly while passenger load factor increased from 66.1 percent to 76.9 percent, among these most notable factors.

For these feats, PAL was cited as the 6th most profitable airline in the world in 2005 by the International Air Transport Association and as the most profitable network carrier in Asia in terms of operating profit margin. The country’s flag carrier also was awarded the “Turnaround Airline of the Year” in 2006 by the Sydney-based Centre for Asia Pacific Aviation.

PAL is the only private sector flag carrier among the 10 member-states of the Association of South East Asian Nations (ASEAN). If the ASEAN wants to liberalize the airline industry to encourage tourism growth, PAL insists that other ASEAN governments must first withdraw all subsidies to their respective flag carriers to ensure fair competition. State subsidies distort the competitiveness in the airline travel industry. PAL has reiterated this position to the Philippine government to officially propose this to other ASEAN governments in the ongoing regional multilateral air traffic rights negotiations.

Despite this undue advantage by some of its airline rivals in the region, PAL has kept its fleet soaring high without any help from the government.  We had a smooth flight back to Manila and the only bumps we had in that PAL ride from Hong Kong was in our take-off and landing at the crude runway of our airport here.