Saturday, 29 August 2009

Philippine Airlines adds domestic flights

Jeremiah F. de Guzman

As part of an operation realignment plan, flagship carrier Philippine Airlines (PAL) will add domestic flights starting September as local demand for travel continues to soar.

In a statement yesterday, the Lucio C. Tan-led airline said new routes and destinations would be introduced next month. Daily flights for Cebu-Davao and Davao-Cebu destinations will be added, using the wide-bodied Airbus A330.

For the budget PAL Express airline, a daily flight will be added to the Cebu-Iloilo-Cebu flight using the 76-seater Q400 turboprop aircraft, while daily flights to Surigao and a twice-a-day service to Naga will also be introduced.

While the number of domestic passengers rose by 17% in the first quarter, the number of international passengers slipped by 8% amid slowing demand from the United States.

Under pressure to cut costs amid a global economic downturn, PAL said on Thursday that international flights would be reduced to match dipping passenger demand.

Flights to Los Angeles, for instance, are now down to seven per week from nine, while those for San Francisco have been cut to seven from eight per week. Next month, PAL will reduce its Vancouver flights to just five per week from daily. Flights to Japan, Australia and Hong Kong will also be trimmed to reduce the cost of operations.

The airline is also considering offering early retirement packages, executive pay cuts, and giving workers "breaks for a few days."

PAL will also sell a Boeing 737 to raise some $8 million to $10 million and will hold plane purchases except for Boeing 777-300ERs due for delivery this year.

PAL lost $301.4 million for its fiscal year ending March 2009 as a result of higher expenses brought about by the cost of operating more flights and last year’s record-high fuel prices. Fuel accounts for 44% of the airline’s expenses.

The carrier earned $30.6 million a year earlier.

For the year ended March 2009, revenues went up slightly to $1.6 billion but were not enough to cover operating expenses of $1.9 billion, up from $1.539 billion the previous year.

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