Saturday, 12 September 2009

PAL to get new Boeing aircraft

Kristine Jane R. Liu
BusinessWorld
http://www.bworld.com.ph/BW091209/content.php?id=041

Flag carrier Philippine Airlines, Inc. (PAL) will receive two new Boeing aircraft in November and January under lease deals, executives said Friday, but will postpone the purchase of four more aircraft.

The new aircraft are expected to extend the reach of the Lucio C. Tan-led airline while at the same time cut costs.

The delivery of four planes, meanwhile, has been postponed to 2012 and 2013, officials said, noting that the downgrade of the local aviation sector by the United States two years ago for failing to adhere to international safety standards has yet to be lifted.

Scheduled to be delivered this November would be PAL’s first Boeing 777-300 ER, said to be the most technologically advanced aircraft. A Boeing 777-300 ER can carry 365 passengers to a distance comparable to flying to Los Angeles and back to Manila non-stop without refueling. The second Boeing 777-300ER will be delivered in January.

Richard Miller, PAL’s chief commercial group adviser, said the company has yet to determine the destinations to be serviced by the new plane arriving in November, but said it might go to countries where PAL has existing operations, such as Japan, Australia, Canada and Hong Kong.

"We are currently monitoring the market. These initial aircraft were originally planned to operate in the US [but right now] we are looking at countries where we have existing operations," Mr. Miller told reporters.

The airline had agreed to buy four planes for almost $1 billion under financing from US Export-Import Bank. PAL officials pointed out that the downgrade of the airline industry in 2007 has restricted the addition of more flights.

"We are fortunate that the Philippines is doing [well]; the Asian market tends to hold up pretty well and we are optimistic on our outlook for the [industry]," Mr. Miller said.

"The market is changing quickly and fuel prices tend to tether ... The Boeing 777-300ER is the most sufficient airplane against fuel price volatility [and] is also quite suited for long-distance routes," he said.

Mr. Miller said PAL has been working with the Tourism department to attract more foreign tourists in the country, noting that international travel has been hit badly by the global economic crisis.

"That is the way to overcome the downturn. [We] want to increase our market share ... and we will come up with more budget flights," Mr. Miller said.

Randy J. Tinseth, Boeing Commercial Airplanes vice-president for marketing, said the strong ties between the Tourism department and the travel industry would fuel the growth of the airline industry.

Mr. Tinseth said travel demand should start stabilizing by 2012. "The Asia Pacific region will also rank as the world’s largest aviation market over the next 20 years, requiring 8,960 new commercial jets valued at $1.1 trillion," he said. "Twenty years from now, more than 40% of the world’s airline traffic will also begin, end or take place within the region."

Boeing expects the Asia Pacific region, which now accounts for more than 8,300 flights and 1.2 million travelers daily, to be the largest air travel market in the world in less than a decade.

Asia Pacific’s travel industry is likewise expected to grow at an average annual rate of 6.5% over the next two decades.

"This is clearly a difficult time in the aviation market but we do expect the growing Asia markets to lead the industry to recovery," Mr. Tinseth said, pointing out that strong economic growth in China, India and other emerging Asian nations would contribute to high demand for single-aisle airplanes.

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