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Old December 18th, 2005, 07:16 AM   #1
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Philippine Airlines' Road to Recovery

PAL's road to recovery more hard work than luck

MANILA, Dec 18 (AFP) - For an airline that was on its back just seven years ago, the road to recovery for Philippine Airlines (PAL) is nothing short of a commercial miracle.

PAL has already paid back more than half of its 2.2 billion dollars in debt, and president and chief operating officer Jaime Bautista says it will be free of its debt obligations well before the 2010 deadline set by its creditors.

From his ninth floor office at the Philippine Airlines headquarters in Manila's Makati business district, Bautista told AFP in an interview that he was confident the airline had got "over the hump".

"We survived September 11 and we got over the Severe Acute Respiratory Syndrome in the spring of 2003," he said.

"The road to our recovery has not been easy ... a lot of hard work rather than luck, but we are over the hump."

He says he is also confident that when the airline reports its results for its financial year ending March 31, the airline can expect another record profit.

In the fiscal year 2004-2005, the airline reported a net profit of 1.2 billion pesos (22.5 million dollars), reversing the loss of 643 million pesos that it suffered in the previous fiscal year.

Bautista said despite the high cost of fuel this year the airline should report a profit "similar to this year".

After signing a 840-million-dollar deal with Airbus on December 6 for nine A320s with options for another five, Bautista said the airline must move to the next phase of its modernisation program -- the wide-body jets.

Just who will get the order -- Boeing or Airbus -- and for how many aircraft Bautista isn't saying, but he expects the new orders to be placed well within the next five years.

At present PAL's wide-body fleet consists of 17 aircraft: five 747-400s, four Airbus A340-300s and eight A330-300s.

"We don't intend to replace all of these aircraft," Bautista said.

"What we intend to do is add to the fleet as most of our wide-body aircraft are quite new."

He said the replacement of PAL's narrow-body fleet has now been completed with the signing of the Airbus deal.

"The new aircraft should come into service between 2006 and 2008, with delivery on the options -- should we take them up -- between 2009 and 2012."

In addition to the aircraft ordered from Airbus, the airline intends to lease two new A320s and two Airbus A319s from GE Commercial Aviation Services.

Bautista said the decision to go with Airbus over Boeing came down to the fact that it "suited our requirements".

Founded in 1941, Philippine Airlines was halfway through a four-billion dollar refit, headed by new chairman Lucio Tan, when the full impact of the Asian financial crisis hit the airline industry in early 1998.

That year the carrier reported its biggest annual loss ever -- 8.08 billion pesos.

The airline's problems were compounded by a series of labour disputes by its pilots and ground crew which saw the airline file for receivership with the Securities and Exchange Commission in June 1998.

The SEC, with the help of the airline's creditors, set up a rehabilitation programme allowing the airline to operate while paying off its debts.

PAL was forced to cut its work force of nearly 15,000 by almost half, all engineering work was subcontracted out to Lufthansa, the fleet was reduced from 53 to 22 aircraft and routes were cut or discontinued.

It took the intervention of then president Joseph Estrada, who brokered a deal between the unions and airline management, to bring peace to the shattered flag carrier.

"It hasn't been easy," Bautista said. "But we are still flying and we are starting to grow again.

"Our chairman (Tan) is keen for us to fly to Europe again but the cost is still too high," Bautista said.

"Europe is a very expensive place to fly to but we will look at it again. We are not in a hurry."

"In November we began operating a service three times a week to Beijing and flights are around 70 percent full which is not bad considering what we have been through," he said.
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Old December 18th, 2005, 08:37 PM   #2
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it's nice to hear that.
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Old December 19th, 2005, 03:47 PM   #3
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Good news.
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Old December 19th, 2005, 05:39 PM   #4
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i look forward to their wide body acqusitions, their 747-400 planes are ripe for replacement in the next five years
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Old December 19th, 2005, 11:25 PM   #5
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Good news is always welcome!
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Old December 20th, 2005, 05:30 AM   #6
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Originally Posted by SKYLINEPIGEON
i look forward to their wide body acqusitions, their 747-400 planes are ripe for replacement in the next five years
Seeing as they operate a predominately Airbus fleet, I wouldn't be surprised to see the A380 replace their 744s, if for no other reason than to keep operating costs down. It's a good business move, just as it makes more sense for mostly-Boeing operators to use 747s.
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Old December 20th, 2005, 05:35 AM   #7
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Hopefully their quality improve cause honestly, I never enjoyed flying PAL!
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Old December 20th, 2005, 05:50 AM   #8
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Originally Posted by WANCH
Hopefully their quality improve cause honestly, I never enjoyed flying PAL!
Really? What aircraft provider do you usually ride on?
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Old December 20th, 2005, 10:41 PM   #9
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It's great to hear more good news, esp. w/ the new A319/A320 order.
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Old February 15th, 2009, 10:06 AM   #10
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PHILIPPINE AIRLINES - Asia's First Airline


Philippine Airlines (PAL) began life with a noble mission: to serve as a partner in nation-building. With this in mind, PAL took to the skies on 15 March 1941, using a Beech Model 18 aircraft amid the specter of a global war. It became Asia's first airline.

PAL through the years
Since then, PAL deeply involved itself in shaping the course of historic events. With its every takeoff and touchdown, PAL planted the seed of growth.

PAL has become one of the most respected airlines around the world with a young and modern fleet of aircraft and a route network that spans 31 foreign cities and 30 domestic points.

Service excellence
PAL's excellent service has won the hearts of travelers worldwide. This trademark has distinguished it from the pack and has stood guard in an environment that has grown more competitive by the day.

But PAL does not sit on its laurels. Realizing that it owes its success to its loyal passengers, PAL launched a campaign called "Call for excellence" to serve its market better.

Embracing e-business
PAL began embracing electronic commerce with the introduction of its Online Booking service that accepts ticket purchases and credit card payments for all flights. A new, improved website was also launched to serve the customers' needs more quickly and efficiently.

These will surely win the battles ahead for PAL.
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Old February 15th, 2009, 10:12 AM   #11
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Written by Lourdes M. Fernandez

TOULOUSE, France—It was 2 degrees outside, but there was nothing wintry in the mood inside a small room at the headquarters of Airbus SAS, the world’s biggest maker of commercial planes, as its COO signed off on yet another delivery—an A320—to a prized customer just before Friday noon.

John Leahy, chief operating officer of Airbus, was so pleased with this latest addition to a long-standing relationship with Philippine Airlines (PAL) that he kept ribbing PAL president Jaime Bautista about placing an order for an A380. Mr. Bautista, in turn, indicated that an A380, but for its cost ($320 million per), would be a worthwhile investment for an airline that had come close to extinction a decade ago and yet posted one of the most remarkable turnarounds in local business.

For now, an A380 is an aspiration still to be thoroughly deliberated on in Manila, perhaps with PAL’s no-nonsense chairman Lucio Tan; after all, even if an order were placed today, it could only be delivered in 2014.

That long queue for what Leahy and other Airbus officials describe as “firm” orders may be behind his bullish outlook in a season of economic winter around the globe.

Asked how confident he was of the Asia-Pacific market, given the downward adjustment in the forecast for A380 orders between February and May this year when he was interviewed at the Berlin Air Show, Leahy replied to a question from BusinessMirror: “Compared to the 747 (of rival Boeing), [we’ve still] got 80-90 percent of the market. In the large-planes category, things have understandably slowed down” owing to the record high fuel prices this year and the expected slowdown in travel as a result of global economic woes. In February this year, he had forecast 30 orders for the 525-seat superjumbo, according to a Bloomberg report, but that figure was down to 20, as airlines struggled to control spending while fuel prices soared towards midyear. The higher costs are seen to be compounded by anemic travel data as the global financial crunch, now morphed into an economic slowdown all around, kicks in next year.

A recent report of the International Air Transport Association (Iata) had said Asia Pacific airline losses might reach $1.1 billion in 2009, with 2009 described in wire reports by Iata director-general Giovanni Bisignani as “the toughest revenue environment”.

Still, Airbus’s Leahy said on the sidelines of the signing for the delivery of PAL’s A320 on Friday, “every A380 being built now is a firm order such that if PAL were to place an order for A380 today it would only get delivery of the plane in 2014. So I’m very hopeful about the future, [and] expect that, especially in Asia Pacific, the market will stay stronger than ever.”

The first three airlines that got their A380 deliveries were Singapore Airlines, Emirates and Qantas.

Leahy also cited China as an example, where a recession of 6-8 percent growth would already be such a dynamic figure for the rest of the world, given this season’s near-universal trend of falling growth.

Growth in the region may not be as fast as hoped for in the next one to two years, added Leahy, “but it will still be stronger” than elsewhere; hence, his confidence in the market.

The optimism is understandably shared by Mr. Bautista, a veteran of PAL’s bouts with crisis every few years. He described the 1998-1999 crisis of PAL as “near-death experience,” and attributed its survival to a single-minded determination to revive Asia’s oldest airline, anchored on Mr. Tan’s “go-back-to-basics” marching orders for everyone.

Maximizing opportunity amid adversity

The delivery of the A320 at Airbus headquarters in Toulouse completed the major part of PAL’s single-aisle fleet modernization program. The story of the financing for that plane validates what Mr. Bautista once described as the airline’s ability to take advantage of opportunities even in times of great challenge. In this case, the airline was favored by unprecedentedly low interest rates, and got a 2.3 percent rate, for 12 years, to fund acquisition of the 156-seater, $77-million A320.

The final details for financing PAL’s 22nd A320 were forged just a day before with Calyon officials by a PAL team led by Senior Assistant Vice President for Finance Cesar Chiong.

The signing with Mr. Leahy, the blessing of the aircraft and the nitty-gritty of the delivery were led by Bautista, before the gleaming A320 made the 19-hour ferry flight back to Manila Saturday night.

“This is a milestone for PAL. We now have one of the youngest and most modern single-aisle jet fleets in the world—anchored on the fuel-efficient Airbus A320 family of aircraft.”

The deliberate modernization drawing from a single aircraft family makes sense, Bautista explained, because having “one aircraft type, one engine type and one bi-class cabin layout” allows the airline the flexibility to quickly redraw route plans and schedules to dispatch these planes in order to maximize market opportunities, something crucial to surviving in a slowdown.

The delivery concludes the principal part of the modernization program that started in October 2006, when President Arroyo led the unveiling of the first of PAL’s 15 firm orders and leased units of the A320 family of jets. The airline’s single-aisle fleet now has 22 aircraft: 11 brandnew A320s, four A319s and seven older A320s.

All the 15 new aircraft are in service—the last one was pressed into service right the next day after it arrived from France—flying domestic routes and short-range sectors to Asian destinations.

Overall, PAL now counts 47 aircraft. Besides the 22 single-aisle jets, PAL also operates 17 wide-body aircraft—five Boeing 747-400s, four Airbus A340-300s and eight Airbus A330-300s. These mainly fly to medium- to long-range intercontinental sectors.


As I was saying uncle John Leahy made an offer to Lucio Tan through Tito Jaime Bautista which is too good to refuse. The offer is nowhere near the news. That is just how fact is as presently presented.

And to think I made similar pronouncement 6 months ago long before uncle John made it that if orders are made in 2009 delivery will be in 2014. Its what we call typical PR channel. Some sectors called it trade secrets which are not so clandestine at all. You must be wondering why a quote as early as 2012 is possible? Its like queuing for bank service or airline ticket at centennial terminal. When you come in you received a priority number for a desired service and you wait for your number to be called and you eagerly watched the screen as it slowly moved the number forward. Probably you made calculations already the time when its gonna be your turn. On a typical day some folks just can't wait the long queues because of other appointments that when their number is called they're not there and you suddenly got your turn in less than the time you thought it would be. Production line for aircraft orders work similar way. Imagine if all airlines defer the queue order, you suddenly end up in front even if you are the last. Thats how things work.

Tips on trade, when banks follow you around, I mean foreign investment banks, it means one thing, you make good business and sound investment too. And at 1.5-1.9% interest rate or a discounted list price, who could refuse such a treat. After all Boeing and Airbus does that quite very often.

And one last point, a chinese tycoon always remember those who made them succeed! The same reason why John Gokongwei still banks with China Bank.
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Old February 15th, 2009, 10:14 AM   #12
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Philippine Airlines kicks tires of Airbus 380
Manila Standard Today
Cocktales, Victor C. Agustin

NOT only did Jaime Bautista take a roundabout route to get to Toulouse, France last week to fetch Philippine Airlines’ newest Airbus 320, the PAL president even flew, gasp, Singapore Airlines.

Bautista’s Singapore-London flight, his first on the luxury airliner 380, was part of an elaborate courtship ritual by the European aircraft manufacturer keen to extend its 30-year partnership with Asia’s first airline, which is concluding its $840 million, fifteen A320-family fleet modernization program.

“I will send a first-class ticket to [PAL owner] Lucio Tan if he promises to buy the 380,” Airbus chief operating officer John Leahy told a bemused Bautista, moments after PAL signed the delivery papers for the wide-bodied plane.

Even before PAL took delivery of its latest Airbus, the 156-seater jet had already been booked solid for its first commercial flights yesterday, twice to Cagayan de Oro and twice to Iloilo out of Manila.

The record holiday traffic, and the rapid decline in fuel prices from its equally rapid ascent, gives Bautista confidence that PAL would break even or maybe post a modest profit for the third quarter, after having been buffeted by a $133-million loss in the first half of its fiscal year.

“There’s traffic, there are destinations, it’s just a question as to whether Airbus will give us a good price,” Bautista answered when asked if PAL was seriously considering acquiring the flagship 380.

Depending on the euro-dollar rate and the options, the 525-passenger superjumbo can easily cost $320 million upwards, a hefty jump from the $250-million price tag being quoted only four years ago.

According to the grapevine, a 380 or two have quietly become available on the market with an expansive Indian airline, Kingfisher, now seriously rethinking its options on the five A380s it had placed when the commodities surge was still a Jim Rogers’ dream.

Still, the earliest that a 380 could be delivered to the Philippine flag carrier, were it to place an order today, would be 2014.

In the meantime, PAL is taking delivery of two Boeing 777-300 Extended Range by the fourth quarter next year, in time for the holiday travel season.

That should provide PAL numbers-crunchers Cesar Chiong and Alvin Limqueco fresh fuel and passenger load parameters to crank up their financial calculators and compare the strong, and weak, points of the American airplane with those of the European competition.

But, that, as they say, is another story.
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Old February 15th, 2009, 10:20 AM   #13
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PAL to fly 777 morning flights to West Coast

Manila - After decades of conceding the morning market, the Philippine Airlines is now keen to take a bite of the long-uncontested territory of Northwest Airlines.

No less than PAL president Jaime Bautista has confirmed the flag carrier’s plan to launch a new daily non-stop service to the US West Coast that leaves Manila in the morning, just like the two Northwest flights.

The morning flight is expected to be launched by the fourth quarter, when PAL shall have taken delivery of the first of the two Boeing 777s, Bautista said.

But the new service, to complement the two evening flights to the West Coast that PAL now currently operates, would still have to depend on the US Federal Aviation Administration’s returning the Philippine civil aviation system to the so-called Category 1 status.

“We may be unable to use these new planes on our flights to the United States, and the cost advantage offered by the aircraft may only be realized by implementing our alternative plan for the deployment of the aircraft,” Bautista told PAL shareholders in late September.

Translation: If Uncle Sam continues the squeeze, PAL will deploy the 777 to the Middle East market. Victor C. Agustin
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Old February 15th, 2009, 10:25 AM   #14
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International passenger volume rises amid higher flying costs

MANILA, Philippines - International passenger volume in the Philippines rose from January to September 2008 despite the higher cost of flying, the Civil Aeronautics Board (CAB) said.

Data from the air travel regulator showed that international passenger traffic stood at 9.17 million from January to September, 8.56 percent higher than the number of passengers who flew to and from international destinations in the same months of 2007.

Inbound international passengers stood at 4.37 million as of September 2008, 19.75 percent higher than the incoming traffic as of the same month in 2007.

Outbound passengers rose at a slower pace of 6.92 percent with the 4.79 million passengers leaving the country for international destinations as of September 2008.

Lucio Tan's Philippine Airlines carried the most number of international passengers at 2.74 million as of end-September 2008. The Gokongweis' Cebu Pacific served a little over one million international passengers.

Top international airlines which served the Philippines as of end-September 2008 included Cathay Pacific with 1,067,270; Singapore Airlines, 415,828; Northwest Airlines, 383,104; Emirates Air, 321,191; Korean Air, 314,808; and Japan Airlines, 312,670.

The CAB said 43 international airlines are authorized to serve the Philippines market but only 35 carriers operated from January to September 2008.

Lufthansa Airlines was the last international carrier to cease operations in the Philippines in April 2008. Other carriers which no longer serve the Philippines despite their existing authority include Vietnam Airlines, Air Nauru, British Airways, SwissAir, EgyptAir, and P.T. Bouraq.

The CAB is still collating the full-year figure for 2008 but CAB deputy executive director Porvenir P. Porciuncula said the growth rate may have reached only ten percent. The country registered an 18 percent growth in international passenger volume in 2007.

Porciuncula said an even slower growth in international passenger traffic is expected along with a more adverse economic environment in 2009.

"With what is happening in the United States and Middle East, we may expect that there will be a slowdown in terms of traffic growth," Porciuncula said. - GMANews.TV
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Old February 15th, 2009, 10:30 AM   #15
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Beneath John Leahy's smile is a future deal worth more than a billion dollars
and Jaime Bautista is not talking

As a Consortium, Airbus S.A.S begun its official relationship with Philippine Airlines with the delivery of A300B4 planes. PAL actually bought 5 pieces of those great aircraft.

Its relationship with Europe however dates way back starting with Vickers of United Kingdom.

The Airbus connection started with the one eleven.

The BAC 1-11 story began in the 1950s as Vickers Armstrong and Hunting Aircraft. In May 1961, British United Airways, now British Airways, ordered the first 10 aircraft. First delivery was made in July 28, 1963.

By 1964 Philippine Airlines Ordered the Aircraft. Delivery was made in 1966. PAL's first 1-11 is registered PI-C1191/RP-C1161. It flew major domestic points starting from Cebu then Bacolod before it went to Davao.

Vickers Armstrong and Hunting Aircraft Company becomes British Aircraft Company(BAC) so the name BAC-111. By 1965, the Vickers plane officially became BAC. In 1977, it morphed again to become British Aerospace then morphed again to become part of Aérospatiale-BAC which produced the Concorde, the precursor of the Airbus consortium.

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Concorde was offered to Philippine Airlines in 1971.
It first appeared on Philippine Skies for sale and demonstration tour.
It went to 14 airports in 12 countries.
Goriob correctly pointed the month it was here sometime of June of 1972.
It arrived in the afternoon of June 10 from Singapore and stayed in Manila over night.
It flew the next day before 9am to Tokyo.
PAL evaluated its potential for US flights and Europe flights.
The Oil crisis of 1973 took a toll from 4 possible PAL orders.
PAL instead ordered the economically feasible DC-10

President Marcos revived interest on the Concorde in 1976.
He suggested operating lease in favor of re-nationalized Philippine airlines.
BAC wanted a sale for two. Marcos agreed if the British government would allow PAL to have landing rights at Heathrow.
But its feud with Malaysia, its former colony, hampered the deal. The deal was eventually abandoned.
Marcos made massive orders to Boeing in the face of the British refusal to let him enter Heathrow.
Learning the Concorde lessons, UK finally agreed upon France prodding to let PAL in when Airbus 300B4 was offered.

Philippine Airlines first European made plane is the Vickers Viscount 784 replacing the Douglas built DC-4.

The Philippines first official passenger jet is the BAC1-11 which it owned followed by DC-8 Douglas Corporation now Boeing. It operated the latter on operating lease while the former is operated through finance lease.

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Its first Boeing connection was the lone wet lease Boeing 707 before it was replaced by DC-8. DC-8 was replaced by DC-10 and subsequently the B747.
PAL officially owned a Boeing plane when it ordered the 727 and the 747-200 which was delivered to them in 1979.

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BAC1-11 served the Philippines for more than 25 years before it was replaced by Boeing 737's in 1992. However, only 3 planes were bought as the rest were operating leases from a Dublin Based Aircraft lessor. You must have noticed the EI-CVO, EI-CVN etc.. registries. Because in 1992 Airbus started courting PAL to get the first generation 320 instead. It succeeded ordering 12 with first delivery starting 1996 (RP-C2021) but managed to get hold of 4 frames because of the 1997 financial crisis leading to its knees in 1999.

Boeing, at the same time lobbied for its 737, 767, and 777 as PAL ordered already 8 new 744 and 4 leases. Airbus managed to show more tricks on its sleeves by giving more value for money other than the cost of its planes. PAL ended up ordering 8 330 with 4 leases and 4 340 with 4 more leases. In 2000, it managed to get 4 320, 8 330, and 4 340. All wide-body orders were completely delivered. PAL on the other hand took only 4 744s. For Airbus leniency during its trying times when it deferred the 8 320 orders, it pulled 6 more 320 orders totaling 15, excluding operating leases. Boeing on the other hand pushed them to the wall, so to speak. Thats why I said no love lost to them.

Although on its own, the Airbus economics proved to be better off for PAL's operation than its Boeing counterpart as shown 10 years later, starting with the 767 and the 777. It was not after Boeing introduced the 777-300ER series that its fortune started to reverse in 2000. World Orders were later converted to the next gen 777 series. It took PAL six years to order the plane because of its rehabilitation and settlement with Boeing although it manifested to acquire it as early as 2004. At that time, Airbus again manages to bring its magic trick to convince PAL to buy the 346. Had it not for the remaining 4 undelivered 747 deposit which would be forfeited in Boeing's favor if its not taken, PAL would have 5 346 and 3 leases. That would proved a blessing in disguise for them.

After intense negotiation, Boeing agreed to convert PAL's remaining 744 orders to the 777NG. But Airbus did not stopped there despite the 346 setback. Its starting again a conscious courtship ritual to enable the Tan led airline to consider the Queen of the skies and Mr. Tan is very pleased with the offer.

In sum, all can be told that Airbus is one step always ahead of Boeing.

The next big thing comes with the XWB.

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Old February 15th, 2009, 10:35 AM   #16
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Starting March 23, 2009, Philippines Airlines' will now offer dailly flights from Manila to Vancouver, BC utilizing A 340 aircraft. The airline currently flies five flights a week to Vancouver with continuing service to Las Vegas.

Pending FAA's lifting of Category 2 downgrade of the Philippines and with the addition of two brand new Boeing 777-300 ER aircraft by the last qurter of this year, this is how PAL's North America Schedule would look like by the peak fourth quarter of 2009 will look like:

- Manila - Los Angeles : 14x/week

One morning departure flight from Manila for LA utilizing 777 300 ER aircraft
One evening departure utilizing B744 aircraft

- Manila - San Francisco - 10x/week

Up from current 7 flight/week. The three extra flights will be utilizing PAL's A340 aircraft.

- Manila - Honolulu - 3 times/week

- Manila - Las Vegas (via Vancouver) - 4 times/week (down from current 5x/week)

- Manila - Vancouver - 7 times/week (up from current 5x/wk)

*New Service to San Diego via Vancouver - 3 times/week

We may also see additional frequencies to Guam and new service to Saipan.
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Old February 15th, 2009, 10:38 AM   #17
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December decline leaves McCarran with 7.7 percent fewer passengers in 2008

By Richard N. Velotta

Fri, Jan 30, 2009 (2 a.m.)

Last year ended on a sour note — another double-digit percentage decline — for passenger traffic at McCarran International Airport.

In December 3.2 million passengers arrived and departed from the airport, a 14.1 percent decline from December 2007, bringing the annual total of passengers to 44.1 million, 7.7 percent fewer than in 2007.

The five busiest carriers at McCarran had declines for the month, the worst being US Airways’ 31.2 percent drop to 468,890 passengers and United Airlines, which was down 14 percent to 186,037.

Southwest Airlines, the airport’s busiest carrier, had a 5.4 percent decline to 1.2 million passengers for the month.

Las Vegas-based Allegiant Air showed a 6 percent downturn to 153,630 passengers for December. The airline managed to squeeze out a fractional increase in passengers for the year with a total of 1.7 million.

Capacity cuts by many airlines to match the sluggish tourism economy resulted in most of the 27 domestic and international carriers that have flights at McCarran flying fewer passengers than they did last year.

Some airlines that restored previously canceled flights or added flights or increased capacity fared the best. Airlines that had more passengers to Las Vegas in 2008 than in 2007 include AirTran, JetBlue, Virgin America, Hawaiian, Aeromexico, Aviacsa, Philippine Airlines, Thomas Cook and Westjet in addition to Allegiant.

Despite the decline in passenger numbers at McCarran, it didn’t surrender its status as the sixth busiest United States airport, according to statistics released by the Federal Aviation Administration last week.

McCarran edged out Washington’s Dulles International Airport for the sixth position, the FAA said. The top five ahead of McCarran are Atlanta’s Hartsfield International Airport, Chicago’s O’Hare International Airport, Dallas-Fort Worth International, Denver International and Los Angeles International.

The only change was Denver International leapfrogging Los Angeles for the fourth position since 2007. Denver moved up primarily because of major growth by Southwest Airlines, which more than doubled its presence there.

Southwest, meanwhile, issued its fourth quarter and 2008 financial results last week. Although the Dallas-based airline reported its 36th consecutive year of profitability, it showed a net loss for the fourth quarter.

The company reported a loss of $56 million, 8 cents a share, on record quarterly revenue of $2.73 billion. That compared with net income of $111 million, 15 cents a share, on revenue of $2.49 billion for the same quarter in 2007.

Southwest attributed the loss to a 4.5 percent decline in revenue passengers, in part, because of capacity cuts, and a loss in the company’s fuel hedging program. The recent dramatic decrease in fuel costs forced Southwest to take a special charge of $117 million for its fuel hedge portfolio in the quarter.

The company also said it has noticed “softness in post-January bookings” after a fairly healthy holiday travel season that extended into January.
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Old February 15th, 2009, 10:40 AM   #18
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Philippine Airlines loses sight on Saipan

Hopes dim for Northern Marianas service

By Moneth Deposa

The possibility of Philippine Airlines extending air services to the Commonwealth are dim at present, according to the Marianas Visitors Authority.

MVA managing director Perry Tenorio said the CNMI has not received any communication from the Philippines' flag carrier regarding the revival of the flight service.

Although it may help CNMI tourist arrivals, Tenorio said the agency is not banking too much on the idea because the CNMI “lost” its potential market from the country when Manila opened its testing facilities for the National Council Licensure Examination for nurses last year.

Last year, PAL president and chief executive officer Jaime J. Bautista was quoted in a newspaper report that the airline company plans to have flights to Saipan, San Diego, Chicago, New York, and Seattle.

“MVA is not aware of any plan [of Philippine Airlines].and if that opportunity comes up, we need to evaluate fully well the impact on our tourism,” he said, noting the decline in arrivals from the Philippines, which usually sends hundreds of nurses to the island to take the NCLEX.

“Our goal [for the Philippine market] is like educational tourism for NCLEX.but since Manila opened its testing facilities we lost the only important component in keeping that market,” Tenorio said.

The CNMI recorded a 71-percent drop in arrivals from the Philippines after the nursing test was offered in Manila beginning August 2007. Before that, MVA posted 461 nurses who took the exam on Saipan the previous year.

Between August 2007 and July 2008, only 130 Filipino nurses took the exams at PearsonVue testing center in Garapan.

Nurses from the Philippines and other foreign countries need to take and pass the NCLEX to be eligible to practice in the U.S. and its territories, including Guam and the CNMI.

Between 2002 and 2008, the CNMI nursing board recorded 1,557 foreign nurses taking the exams on Saipan.

Barely a year after NCLEX was offered in the Philippines, the number of nurses who opted to take the test in Manila shot up to 20,410, resulting in the lower number of nurses taking the NCLEX on Saipan and in other areas like Hong Kong.

The drastic drop in the number of Saipan-bound nursing graduates from the Philippines was one of the major reasons cited by Continental Micronesia when it discontinued direct flights between Manila and Saipan effective July 16, 2008.
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Old February 15th, 2009, 10:45 AM   #19
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The Philippine Airlines Kingfisher connection

Kingfisher seeks to delay delivery of the A380

Is Philippine Airlines A380 on the cue?

February 5, 2009

Indian carrier Kingfisher Airlines Ltd. has been speaking to Airbus since early last year to try and defer again by two years the delivery of its huge Airbus orders, including that of the A380s amidst huge losses sustained by its fuel hedging strategy as a result of global fuel and financial crisis that swept the airline industry.

According to Flightglobal, A spokesman for Kingfisher in Mumbai officially broke the news that it wants to delay the deliveries of A380. He did not made comment when asked if Airbus has agreed to this request. The aircraft was proposed to be operated non-stop from India to the USA.

In 2005 the airline ordered five A380s for delivery in 2010 but production delays at Airbus slipped its delivery dates to 2011. Last year, Kingfisher's chairman Vijay Mallya told Indian media that the delivery date had been pushed back again to 2012 at the behest of the airline.

The airline already announced late last year that it would be scaling back its international expansion plans and would instead codeshare some of the international flights with its Indian rival Jet Airways. It has already delayed the delivery of some other aircraft from Airbus such as Airbus A320s and Airbus A340s.

It flies internationally to London Heathrow and Colombo. Kingfisher was hoping to launch services to San Francisco and several other international destinations, mostly in South Asia and Southeast Asia.

The Kingfisher slot was offered to Philippine Airlines in December at the time when it denied rumors of delivery deferment. Offers to Asia's first Airline is yet to be answered as its President continue to be mum about it.

A recent report of the International Air Transport Association (IATA) had said Asia Pacific airline losses might reach $1.1 billion in 2009, with 2009 described in wire reports by Iata director-general Giovanni Bisignani as “the toughest revenue environment”.

The Philippines however managed to be the single bright spot in Asia Pacific as it managed to grow by almost 10% as of September last year. CAB was upbeat that it would probably be more than that since the last quarter is always the peak season in Philippine Aviation.
John Leahy, Chief Operating Officer of Airbus said that if PAL were to place an order for A380 in December it would only get delivery of the plane in 2014. But with numerous deferments of delivery from Malaysia Airlines to China Eastern, PAL might have it by 2012 if orders are made within the next 6 months. With interest so low, the A380 might not be too far fetched for PAL. "So I’m very hopeful about the future, [and] expect that, especially in Asia Pacific, the market will stay stronger than ever.” said Leahy.

Philippine Airline was favored by unprecedentedly low interest rates in airline finance, and got a 2.3 percent rate from Calyon/Credit Lyonnais, for 12 years, to fund acquisition of the 156-seater, $77-million A320. The airline’s single-aisle fleet now has 22 aircraft, with 11 brandnew A320s, four A319s and seven older A320s. The delivery completed PAL’s $840-million order of 15 aircraft from Airbus over three years. It is also exercising its option for two more A320s for delivery in 2010, with a further option of three more planes for delivery in 2011.

With one piece of the puzzle solved, the ball is now with the captain that runs it.
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Old February 15th, 2009, 10:49 AM   #20
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Business World :
PAL forecasts loss due to fuel hedging

FLAG CARRIER Philippine Airlines (PAL) expects to post its first full-year loss since 2004, with a slowing global economy and oil price volatility having weighed down revenues.

Speaking on the sidelines of a briefing, PAL President Jaime J. Bautista yesterday said the company would likely post a loss for the 2008-2009 fiscal year, a reversal from a $30-million profit previously.

"We already reported a six months’ loss. For the third quarter we will lose again but hopefully in the last quarter we will be profitable or break even, that is our projection," he told reporters while declining to provide an estimate.

PAL, whose fiscal year ends in March, incurred losses of $113.8 million for the first two quarters. In the comparable 2007 period, the Lucio Tan-led carrier booked income of $22.7 million.

Mr. Bautista said the airline’s losses were primarily because of a hedging program to address volatile fuel prices.

Crude oil prices skyrocketed to an all-time high of $147 per barrel in July last year but are now just above $40.

To offset hedging losses, Mr. Bautista said the company would focus on keeping load factors high. He said the airline’s average load factor per flight, or the number of passengers on a plane relative to its full capacity, has stayed at more than 70%.

"We have to manage our revenues depending on the demand. If the revenues are low, we offer more seats at lower prices," Mr. Bautista said.

But he also said "On the passenger side, there might be a very small growth [in 2009] but we will be happy if we will be able to achieve the same number as eight million last year."

Mr. Bautista said PAL was expecting delivery of a leased Boeing 777 long-haul jet this November, which the airline plans to use for more flights to the United States, its biggest market.

A factor that has to be considered, however, is that the company and other Philippine carriers remain barred from mounting additional flights to the US, due to a Federal Aviation Administration (FAA) downgrade that hit Philippine airlines.

The FAA has pointed to below par Philippine aviation safety standards as having spurred the downgrade, which carried with it the bar on expansion.

The government wants the FAA to restore the country’s rating by July, banking on the creation of the Civil Aviation Authority of the Philippines.

PAL last posted full-year losses in the 2003-2004 fiscal year when it was still under rehabilitation. The airline went into rehab in June 1998 after suffering massive losses caused by labor problems and the 1997 Asian currency crisis.

It exited the turnaround program in October 2007, two months ahead of schedule. — with a report from Reuters
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