Philippine Airlines to Deploy Aircraft to Cambodian Venture

Photo Copyright: Angelo Agcamaran (PPSG)

Philippine Airlines is planning to deploy between 16 to 22 aircraft valued at $1.5 billion to Cambodia Airlines, its first international airline venture.

PAL announced last month that it would partner with Royal Group of Cambodia to launch a new airline that would launch service with flights to regional destinations and domestic routes in Cambodia. Under the agreement, Philippine Airlines will own a 49-percent stake in the new airline while RGC would assume a 51-percent share.

Ramon Ang, President of Philippine Airlines said that the company intends to deploy 8 to 10 aircraft in the first year while the remaining aircraft will follow in the second year. Cambodia Airlines is expecting to launch flights next June with two leased Airbus A321 aircraft for regional destinations while two Bombardier Dash 8 aircraft will be utilized on domestic flights.

Philippine Airlines intends to implement a code-sharing agreement with Cambodia Airlines which would boost PAL's revenues by $300 million to $400 million. Ang did not specify which of PAL's aircraft would be deployed to Cambodia Airlines but it is anticipated that it will be a combination of Bombardier Dash 8, Airbus A320, and Airbus A321.

PAL is looking to phase out its ageing aircraft as high fuel consumption is having an impact on profitability. Philippine Airlines is in the process of replacing its ageing aircraft with a plan to acquire up to 100 new aircraft. Last year, PAL placed an order for 20 Airbus A330 aircraft and 44 Airbus A321 aircraft. Twenty-one of those aircraft will arrive this year with the first A321 aircraft arriving in August. The new aircraft arriving this year are expected to increase PAL revenue by as much as 25% for its fiscal year ending March 31. Philippine Airlines is currently contemplating a possible order for new long-haul aircraft which could include Boeing's new B777X or the Airbus A350 aircraft.