Friday, March 21, 2014

Are PAL Q400 Aircraft Bound for Cambodia?

The recent decision of Philippine Airlines to drop a number of routes and flights from the PAL Express network on March 1 has raised a series of questions as to where the Q400 aircraft used to operate those routes will be deployed.

cambodia airlines q400
Copyright Photo: Angelo Agcamaran/PPSG
In February, PAL Express revealed that it would drop some of its inter-island domestic services as part of an overall strategy to improve fleet performance. The cancellations affected flights primarily operating from Cebu, Davao, Iloilo, and Zamboanga.

However, Philippine Airlines did not announce that it was deploying the aircraft on any other existing Q400 routes leaving unanswered questions as to the fate of some of the Q400 aircraft in the PAL fleet. Although PAL Express cited "a strategy to improve fleet performance" as the reason for the route cancellations, Philippine Flight Network earlier speculated that it could also be to free the aircraft in order to deploy them to Cambodia for PAL's Cambodia Airlines venture.

Unverified reports from the Exciting Centennial of Philippine Aviation blog last month have indicated that Philippine Airlines has already transferred some of its Q400 fleet to Cambodia Airlines. But Philippine Airlines has yet to make a public announcement on the matter. The blog also added that a set of Airbus A320 aircraft from the PAL fleet would join Cambodia Airlines later this year.

cambodia airlines
Image Source: Cambodia Airlines
Last year, Philippine Airlines announced that it would be entering into a joint venture with the Royal Group of Cambodia to form a new flag carrier for the nation. Under the deal, PAL would invest $10 million in Cambodia Air in exchange for a 49 percent stake in the company.

In December of last year, Aviation International News reported that Philippine Airlines agreed to supply the new carrier with 16 to 22 aircraft worth an estimated $1.5 billion over a two-year period. Philippine Airlines reported that Bombardier Q400 aircraft and Airbus A321 aircraft would initially be deployed to the new carrier directly from the PAL fleet. 

According to the Phnom Penh Post, Cambodia Airlines hosted a career fair in the nation's capital in October to recruit captains, first officers, and cabin crew. Cambodia Airlines posted job openings for A320 and Q400 pilots. The airline requested for Q400 Captains with a minimum of 500 hours of command time or 2,000 hours total flying time with 500 hours in a turbo-prop aircraft. First Officers were required to have logged 1,200 hours total time with a minimum of 100 hours in a multi-engined aircraft.

However, doubts were raised last month when Ramon Ang, President of Philippine Airlines, was quoted as stating that the company was reviewing the viability of the Cambodia project due to political issues in Cambodia. This caused a series of media outlets to report that the joint venture deal with Royal Group of Cambodia was being shelved. The Centre for Aviation even affirmed that it was the right move to shelve the plans as Cambodia was not in need of a second carrier. But Philippine Airlines later released a disclosure at the Philippine Stock Exchange announcing that the deal was still to proceed.

Philippine Airlines stated that it still intends to pursue plans of launching a Cambodian carrier with its partner, Royal Group of Cambodia. This is in spite of fears of political unrest, aviation industry scepticism over the viability of a new carrier, and on-going lengthy delays. 

"We wish to clarify that on-going preparations for the completion of the contemplated joint venture agreement between Philippine Airlines and Inter Logistics Cambodia relating to Cambodia Airlines are currently being conducted," PAL stated in its disclosure. "As such, it is not true that the joint venture project has been shelved."

Cambodia Airlines aims to become the country's second full service carrier after Cambodia Angkor Air. It is a joint venture between San Miguel Corporation, part-owner of Philippine Airlines, and the Royal Group of Cambodia. But after missing closing dates in June and October of 2013, the venture has yet to be finalised. The deal has repeatedly stalled due to funding problems and the unstable socio-political environment in Cambodia.

If launch of the venture succeeds, Cambodia Air will compete directly against the country's sole national carrier, Cambodia Angkor Air, that is majority owned by the government. It will also face intense competition from carriers in neighbouring countries on international routes including Bangkok Airways, AirAsia, Korean Air, and China Airlines. 

Although the Centre for Aviation does not believe that Cambodia is in need of a second full service carrier, it released a study demonstrating that Cambodia is becoming one of the fastest growing aviation markets in Southeast Asia with growth in passenger traffic of nearly 18 percent for the second consecutive year. Expansion is now concentrated on doubling capacity in the country's two largest airports in Siem Reap and Phnom Penh.

2 comments :

  1. Apparently PAL is losing money left, right, and center. The flight to London is only 40-50% occupied. And the deal to acquire 4 A340-300's (gas guzzlers and outdated) has made many in the aviation world wonder just what gives with the airline. And now they're dropping domestic routes again.
    Word has it in the aviation world that PAL has borrowed to the hilt at local banks and can secure no further loans.

    ReplyDelete
  2. Hire someone who knows how to run an airline...

    ReplyDelete