Philippine Airlines Explores Long-Haul Fleet Options

After the lifting of flight restrictions to the United States, Philippine Airlines is now considering its options for the expansion of its long-haul fleet. According to PAL President Ramon Ang, expanding the fleet would enable the carrier to launch new destinations and switch to more fuel efficient aircraft.

pal boeing 777
Copyright Photo: Nico Reonisto/PPSG
In a text message with the Philippine Daily Inquirer, Ang confirmed that Philippine Airlines was currently studying whether to lease or acquire additional Boeing 777 aircraft, which has enough capacity and range to serve both Europe and the United States. The carrier is also evaluating the long-range Airbus A350 aircraft. 

Philippine Airlines already has six Boeing 777-300ER aircraft in its fleet that are set to replace the ageing Boeing 747-400 aircraft that currently travel from Manila to Los Angeles and San Francisco. PAL's flights to the United States usually have strong load factors except during off-peak months as the country is home to the largest population of overseas Filipino workers with an estimated three million currently residing in the country. 

It is believed that Philippine Airlines' routes to the United States are the carrier's most profitable routes making the country a key part of the airline's international expansion strategy and shift towards profitability. Philippine Airlines began acquiring the modern, fuel efficient Boeing 777 aircraft in 2009 to replace its ageing aircraft plying the routes. However, the Philippines was downgraded in 2008 by the United States to the Category 2 air safety rating preventing PAL from launching new routes or switching aircraft types on its existing routes.

This forced the airline to use the Boeing 777 fleet on routes to Canada, Australia, and Japan instead of its original plan to fly to the United States. However, now that Category 2 status has been lifted, the airline can now continue with its original plan to deploy its Boeing 777 fleet to the US. According to Ang, switching to the fuel-efficient Boeing 777 aircraft is expected to save approximately $160 million in annual fuel and maintenance costs. 

Philippine Airlines currently operates 26 weekly flights to the United States including Hawaii and Guam. The airline has plans to expand to US East Coast destinations including New York, Chicago, and Florida. On the West Coast, San Diego has been considered a possibility. But in order to expand, the carrier will need to acquire additional long range aircraft to support both its US and European expansion plans. 

Philippine Airlines placed a $9.5 billion order with Airbus in 2012 to acquire 64 new aircraft. However, the aircraft do not have the range capability to serve destinations in the United States and most of Europe. PAL currently has 9 A340 aircraft in its fleet that can handle long range routes. However, the aircraft are considered dated and fuel inefficient with poor in-flight entertainment. 

According to the Centre for Aviation, although PAL is debating between the A350 and Boeing 777, the airline would need to wait longer if it chooses the newer A350 as delivery slots are hard to attain. "The acquisition of additional 777-300ERs through leases or new orders becomes more likely as it remains the preferred type for US routes," said CAPA.

Meanwhile, the restoration of Category 1 status has created new opportunities in South Korea for PAL Express as the carrier can now use the 3,000 weekly seats that was originally allocated to it. Category 2 status prevented the expansion of local carriers in South Korea, the largest inbound tourist market for the Philippines.
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