Philippine Airlines' Identity Crisis: How Business Students See It

Some weeks ago, I came across an interesting commentary entitled, “Identity Crisis Part 2: Is Philippine Airlines Just for Filipinos?” by HybridAce101 on the flag carrier’s branding strategy. Regardless whether I agree with him (or her), it made me think. And that, in my book, makes for a good article. It made others think as well, as evidenced by the lively debate in the comments section that made for an even more interesting read. As a college professor, I was thinking, “It is stuff like this that students should know where there is an exchange of ideas to help develop their critical thinking.” So I decided to make the article a reading assignment for my business majors and asked for their take on the issue.

Copyright Photo: Diego Roxas/PPSG
To help you, dear reader, appreciate where these students are coming from, this is their profile: they are all female, second to fourth year business students from varying majors: accountancy, marketing, and finance. They come from a socio-economic class of ABC households.

Some have admitted to having never flown at all so instead they consulted their parents and relatives who have flown as overseas Filipino workers (OFW), business class travelers, and budget passengers. And then some students have flown here and abroad. A few were even able to interview friends who work in the airline industry.

Overall, the running sentiment is as follows:

·        It is extremely important for a national flag carrier to be careful with its business decisions. It needs to be always conscious of the fact that whatever it does, reflects the nation.
·        They don’t think Filipinos always prefer price over quality. If they opt for something less, it is perhaps only because they cannot afford otherwise. But given the chance, they are willing to shell out more for a more comfortable ride.
·        They disagree with PAL’s downgrading of services while still charging full-service fees.
·        They think that PAL is indeed violating branding principles with its handling of PAL Express creating a confusion in the mind of the market.
·        For them, a budget fare means you should not expect much.

Below are some of the more interesting points and arguments:

Sam K.: After reading about this issue, it seems to me that the only thing that matters to them is money. Placing myself in the shoes of an investor, I would want to profit from my investment. I SORT OF understand where PAL is coming from, sorting out their finances before everything else. But then again, why compromise quality that has been proven alright over the years, over the pressure that budget airlines have over your company? PAL shouldn’t be shaken by them because they have been part of this industry for so long which only means that they have been doing something right.

From a customer’s perspective, I can only give a prejudice reaction…According to my research, PAL is… 90th out of 100. I wouldn’t be surprised if I find myself scrolling past 90 once the 2014 ranking has been released.

To alleviate the pain of suffering the long hours of travel, In-flight Entertainment (IFE) would somehow reduce the anxiety of passengers who have a fear of flying. I wouldn’t really say that IFE is a cost because we can turn this into an investment, which is highly fundamental to the increase of revenue.

I think it’s safe to say that in the process of finding itself, PAL has completely lost itself.

Lu DG: Since PAL is known to be a legacy carrier, they don’t have the option to go lower. They should always aim higher.

Nadine E.: “We will never be the cheapest because we believe people will pay for the value if you get the product right.” This statement gives us the assurance that when we’re travelling with a true full-service airline,...it is actually all worth it.

I disagree that PAL should strip down its products and services just to compete effectively. Not everything is solved by cost-cutting. This goes to show that PAL thinks that Filipinos are okay…with cheap and inferior products. But the spending power of OFWs and Filipinos is increasing. Some are willing to spend extra money just to fly with a better airline and experience quality services.

PAL is our flag carrier. We can let other low-cost carriers get away with their cost-cutting strategies because they don’t carry the flag or represent the country.

In my opinion, I don’t think that the free stop-over program would help in attracting tourists in the country. Who would want to even transit to Manila whose airport was voted the “Worst Airport in the World”?

Naomi M.: If Manila became a fully-functional hub, people who have layovers have the chance to see and explore the city for a few hours or maybe even a day. However, PAL cannot do this on its own. For Manila to become a fully-functional hub, the Ninoy Aquino International Airport (NAIA) should be the one to take the first step and make developments. Since traffic will increase, our airport should be able to accommodate all these people and aircraft in a proper and systematic manner, which means, our airport is going to need more gates, more employees, higher security, better facilities, and overall improvement. If the state of our airport right now is already inferior compared to other airport hubs, what more will happen…if traffic increases?

Ayah A.: PAL could go cheaper but it will not necessarily gain the loyalty of customers so there’s a big chance that people will still choose other airlines.

Victorine S.: PAL sees a larger market share from the cheap and very frugal people that they lose sight of the people who have strong buying power and those who are willing to spend.

Jiara V.: I agree with PAL targeting mostly OFWs….PAL is developing a hybrid type of service that is in between full-service and low-cost. This fits perfectly the OFWs whose hard-earned money is meant for their families, and not for full comfort provided by the airlines…The money that they would be able to save from a budget fare could be used for something else like for example, pasalubong. This was what my father did when he…worked in the Middle East for a year. He chose a budget fare even though he had the money to avail of a better service carrier.

Why must we care for what these students think? As a professor, I want to see their analytical skills. But as a citizen, I want to see what the next generation of business leaders and entrepreneurs are thinking. And judging by these comments, the future looks promising.

---MG102



3 comments:

  1. Much has been talked about the pricing but let’s face it, PAL is not cheaper. You will find the occasional flight that is cheaper than others but when I compare ticket prices online, most times PAL loses to legacy carriers.
    One thing that has only been briefly touched on is customer service, that is where you earn the loyalty of your customers and sadly that is an area where PAL fails miserably. I am not only talking about the experience on board but the whole experience from selecting a flight to booking a flight and to resolving problems that arise, many of which are created by PAL themselves and their failure to strive for an excellent product but instead settle for mediocrity. I tried once to book a ticket online for a domestic flight and the website would not process my credit card. When I called, the friendly lady confirmed that they were having problems with the online credit card processing and was happy to take my card payment over the phone…. for an additional fee!!! I thanked her kindly, hung up and booked with Cebu Pacific. On my next trip with PAL (and I had several others in between where I didn’t use PAL because the ticket was too expensive, instead flew Cathay Pacific or Emirates) I wanted to rebook my ticket online which my fare allowed me to do but the website said my ticket was not eligible for rebooking so I called again and the lady on the other end rebooked my flight but then told me I then had to drive 30km to the PAL ticket office to pay the rebooking fee or I would be charged travel tax as well. Another time when I asked for a refund of the ticket, it took two months to process. The majority of the times when I had to call, it took extreme patience to even get through to talk to someone. Send an email, don’t expect a reply and time soon if at all. You call at two o’clock in the morning and PAL is “experiencing an unusually high volume of calls”. The flight is delayed and there is nobody at the gate to tell you what is going on. They will tell you that the flight will depart in 30 minutes but there is no aircraft at the gate and the list goes on and on. This is not how you gain customers let alone business travelers.
    I believe the reason PAL has survived for as long as they have is thanks to the huge number of OFWs who patronize their flag carrier. Its like stepping on home soil when they board the aircraft. As recent as ten years ago the country could not allow PAL to fail because there was no alternative but with other carriers now operating in the country and liberalization of air travel, If PAL were to go bankrupt, others would fill the void quite quickly and within a matter of a month or two life for the ordinary traveler would go on without PAL and that would be a great shame.
    If PAL wants to start making a sustainable profit they need to get their customer service right all the way through the whole travel experience. No doubt PAL needs to look at their cost but it appears they have their heads so deep in the books, looking at their bottom line that by the time they look up, there might not be any customers to take care of any more.
    I love the Philippines, I love the Filipino people and PAL still is the flag carrier and an ambassador for the country but it is doing business in an international highly competitive industry with low profit margins and PAL needs to step up its game or face extinction. As some have pointed out, most companies are usually in the business of making money but others are using it as a tax write off or a way to support other companies. Either way, there has to be financial gain. Lucio Tan and Ramon Ang didn’t get their riches by throwing money away and I doubt they will sustain PAL losses indefinitely for sentimental reasons.

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  2. Booking airline ticket from the USA to Manila, I had been utilizing travel sites in order to obtain the lowest and most competitive air fares. Those carriers from China like China Southern, China Eastern, Air China, China Airlines are the cheapest. PAL is expensive by around $400 or more per ticket plus it will stop in Guam anyway, so it cannot be called non-stop fare. Then comes the 5-star airlines which are less than PAL's fares ($200 or more per ticket savings on KE, CX, OZ and SQ). As I also have a frequent flier plan from Star Alliance, I usually select SQ and Asiana so that I can earn mileage as well.. I love to fly PAL but if there are better alternatives to save money, enjoy airline amenities including genuine service of crews, then can you blame me for being more of a logical decision-maker and less patriotic to my country's flag carrier (PAL)? By the way, I am a Filipino/American and have been residing In the states for 30 years .

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  3. It can be very difficult for me to cope with stress when flying, I often swear at my subordinates and understand that this is not normal. Tell me, can anyone try full spectrum cbd oil with thc? I read a lot of information about this oil on the Internet, but I would like to get real reviews about it. I would appreciate advice and information.

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