Identity Crisis Part 2: Is Philippine Airlines Just for Filipinos?

As the popular saying constantly reminds us, we have to “choose our battles.”  This is often said when battles simply are not worth the cost of fighting, or when we need a reminder that we just can't win them all. However, as one clever political analyst notes,"If you don't stand for something, you will fall for just about anything." This phrase can easily be applied to the Philippine aviation industry, where a battle is on-going between legacy carrier Philippine Airlines and an army of low cost carriers headed by chief rival, Cebu Pacific.

Copyright Photo: Lester Tangco/PPSG
With the rising dominance and growth of low-cost carriers in the Philippines, even the country's alleged full-service legacy carrier, Philippine Airlines (PAL), has been forced to strip down its on-board product and services on international routes in order to effectively compete. Many industry observers will argue that carriers in the US and Europe are following PAL's lead, though that cannot be said for certain. However, what distinguishes Philippine Airlines' approach to cost-cutting from that of their European and American counterparts is that PAL has cut costs across the entire carrier. Whereas European and US carriers have shifted closer to a "no-frill" model of flying on domestic and intra-continental routes, Philippine Airlines seems to be adopting that approach domestically, regionally, and even for long-haul international flights. When it comes to US and European carriers, long-haul flights are still as full-service as one can imagine.

However, it would be unfair to compare Philippine Airlines to a US or European carrier as the market in Asia is far more discriminating with completely different market demographics, a lower cost base, and a competitive landscape that leaves Philippine Airlines gasping for air.  Given that Philippine Airlines is within close proximity to the hubs of nearly half a dozen four-star rated carriers, PAL will inevitably be compared by the average consumer to its counterparts in the region rather than any US or European carrier.

Sadly, Philippine Airlines is moving in the opposite direction than its Asian counterparts shifting to tighter seat configurations, eliminating traditional in-flight entertainment, and adding further restrictions to economy class tickets. Unlike competing legacy carriers such as Cathay Pacific that has invested to enhance the on-board experience for passengers, PAL seems to be stripping down to their low cost counterparts. Somehow, Philippine Airlines believes that improved profit margins resulting from these low-cost practices will vindicate the carrier's decisions. But the real question to answer is whether passengers will continue to accept PAL masking itself as legacy carrier, charging the fares of a full-service airline, but offering the product of a low-cost carrier. It's a business model that many doubt will be sustainable in the long-term.

WHICH MARKET CAN SUPPORT A FULL-SERVICE BRAND?

Many have argued that Philippine Airlines has had to make these controversial cost-cutting decisions because the market for air travel in the Philippines is highly "price sensitive." PAL seems focused on overseas Filipino workers, visiting friends and relatives, and budget tourists. Ultimately, the airline is concentrating on what is viewed as the lower end of the market instead of the highly coveted last minute business travellers and discerning tourists that can afford to spend.

If Philippine Airlines is indeed concentrating on overseas Filipino workers, then it's quite possible that the nation's flag carrier may have misjudged the market. The complicated aspect of PAL's market demographics is that in terms of spending power, not all overseas Filipino workers are made equal. Although Filipinos in western nations may indeed be frugal, that does not mean that they do not have standards or expect quality. Most have previously travelled on a quality full-service carrier like Cathay Pacific or Korean Air and have done so at a price that is often less than what Philippine Airlines is charging. Ultimately, tourists and overseas Filipino workers must question alike, why pay extra for Philippine Airlines if the sole benefit is just a direct flight?

Although many may be curious about the service and product offered by Philippine Airlines, it is questionable at best whether they would book a second time with the carrier or claim any sort of loyalty. PAL certainly does not make it easy for them when their international long-haul products are not even competitive with their Asian counterparts. If you compare PAL's flagship aircraft, the Boeing 777, with the likes of Korean Air and Eva Air, it won't take passengers long to determine that the competing carriers offer a more comfortable experience given that their Boeing 777 fleet is configured with 9 seats across in economy class compared to 10 seats across flying with PAL. If you compare the Premium Economy cabin on PAL's new A330 aircraft compared to the identical aircraft flown by Cathay Pacific, PAL seats 9 people across, whereas Cathay Pacific seats just 7. To add further insult to injury, PAL is attempting to compete with some of these full-service carriers on routes to London and Sydney with older A340 aircraft that do not even offer individual screens with video on demand.

It would be a safe assumption that many domestic and overseas Filipino travellers have flown with Philippine Airlines until recently simply because they had no choice. When the aviation industry was liberalised and more players came in, passengers could finally afford to fly between any two points in the Philippines or even between the Philippines and most of East Asia. The new competition gave Filipino travellers the ability to choose their airline. Unfortunately, PAL seems to have lost its grip on a market it once owned and is now desperately positioning itself as hybrid carrier in between a full-service and low-cost carrier.  

However, the question remains, why would Philippine Airlines position itself closer to the budget market rather than following suit with legacy carriers in neighbouring Asian countries? After all, Philippine Airlines was Asia's first airline and for decades has been proud of its service as a legacy carrier. In spite of tough economic conditions felt in the entire region, carriers such as Cathay Pacific and Singapore Airlines have remained unapologetic about maintaining their price levels and service standards in spite of increased pressure from low-cost carriers. This is indeed precisely what they should do as they are all too aware that although their prices are often prohibitively high, their target market is clearly a passenger that wants to maximise comfort in the air above anything else. As Cathay Pacific Director of Sales and Marketing Rupert Hogg recently put it, "We will never be the cheapest because we believe people will pay for the value if you get the product right." Most East Asian carriers have followed suit including All Nippon Airways, China Airlines, Asiana, and Japan Airlines. Even carriers in less affluent countries such as Vietnam Airlines and Garuda Indonesia have also improved their quality. But what many of these carriers have in common that Philippine Airlines has failed to embrace is the ability to lure foreign travellers from other countries whether they be tourists or business travellers connecting to other destinations in the region.

Cathay Pacific Business Class
Image Source: Cathay Pacific
One key ingredient to the success of a full-service carrier is the ability to think beyond their home market. If you enter the websites of Cathay Pacific, Singapore Airlines, British Airways, Air France, All Nippon Airways, or even Air China, you will see that their home pages are tailored to cater to passengers in various parts of the world. They aren't merely promoting fares to and from their base city or even their base country. These carriers realise that not all of their passengers want to head to their respective base countries. In the case of Singapore Airlines or Cathay Pacific, not all traffic is bound for Singapore or Hong Kong but rather connecting to other destinations in the network whether it be London, Manila, or Sydney. Unfortunately for Philippine Airlines, they are narrowly and ignorantly focused solely on the Philippines as a tourist destination and the traditional travelling habits of Filipinos at home and abroad. If PAL wanted to build their connecting traffic in order to appeal to a wider market, but still maintain its focus on attracting tourists, this could easily be accomplished by offering a free stopover program.

Singapore Airlines In-flight Entertainment
Image Source: Singapore Airlines
Most legacy carriers have managed to develop successful low-cost arms that are distinct of the primary brand and do not undermine the quality or standards of the flagship product. In the case of Singapore Airlines, their budget alternatives are Tigerair and Scoot. In the case of Philippine Airlines, PAL Express caters to the price-sensitive domestic market. Unfortunately for PAL, they have undermined what was once a much stronger full-service brand by mixing in domestic budget operations with its long-haul and regional identity. Passengers can rarely tell the difference between Philippine Airlines and PAL Express as the branding is identical, making it challenging to distinguish two distinct products. The products were actually much clearer in the minds of travellers when PAL Express did business as airphil express. It also offered Philippine Airlines an opportunity to concentrate on its regional and long-haul products that would cater to premium international travellers. Sadly, PAL is obsessed with clawing back its domestic and regional market share from Cebu Pacific, failing to realize that it has first mover advantage in the international long-haul market. But now even that is under threat as Cebu Pacific launches long haul service to Sydney, Australia. With PAL's new all-economy configured 414-seat A330 aircraft, it is becoming even harder to distinguish themselves apart from budget carrier Cebu Pacific.

A FINANCIAL CENTRE IS NOT NECESSARY TO SET UP AN AVIATION HUB

One other challenge that many allege plagues Philippine Airlines from developing into a better full-service carrier is the lack of business travellers, especially those in the financial sector, bound for the Philippines. Indeed, that may be true for the Philippines but that does not mean that these types of travellers do not exist elsewhere and that PAL could connect them through their hub in Manila to those larger financial centres. 

If Philippine Airlines does plan to do that, they will certainly need to work harder to raise their standards and boost their image as a carrier for business travellers. This will ultimately require "out of the box" thinking. However, one cannot argue that this can't be done. Granted there are geographical issues but there have been carriers around the world that have had much less to work with and have been able to pull it off.

One of the best examples of this can be found in Iceland. Believe it or not, Iceland is a country of approximately only 325,000 people. It is hardly a large financial centre or even a tourist magnet. However, because of its strategic geographic location halfway in between Europe and North America, this tiny country's flag carrier, Icelandair, has managed to grow its fleet up to 21 aircraft covering 39 destinations across both continents. It is indeed an impressive feat for a country of only 325,000. It is a credit purely to what can happen when a carrier stretches beyond their home market. Closer to home, Singapore's population is just over 5 million. It is indeed a financial centre, but a sizeable portion of the traffic moving through the tiny city-state is connecting traffic.

In other words, just because passengers are not bound for the Philippines does not mean that Philippine Airlines cannot serve them and offer them a quality product that is uniquely and distinctly Filipino. In fact, it is one of the best opportunities to showcase the best characteristics of Filipino hospitality and what the country has to offer as a tourist destination, even when the final destination is not the Philippines. Given the busy nature of business travel, passengers are seeking relaxing atmospheres and the warmth of Filipino culture might just be enough to inspire someone to consider visiting the Philippines on a future trip. If you complement this with a modern and functional hub in Manila, all of a sudden the Philippines will have a competitive travel experience to offer premium travellers.

In short, Manila and the Philippines does not have to be a regional financial centre in order to set up a functional hub. All one must do is look to Jakarta and Saigon, which are hardly financial centres, but have managed to showcase local hospitality via their respective flag carriers, while attracting a number of foreign travellers connecting to destinations throughout the region. If you look to the United States, Minneapolis and Detroit would hardly be considered major financial centres. However, Delta Airlines has successfully managed to transform them into major hubs recognizing that most passengers are not beginning or ending their journeys in either of these cities.

In summary, Philippine Airlines is not and should not be considered just for Filipinos. PAL needs to transform Manila into a fully-functional hub that can connect passengers from points A to B. It does not matter whether passengers plan to originate or terminate their travel in Manila. However, if they want to attract some additional tourist traffic to the country, PAL should consider offering the free stop-over program that is employed by many other carriers around the world.

It is not necessary to be solely dependent on the domestic, price-sensitive Filipino market or the overseas Filipino market. While the market for premium service may not exist in the Philippines yet, there is no rule preventing PAL from looking elsewhere. Hubs located in major financial centres do indeed help but are not by any means a requirement to grow business. This lack of "out of the box" thinking is what is holding Philippine Airlines back from realising the standards of award winning carriers like Cathay Pacific.

Cebu Pacific is already planning to position its hub in Manila for connecting traffic when it introduces service to Sydney, Australia next month. The budget carrier intends to market not only connecting flights in the Philippines to the Australian market, but also flights to destinations in North Asia such as Korea and Japan. If Philippine Airlines is not careful, Cebu Pacific might creep up on this market as well.

-Hybridace101

Editor's Note: In the next installment of the Identity Crisis series, HybridAce101 analyses where the opportunities to create 'connecting' traffic can sprout and what Ninoy Aquino International Airport (or its replacement) must offer to entice the foreign traveller to use Manila as a connecting point.

75 comments:

  1. Jaime Bautista, when he was president of PAL, once remarked that PAL was as full service airline and that many passengers still prefer to fly in comfort. How I wish he was back!

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    1. I agree. I admire Ramon Ang's gung-ho attitude, but Jimmy Bautista was better.

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    2. Correct.
      Jimmy Bautista is more strategic than Ramon Ang. Now, PAL indeed has lost its identity.

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    3. PAL does not know its market. Filipino overseas contract workers can now afford to travel in style. Between Middle East and Europe, you can see Filipino expats travelling in BCL and FCL with their branded eyeglasses, bags and shoes. The Filipinos are generally want to look smart and that includes their choices of airlines.
      What a pity that Ramon Ang and his SanMig team could not understand the Filipino traveller.

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  2. some passengers just want to get to manila faster w/o stopovers.....which can be hassle for older passengers... most dont care about inflght entertainment... food and sleep and price is more of a concern... just my 2 cents

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  3. "If Philippine Airlines is indeed concentrating on overseas Filipino workers, then it's quite possible that the nation's flag carrier may have misjudged the market."

    So true. Especially for non-Middle Eastern longhaul routes planes without IFE are not going to cut it - even for price sensitive Filipinos (in fact, if they are price sensitive they'll definitely not be flying PAL on long-haul routes due to its inflated prices compared to flights with a stopover).

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    1. PAL is a disappointment. In this age of high tech gadgets and gizmos being so common and second nature to most people it is a puzzle how PAL chooses to fly with low tech or with no technology. No IFE? It is like going back 50 years in time when there was no TV for entertainment.

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  4. If PAL were to be a connector just like other legacy carriers, then it must have a new airport asap. NAIA sure aint gonna be it. LOL at least i got to experience the worst airport in the world. No air conditioning. As a result, many foreigners were sweaty and stinking. Aside from that, customs stole shoes from our pasalubong box. To attract connecting passengers, the Manila International Airport Authority must be overhauled too.

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  5. Who would want to even transit to Manila whose airport was voted "Worst Airport in the World" for two consecutive years? It should have been bulldozed to the ground a long time ago. It has given too much "shame" to the Filipinos.

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    1. That's why the next part of this series will focus or remind everyone of what needs to be done to NAIA or its replacement airport. In other words, "what is needed for the airport to make it comparable to the standards elsewhere?"

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  6. Great article. In summary: Cheap-o PAL thinks that Pinoys are cheap people who are okay to settle with cheap and inferior products.

    The spending power of OFWs and Pinoys are increasing, and are willing to spend a few extra $ to fly with better airlines... They are seriously underestimating the Philippine market...

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    1. But that's the thing - in London at least - flights to the Philippines are cheaper with better airlines than PAL.

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    2. London is actually much cheaper for economy: MNL-LHR is $1200+ (£750+) return though I hear the airplanes are still empty.

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    3. Departing from Manila, yes PAL is cheaper, but the other way around (round trip from London) airlines such as Cathay, Etihad or Qatar are usually cheaper.

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    4. Cheaper to London (or just a tiny bit more expensive) with EK, SQ, QR, and MH, with 30kg baggage allowance, IFE, and better food...

      Price sensitive market, my ass... These "executives" are acting like fresh out of MBA school newbies! Not everything is solved by cost-cutting!

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  7. Direct flights are not good enough as a selling point, sorry PAL. Travellers now, even the elderly and OFWs, are very used to transiting - and would rather do the extra 2 hours than spend 12+ hours in the PAL torture chamber... Airports like HKG, TPE, KUL, NRT, and SIN are so so good, that those 2 extra hours don't really matter to most!

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  8. PAL did survey a few years back and profiled their customer base. And the result of that survey is that the overwhelming majority of their passengers are still Filipinos and that these passengers are willing to forego all of these amenities and as long as its the cheapest fare out there.

    So yes, PAL did its research and what you are seeing now is a result of that.

    The only way for PAL to compete in the Middle East is by lowering its CASM and increasing RASM against the ME3. They will never be able to compete with the likes of EK, QR or EY that are able to fill the front of the cabin and subsidize the back. The only way for PR to compete is volume, which lowers their CASM and allowing them to offer competitive/lower fare compared to the competition.

    The profile of PRs clientele isn't the same as that of the CXs, SQs, KEs or the OZs. They are able to offer cheaper fare at the back since they can fill the front of the plane. PR doesn't have those passenger profile.

    And last I checked, the strategy is working for PR and they are earning again.

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    1. Just to add:

      Those mono and bi-class A333s were meant for the Middle East and Regional, and were never intended for long-haul. And as everyone already knows, those A343s are just stop gap.

      The original orders of the A333s were divided into 8-6-6. 8 monoclass for ME, 6-biclass for regional, 6 - longhaul. As to configuration of the longhaul, we may know that with RP-C8771...

      A lot are forgetting, that for intents and purposes, PR is still reeling from its almost collapse and just starting to get on its feet.

      Its being compared to GA, but GA just lost over $200 million in the first half of 2014... TG and MH are also loosing money, and SQs profit also decrease by 70%...

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    2. PAL should really retire all its people who brainstormed to downgrade PAL to a LCC airline just to make money. The reason is, these people do not have the creativity and do not have the right ideas to make PAL work as a full service airline. Just resign people. Look around you, Air Asia and Cebu Pacific are slowly offering premier economy and business like seats which PAL decided to give up in some destinations. Is PAL now in the mindset of exchanging places with these LCCs and aiming to dethrone them in the LCC market?

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    3. It's only been ~2 years since SMC took over right? Well they're doing something right. Their financials have gradually improved ever since.

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    4. Classic fresh-out-of-school MBA argument! Short term profit, sacrificing long term image and company welfare... Meanwhile, GA may have lost some money this year, but it's gaining some loyal international premium customers, and getting awards left and right - a better long term strategy. Sorry fanatics, but it's not just about short term numbers, its about sustainability.

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    5. GA may have incurred a loss, but why is it that so many of these legacy carriers manage to sustain these losses and still offer a superior product? Because they think long-term. Do you see them downgrading quality? Of course not, because they want to remain competitive while maintaining a high standard. Let's not gloat in PAL's recent profit just yet. After all, it was just in April that PAL reported a P11.85 billion net loss in the 9 months ending December 2013. On the other hand, CX just posted a $44 million profit for first half of 2014. So clearly, both business models can be profitable. But the true question is, which is sustainable?

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    6. For me, it's more about getting their financial sh** in order first..Decrease costs and consolidate the company. How can you make a world class airline when you're not even making money.

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    7. Do I agree that PAL has to sort its financial house out? ABSOLUTELY! And that's why I am arguing that arguing that they should have targeted the premium market from the beginning: that's where the money is.

      CX's profit figures have been reported to be $45M or £27M: http://www.bbc.co.uk/news/business-28768029

      Do they face pressure? YES! But they know their market, they know that connecting traffic is what drives their business because although HK is a financial centre itself, not everyone has the time to head there.

      What if the Philippine economy becomes unattractive? What if for some reason Filipino spending power on airlines zaps? PAL will have to look elsewhere.

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    8. To those who seem to defend PAL's practices, let me ask you this: are you saying that PAL is free to be as bare bones as it wants to? That PAL is free to only provide the bare minimum of the regulators' standards as long as its bottom line is as black as the night sky? Are you saying that you would rather see PAL provide service only rivalled by RyanAir as long as its profits keep rolling?

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    9. I don't think defending PAL is the correct term, nobody here gets paid by the airline to defend it. It is rather showing both sides of the picture in the name of balance commentaries. You have presented a very excellent point of view in terms of service quality, amenities etc missing in current PAL's practices but you missed out the fact that the airline has been losing money for many years. An airline is a business and sad to say Yes it must make money to stay afloat in this competitive industry. Place yourself in the shoes of an investor, you will definitely want a return of your investment.

      There are two ways to achieve profitability: first to improve in-flight amenities to lure more passengers and compete with other legacy carriers and second is to position itself between these legacy carriers and a LCC. The first is risky as it will have to invest more and will raise its operating expenses, believe me PAL will not be able to compete with CX, SQ, EK and the likes no matter what they do in the near future. The second is a more conservative but a safer approach.

      I absolutely agree with you that PAL should consider transfers who are non-Filipino passengers to point B and establish Manila as an aviation hub. However don't you think that the management who run the airline themselves have not looked into this? Why did they not implemented this, the reasons are obvious. NAIA doesn't have the facilities, who would want to make a stopover to an airport considered worst in the world currently operating over its designed capacity where delays and passenger complaints are rampant while all our neighbors have a world class airports. Remember Ang proposed a 10 billion airport to address this and all other issues at our current terminals? Second the geographic location of Manila is at a disadvantage for transfers from Europe/Middle East to Asia adding more flight time compared to well established cities like SG, KL, and HK. The location disadvantage is not that huge for North America but again Manila has to compete with cities like Tokyo, Taipei and Hongkong. The only advantage is from Australia to North Asia where Manila lies in between compared to other Southeast Asian cities.

      Not everyone will be happy with PAL's current business approach especially passengers who misses what the airline used to be. Do I want to see it this way? Absolutely, atleast it's flying and remains to be the flag carrier. I'd rather see them this way than to continue losing money that may eventually lead to closing its entire business. If this happens Cebu Pacific a budget carrier will be the country's flag carrier, oh no... Those who are not happy with PAL, chances are you are not their target customer and you are free to take any other airline that suits your travel requirement.

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    10. This is not about shooing away passengers to fly somewhere else. This is about trying to restore dignity to Philippine transport. I have said that in an upcoming article I will write about what the airport needs to look like to suit this vision of PAL. Of course even without that article most of you will figure out what they are. And they are challenging things to achieve but I am saying PAL should do its part to achieve them.

      Going back to my point about dignity in Philippine transport. Hasn't it occurred to you that everything that puts the Philippines and public transport in one sentence spells "cr@p"? This is something that I wish to fight against because other countries have carriers that they would love to brand as a national institution. Where does that leave PAL? Aren't you even thinking that it is going to be lonely on top if it gets a black bottom-line but no awards, limited positive reviews?

      I am very particular about PAL because whether we want it or not, it is our flag carrier. We can let CebuPac, AirAsia Zest et al get away with their cost-cutting strategies because they are not in a position to carry the flag or represent the country. PAL has the history. We have a job to push the carrier to raise its game because for those over the fence about going to the Philippines or finding an impression about Philippine public transport, PAL carries with it an enormous mandate to give both of them a positive impression.

      Making money is important but it must also not undermine its inherent responsibility to speak about the Philippines through the services it offers.

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    11. Plus what does it speak of the flag carrier to the public if you've gotten your profits yet have "pwede na yan" service? One of the things negatively associated with the Philippines is a sense of 'pwede na yan'. It's like tantamount to saying, 'ok no chairs on board (if allowed by safety regulations), as long as we make money, pwede na yan'.

      I'm sorry, but when it comes to public transport, which I still need to find something positive to speak about the Philippines, hindi pwede ang 'pwede na yan'.

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    12. PAL used to have a dynamic Market Research team and the staff recruited the best brains from UP Statistics Centre. They used to pay a visit to us to learn the heart beat of the market. They were very smart kids in their PAL uniform and they had all information about PAL in their hands. They talked with confidence to CEO's and they told me that they travel overseas too and talk to corporate accounts. My company had fun talking with them because they were surely are a bunch of brainy, witty kids.
      That was in the past. The last time I talked with a PAL staff they said that the unit was disestablished and those staff have now migrated overseas and are doing extremely well outside of PAL.

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  9. It seems that PAL's mantra is "we are living in the modern tech age - ipads, high end phones, handheld game consoles etc, so bring your own entertainment system and we will slash a percentage of the price". Most of PAL's routes are short to medium haul (which will require less entertainment system), so I guess they concentrate on that.

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  10. Meanwhile, its ranking dropped from 90th to 97th? Indeed, it's not about quality, it just all about profits for the greedy owner of this mediocre airline. Now we know what their attitude is: Let the passengers suffer but we'll get richer!

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    1. Hahahaa... That's ok. They're not gonna get richer... They're gonna get bankcrupt soon... lol

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    2. Correct. LCC is only sustainable in the short term. I hope PAL read white papers on LCC. But surely they didn't.

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  11. Amazing spot on article by Hybridace. Kudos! It is pretty obvious that Hybridace thinks and strategizes on a global level. Hopefully the inept local thinking PAL executives would read this article and glean some important lessons! Superb article.

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  12. Sana magstart ng full service airline ang Cebu Pacific. Sana gawin nilang full service ang international long haul nila.

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  13. I recall a prior Part I article by Hybridace commenting on the mediocre or at worst Ghetto PAL marketing!
    Have you seen their branding and marketing? It's all cheap graphics and PowerPoints!!! Cant they even afford to hire a global PR/Branding company so they can create the superb branding of Garuda, Fiji Airways, SriLankan, etc.
    Their PowerPoint ads really reeks of CHEAPNESS and GHETTO! You really think you could attract Premium passengers with PAL's shoddy marketing? At the very least, they would be so turned-off by it. Even Bus companies and LCC have better marketing and branding! THEY SHOULD FIRE THEIR MARKETING HEAD! A disgrace!

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    1. That's ok. They do not have anything to market anyway. All they have is substandard product that does not need marketing.

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  14. WHY is it that of ALL ASIAN carriers, PAL has the WORST flight attendants with the BIGGEST ATTITUDES particularly against their own Filipino countrymen! They SHOULD RETRAIN all their FAs, and FAs should be secretly filmed and videos posted when they have this disserving attitude to the passengers especially OFWs and expose them to the public! Then give them warnings, then fire them if it recurs again. PAL management should really take note! ALL OTHER ASIAN carriers' FAs are well mannered, gracious and sincerely kind to the passengers (am talking Asian and not Caucasian) which I never see with PAL. Install a secret camera in your flights to the Middle East and take note how the Purser and FAs behave. Am sure you will not be surprised, but you havent done anything about it. A disgraceful airline! The Filipinos are one of the nicest people in the world and they have the worst FAs in Asia! Score of 97 is evidence of this.

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    1. Add to that, they have the worst uniform! Fashion of the 1990s. Jesus Christ. Cant they hire a designer at least. Look at Garuda!

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    2. If anyone has any stories of mistreatment by Philippine Airlines Flight Attendants or Crew, we would be very happy to post the story on Philippine Flight Network. Be sure to get the name of the employee, date, and flight. The internet is a powerful tool that has had bad employees disciplined before. E-mail info@philippineflightnetwork.com

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    3. Before, PAL's uniform was designed by Balenciaga.

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  15. PAL should stop acting like a DIVA who is feeling entitled to public patronage yet throws a lot of attitude around. Not good. PAL wake-up. Begin to realize that you are just a drop in bucketfull of other airlines. If there is anyone in PAL who can say "if you don't like us then don't fly us" I pray for the good of PAL that management get rid of each one of you ASAP. PAL cant afford a working attitude like that with its shitty service.

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  16. Clueless. Management is clueless.

    1. Marketing
    2. Branding
    3. Hospitality/Service

    The excuse that management has to solely focus on turning a profit before anything else is completely counterintuitive.

    Business 101: What happens when you costs without creating more revenue at the same time?
    -Think about it.

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    1. Great diligent scorecard there.

      May I kindly suggest for Ramon Ang to enroll in an English evening language class in Manila -> Recall: CNN interview! Mommy Dionysia speaks way off better English than him.
      I was so cringing when I heard him speak English in that CNN interview.

      How can you have an uneducated driver be the CEO of an airline company? Not even a Wharton, Harvard, INSEAD, business education? Mon dieu :(

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    2. Precisely. PAL has cut so many costs now without making any investments necessary to increase revenue or loyalty long-term. Focusing solely on the Filipino market is a highly volatile proposition. All it takes is one bad President to send this country crashing down and 2016 is not far away. People criticize Tan that PAL spent much of its time under him in the red. But let us remember that Tan had to endure two very corrupt Presidents that did little to improve the national economy and spending power of the nation. Furthermore, he was hit by the Asian Financial Crisis. It just goes to show how volatile the market is here. Don't put all of your eggs in one basket.

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    3. Lucio Tan had 8 years to run PAL but look where SMC picked up PAL. At the bottom of the heap. To make a fair assessment of SMC, give them an equal number of years to show their wares.

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    4. I watched the Ramon Ang interview on CNN. It was embarrassing. Reading from a teleprompter, broken English... come on!

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    5. Can we hear Lucio Tan speak in an interview with CNN now that afterall, he is still the Chairman of PAL? It will be interesting to listen to Lucio's vision/mission for PALs long term strategy.

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    6. I don't think his so called "broken English" makes him unqualified to run an airline. He has a very good reputation in running largest companies in the country such as San Miguel and Petron which are all very profitable. He has a very high interest in aviation given that he is a license pilot himself.

      Lucio Tan has started owning PAL since 1992 and took management control since 1995. Where did he lead the company to? In fairness to Mr Ang I think he's doing a good job from the business point of view. Removing IFE is bad news but at least he replace it with In-Air wifi so any laptops, tablets and smartphone can access to their entertainment offering and internet. This is going to be a trend for some airline, United has started this. PAL is a 3 start airline so we cannot compare it to 5 stars like Qatar etc, and does not have any plan to do so. Ang's task is to make PAL profitable like any other business.

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    7. Just because he us a licensed pilot does not mean he's qualified to run PAL. By the way, he's a private pilot license holder, flying little cessna planes. That's like a hobby. And you equate that to someone who should be capable of running a country's flag carrier? Bwahahahahahaaaaaa!

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    8. Hahaha that's like saying people who know how to ride bikes should run transportation companies, or people who know how to paddle canoes should run shipping companies!

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    9. i think it is wrong for Mr. Ang to have no aspiration to elevate PAL out of 3-star rank. How is PAL differentiated from Cebu Pacific when both will remain 3-star rank. If that is the mindset, PAL fares should really go down to reflect reality.

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    10. This article and majority of all the comments here are one sided approach, which is the passenger's point of view. I don't blame you because none of us here owns a stake in PAL, we are all passengers and that is fine. However running an airline is like any other business, the ultimate goal is to make profit. An airline can provide all amenities to passengers such as IFE but that doesn't translate to profit, losing instead of making money will result to bankruptcy especially when no investor is interested in the business. Ramon Ang exactly knows this and that is why he has to balance the way he run the airline.

      PAL doesn't consider Cathay, Thai, SQ and other legacy airline as its main competition. It is more concern of Cebu Pacific because it has eaten up all its domestic network and this might repeat in the international market. This is not new when we talk about Malaysia Airlines against Air Asia, not to mentioned Aer Lingus even transition itself to a LCC just to compete with Ryanair. What did RSA do? He withdraw PAL from this network because its losing money and position PALEx to compete while focusing on international operation. This and other approach has lower the expenses while increasing revenue. True, it is back in black posting P1.5 billion net income in Q2 from a P1.1 billion loss last year. Total revenues in the first half grew 164 percent to P49 billion from last year’s P18.5 billion. This is exactly what RSA has been talking about since he started taking over PAL in 2012 which is making the airline profitable in less than 2 years. There is more brighter prospect for PAL as investor's confidence has significantly increased. Majority of them prefers San Miguel to manage PAL instead of Lucio Tan.

      http://www.abs-cbnnews.com/business/08/15/14/pal-holdings-returns-profit-q2

      Who knows how to run an airline now? I bet Ramon Ang is best position for this role.

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    11. Ang has had PAL in the red under his leadership for much longer than he has had it in the black. Earning one quarter of profit is no more impressive than regaining Category 1 status. Naturally, if you slash costs and reduce standards across the entire carrier but continue charging the same fares, eventually you will earn a profit. However, what would be impressive is if PAL continues to post profits under this present model. Cebu Pacific has already proven that LCC's can be profitable in the Philippines.

      If that is the direction PR wishes to move in, that's fine. But the majority of people here are questioning why they must choose a LCC model rather than that of a legacy carrier. Providing amenities such as IFE to passengers doesn't make a profit? I think Cathay Pacific would disagree with that.

      If Ang is indeed so clever and he has the right vision and business model, why is PAL struggling to find an investor? Since Ang is terrible at keeping his mouth shut, most people have known for quite some time that PAL was due to post a profit and yet, there are still no investors coming forward. Therefore, has investor confidence improved? It won't until PAL decides whether it is a LCC or a full-service carrier.

      Ultimately, if you believe that passengers will continue to pay PAL prices for Cebu Pacific services, you are indeed mistaken. PAL will lose to Cebu Pacific its international market share if it doesn't begin to offer its passengers a better value proposition. If PAL wants to compete with Cebu Pacific and steal back market share, then they should form a low-cost carrier again. But PAL is not a low-cost carrier, or is it trying to become one? PAL could grow its market and become less reliant on the LCC driven market in the Philippines if it tried to be more like CX/SQ. Indeed, there is no need for a CX calibre carrier operating domestic routes, but internationally, I beg to differ. Indeed, Malaysia Airlines has lost much to Air Asia but they have still remained true to their integrity and standards.

      The existing PAL model is not sustainable and since you brought up Aer Lingus, here is what they note on their very own website: "Aer Lingus has positioned itself as a 'value carrier' on the basis that the pure low cost and low fares model is not sustainable while a full service model would not be viable in serving our key markets. The fundamental elements of this revised strategic approach included better matching of capacity to demand (involving reduction of long-haul capacity and reductions in capacity on over-served short-haul routes), a renewed focus on generating revenue per seat rather than simple maximisation of load factor as well as more emphasis on partnerships and connectivity to deliver on our primary mission of connecting Ireland with the world."

      Just make up your mind, PAL!

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    12. If you don't run a business from the passenger's point of view, then you won't be left with any passengers. The Golden Rule in Hospitality: If you don't take care of the guest, someone else will. Lucky for PAL, it enjoys the security of a protectionist government.

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    13. So if Aer Lingus apparently transitioned to a LCC, why is it that they are still able to offer AVOD on their wide-body aircraft but PAL can't? Aer Lingus may actually have a suitable model for PAL but as indicated in the post above, they went to a value-based model, not LCC. That is the point of this article, PAL has become too much like Cebu Pacific. They don't need to be CX or SIA. Just restore the standards that were established with the B777 fleet.

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    14. I totally agree with the above comment. PAL needs to be consistent on its long haul international segment. If only it has made an effort to make all its planes serving international long haul to be just like the B777, then maybe it stands a chance against other full service airlines.

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  17. What happened to PAL is typical of what happens when a huge corporation takes over a company. The new owner fires people loyal to the former owner, gets rid of important suppliers and operates on the cheap. In short, the takeover eliminates the real soul of the company that had been taken over. It becomes a shadow of its former self, and it's all in the name of profits for the mother company, which in this case is SMC, not PAL. SMC is now selling back its stake in PAL at twice the price it had paid for. This amounts to a cool P500 million profit.It's not about Ang or SMC wanting to revive an airline, it's all about SMC making tons of money at the expense of PAL.

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    Replies
    1. You've forgotten that PAL is a privately own company. It is not receiving any subsidy from the government compared to other legacy carriers like Emirates, Qatar, Malaysia, Singapore, Thai etc which are all own or partly own by the state. If PAL continue to loose money, it will fall into bankruptcy and the legacy of Asia's first airline is all but history.

      SMC has poured millions of dollars into PAL for its refleeting program on top of the money it paid to gain 49% ownership. Now that Tan wants to take back control of the airline, SMC has all the right to name its price because of their hardwork the airline is now back in black.

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  18. Lets face it, even if PALs CEO happened to be Lucio's best English speaking daughter or son, it will bring PAL nowhere if Lucio Tan's children do not understand how to run a legacy airline. Sadly enough, that seems to be the case too.

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  19. PAL needs to join an alliance to be competitive in the global market. Sadly, without that, I don't think it has the tools to compete. Mabuhay Miles alone is not enough. Passengers now, especially the high-yielding ones, prefer to fly an alliance carrier than a stand-alone carrier. In the US, the only market PAL has are the Filipinos. Unfortunately, Manila is not a good transit point for North Asian countries like China so it really does not have a chance attracting anyone else beyond the Filipino. At best, it can compete in the Vietnamese market but really, PAL can only service S.E. Asia destinations such as Bangkok, Ho Chi Minh City, Singapore and maybe Hong Kong and Taipei (2 hours north). North Asia, forget it. No one will want to fly to S.E. Asia to get to China. It's a waste of time. So really, my suggestion to PAL, if you want to compete, get into an alliance, put out good fares, great Filipino hospitality/service and concentrate on feasible markets.

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    Replies
    1. They can't join an alliance unless they're invited. No alliance in their right mind would want to invite PAL to join their exclusive club.

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  20. Quite simply PAL'S product is not good enough for international passengers = outdated planes with no Ife
    OFW'S can get a better service looking elsewhere also

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  21. PAL's two owners think they're running a cigarette factory or brewery, using their old business practices and methods that won't do an airline any good. It's just like that newspaper that holds offices in Intramuros. Its owners don't even read.

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  22. Hybridace101 for PAL PRESIDENT/CEO :)

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  23. To be honest, I travel almost every week from ILO to MNL before and would prefer all the time to book for a PAL because of the comfort and humanity! I was in totally shock coming back last summer of what had happened to the service I used reminisce the services before. They should have kept the PR and 2P apart as i see no class flying in PAL... I would even rather have 5J within PHL if they dont straighten up!

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  24. if i can travel long haul, i will ride PAL, because its direct. no stopover, no risk of missing the connecting flight if the first flight gets delayed. lesser risk of missing baggage due to connecting flights.

    I hope PAL will install PAL "IN Air" on all its long haul flights especially in a340 flights.

    I hope PAL will also install charging stations at the back of the plane just like in 7-11 where we can charge our laptops, ipads, cell phone if we ran out of battery on our own tablets - during the long haul flight.

    PAL can sell books and magazines also on long haul flight because we dont want to look to long on our tablets or even the IFE...because long exposure on those may not be good in my eyes.

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  25. if i will fly long haul, i will bring a book to read (can last 15 hours x 2 roundtrip)....i cannot expose my eyes too long in the IFE.... or the Ipad.

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    Replies
    1. I like watching movies and TV shows on a 16 hour flight. And Iike the luxury of walking into a plane with personal IFEs. Makes me think that I'm travelling with a true full service airline and that what I paid for is actually all worth it.

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  26. PR and 5J are both for "Filipino only" airlines because we do not have the infrastructure to attract high volume tourism or big business. We have bad airports, roads, internet, traffic, and so on. All our neighbors have 2x to 10x more tourists than the PH. Cebu has 1x Shangri La, Phuket and Bali must have 20x hotels of that level. It's no wonder that we are not world standard and such our airlines are not either.

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    Replies
    1. That's why I'm arguing PAL will have to take its business elsewhere. If the Philippines itself is not attractive, then we should look at other profit avenues, not just the Philippines or Filipinos. Certainly we need to work on the airport, which is by no means a walk in the park.

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  27. Ramon Ang is a corrupted businessman. His "good strategy" made Philippine Airlines (PAL) one of the worst airlines. Ramon Ang management PAL is worse than PAL being blacklisted by European Union and being in Category 2 status from FAA.

    Here are Ramon Ang's mismanagement strategies:

    1. New aircraft bizarre configuration - Ramon Ang configured economy class of new Airbus A330-300 into 9-abreast seating (3-3-3). Plus, lack of in-flight entertainment system for new aircrafts.

    2. Airbus A340-300 retirement - Planned to retire ageing Airbus A340-300. Action made, leased also ageing Airbus A340-300 to other airlines.

    3. Ageing Airbus A340-300 takes longest path - PAL (under Ramon Ang) used to use longer path to London (commonly via Vietnam-Thailand-India-Middle East-Turkey-Romania-Hungary-Austria-Germany-Netherlands airspaces) using Boeing 777-300ER. But it already switched into shortest path (via China-Mongolia-Siberia-Scandinavia airspaces) using same aircraft. The stupid thing Ramon Ang did when he switched PAL's London aircraft into ageing and fuel greedy Airbus A340-300, he switched PAL's London path into longest path, making PAL burn plenty of fuel.

    4. Airphil Express rebranded as PAL Express (stylized as PAL EXpress, later PAL express) - Airphil Express rebranded as PAL Express is a bad thing. As what I thought, Philippine Airlines is an airline which handles international and some domestic flights. PAL Express is a domestic airline owned by Philippine Airlines. Airphil Express, formerly known as Air Philippines, is a low cost airline owned by Philippine Airlines. How come Ramon Ang rebranded Airphil Express into PAL Express? PAL Express is different from Airphil Express. And take note that PAL Express during its first creation is not a low cost airline.

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