Philippine Airlines Expands in London Amidst Brexit

National flag carrier Philippine Airlines has pushed ahead with its expansion plans at London's Heathrow Airport, increasing its non-stop services from four weekly flights to daily flights in spite of the outcome of the recent Brexit vote, which is expected to impact the carrier negatively.
philippine airlines london
Copyright Photo: Angelo Agcamaran/PPSG
According to PAL President Jaime Bautista, the decision to increase the service to daily flights was driven by the need to improve the carrier's product to enhance competitiveness against other carriers.

“The reason for adding flights, actually, we are not making money in London yet. But for us to be able to compete with the other carriers, we have to improve our product," said Bautista. "The four times a week is not really a good product."

Philippine Airlines currently holds less than 30% market share of the traffic flying between London and Manila. Bautista remains optimistic that offering daily flights will entice passengers currently flying with other carriers to use Philippine Airlines instead.
Meanwhile, the devaluation of the British pound after the United Kingdom voted to leave the European Union is expected to decrease the carrier's revenues on flights to London this year. Philippine Airlines estimates a loss of $4 million in revenues as a result of the currency fluctuation.
"An eight percent devaluation of the British pound sterling would mean an eight percent reduction in our revenue in London because we are expecting to generate around $50 million from our UK operations this year," said Bautista. "With an eight percent devaluation, it's more or less a $4 million reduction in revenue for our London operations."
Uncertainty in the United Kingdom led to the drop of the British pound as British nationals are forecasted to reconsider travelling overseas as a result of a weaker currency and less purchasing power. However, the drop in currency may encourage more Filipinos to travel to the United Kingdom as Britain becomes more affordable.
Bautista added that it is too early to tell whether the on-going effects of Brexit would influence the national flag carrier's expansion plans in Europe. Philippine Airlines is still studying the possibility of launching non-stop flights to Amsterdam, Hamburg, Rome, and Paris as it accepts delivery of Airbus A350 aircraft in 2018. Bautista remains optimistic that the situation will stabilise. "I think this will normalize," Bautista added.
In spite of losses expected on its only European route, Philippine Airlines expects to continue its profitability in 2016 after seeing impressive performance on new flights launched this year. In 2016, Philippine Airlines launched new service to Jeddah, Kuwait, Doha, Saipan, and new non-stop service from Los Angeles to Cebu. Most recently, the carrier launched new flights between Manila, Taipei, and Osaka. 
Philippine Airlines recently reported a net income of $132.73 million in 2015, which is 35 times higher than the $3.80 million achieved in 2014.
References: Philippine Star

8 comments:

  1. The reason why Philippine Airlines is struggling with the UK market of flights is because when it introduced its service to London it advertised the 777 aircraft. This was soon scrapped and replaced with the A340. The A340 has no in flight entertainment. Yes they provide Ipads but its not the same as it's competitors. Nearly 95% of all Asian airlines serving Heathrow land in the morning. The reason is so that passengers can meet connecting flights to the rest of Europe and beyond. Philippine Airlines chose to ignore their customers so that flights arriving in London would arrive in the evening. Philippine Airlines stated the reason for the evening flights was to meet connections from Australia. Maybe its just me but I have never heard of passengers shoosing to go via Manila when Singapore Airlines, Quantas and Emirates offer superior connections and a wide selection of landing times at London at around the same cost of a return ticket with Philippine Airlines.

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    Replies
    1. Clearly you are not part of PAL's customer base for direct non-stop flights. PAL can manage to fly London without you. Better take other carriers if you prefer such luxuries.

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    2. I agree with Anon 9:36am. Very objective unlike the baseless accusation of Anon 1:55am. It's not luxury dude. It's basic nowadays and necessity for travelers. PAL is so mediocre, if not poor overall compared other Asian carriers.

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    3. 'Anon 1:55am' is the typical over patriotic Pinoy who thinks everything about the Philippines is the best.

      I flew with PAL LDN-MNL last year and never again. The aircraft was so old, the chairs still had ashtrays, no IFE, huge CRT in the middle that comes down, so you hear this loud buzzing noise all the time.

      I just don't understand what they were thinking. PAL flights from LDN to MNL costs more than better rivals such as Singapore, Malaysia, Cathay and sometimes even Emirates. Typical 'It's not what you know, it's who you know' business structure.

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    4. Oh I failed to add about the overhead storage. Well I had one, but I couldn't use it because the cabin crew uses them to store toilet papers, newspapers and cups.

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  2. Let's wait for Airbus A350-900XWB of Philippine Airlines.

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  3. @Anon 1:55am:

    Hopefully you're not part of PAL's workforce nor Philippine aviation's workforce as a whole. Because it's the mentality like yours that's leeching and holding back the growth of the Philippines in this industry.

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