Showing posts with label Etihad Airways. Show all posts
Showing posts with label Etihad Airways. Show all posts

Sunday, December 4, 2016

Philippine Airlines and Etihad Ending Partnership?

The Centre for Aviation (CAPA) is suggesting that Philippine Airlines and Etihad might soon consider ending their partnership.  The Manila-based carrier has been reported to not have benefitted significantly from its partnership with its Abu Dhabi-based counterpart.  

Copyright photo: Angelo Agcamaran/PPSG

Currently, both carriers have a codeshare agreement.  Etihad has its own flight numbers on domestic flights operated by Philippine Airlines, while Philippine Airlines also has a flight number on Etihad flights between Manila and Abu Dhabi.  

This suggestion comes as Philippine Airlines is considering a reduced presence in the Middle East in order to focus on expanding in other regions of the world .  Philippine Airlines reestablished its presence in the Middle East in 2013 amidst an ambitious expansion plan rolled out under the ownership of San Miguel Corporation.  In addition to Abu Dhabi, it has served cities such as Dubai, Riyadh, Doha, Dammam, and Jeddah.  In that same period, the flag carrier also received new Airbus A330s, including a high-density version with only regular or premium economy class seats.  This version was mostly utilised in the Middle East.  

A loss of a codeshare agreement with Etihad may also provide renewed opportunities for other Middle Eastern carriers to resume codeshare agreements with Philippine Airlines.  Previously, Emirates, Qatar Airways, and Gulf Air had codeshare agreements with Philippine Airlines.

CAPA specifically reports that Philippine Airlines is specifically considering new flights in the United States and Europe, which will be priority regions once the Airbus A350 joins the carrier's fleet in 2018.  CAPA is also expanding into Australia by making its Manila-Brisbane flights completely nonstop, as well as into Chengdu, China.  This is as the flag carrier improved its profitability in spite of its rapid expansion.  Such a feat was one of the basis for Philippine Airlines winning the CAPA Asia Pacific 2016 Airline Turnaround of the Year Award. 

In addition to Etihad, Philippine Airlines has existing codeshare agreements with Air Macau, All Nippon Airways, Cathay Pacific, China Airlines, Garuda Indonesia, Gulf Air, Hawaiian Airlines, Malaysia Airlines, Turkish Airlines, Vietnam Airlines, WestJet, and Xiamen Air.

Sources: CAPA, Business World , Inquirer

Sunday, August 30, 2015

Analysis: UAE Air Talks Yield Positive Results for Both Countries

The Philippine air panel ignored the pleas of the national carriers as they met with their counterparts to renegotiate and expand the existing air agreement between the Philippines and the United Arab Emirates. While both Cebu Pacific and Philippine Airlines opposed the renegotiation, the outcome is viewed as fair to both sides.

emirates clark
Copyright Photo: Angelo Agcamaran/PPSG
The new agreement increased the maximum flights per week between the two countries from twenty-eight to thirty-five. Although it remains unconfirmed which UAE carrier will utilize the seven additional entitlements, it is widely believed that Emirates will use them to relaunch its third daily flight between Manila and Dubai. 

Both Philippine Airlines and Cebu Pacific opposed any increase to the previous number of flight entitlements, citing that it would hurt local airlines, who are presently unable to maximise their existing number of entitlements. In addition, Philippine carriers accused the Gulf carriers of competing unfairly, claiming that they receive huge subsidies from their respective governments.

According to the Centre for Asia Pacific Aviation, the United Arab Emirates is presently the largest destination in the Middle East from the Philippines. More than half of the 80,000 weekly return seats from the Philippines to the Middle East are routed to the United Arab Emirates. In its report on the Philippines-Middle East market, CAPA stated that the "best scenario for Emirates and Filipino consumers would be an expansion of the UAE-Philippines bilateral."

Philippine Airlines recently argued that there was insufficient demand between the Philippines and the UAE to warrant additional flights. According to Jaime Bautista, President of Philippine Airlines, the national flag carrier has the data to prove that the majority of passengers on board Etihad and Emirates are bound for destinations outside of the UAE. 

"The figures that we got is that Emirates carries less than 30% of passengers who stay in the UAE," said Bautista. "So around 70% of its passengers are those that fly beyond Dubai. The other carrier, Etihad, is carrying passengers in the same percentage. Going by those figures, it shows that PAL and Cebu Pacific are actually carrying more passengers between the two countries so that's why we think there is an overcapacity in the market."

Bautista may indeed be correct in his assertions. However, the Philippine government has an interest in growing traffic from points beyond the Middle East to not only serve overseas Filipinos, but to attract more foreign tourists as well. Unfortunately, Philippine Airlines and Cebu Pacific do not have the aircraft or the demand to launch additional non-stop flights to Europe. Moreover, European carriers have expressed little interest in offering additional non-stop service to the Philippines, which leaves the Gulf carriers as the only carriers able to meet the growing demand and continue developing the market at the present time.

Developing New Gateways to Decrease Congestion in Manila

The new agreement successfully addresses many of the concerns presented by Philippine carriers and helps to level the playing field in spite of whatever subsidies may exist for Gulf carriers. The Philippine Civil Aeronautics Board attached a condition that whichever UAE carrier picks up the additional seven flight entitlements, must launch separate service within one year from the UAE to either Cebu or Clark Airport. 

Although pioneering a new route may seem like a huge risk, it may work out favourably at Mactan Cebu International Airport, which is rapidly growing as a domestic hub. Even Philippine Airlines is planning to launch non-stop service from the airport to Los Angeles. Emirates previously attempted non-stop service to Clark International Airport, which was withdrawn within a year after launch due to weak demand. 

While there may be insufficient origin and destination traffic between Cebu and the UAE, Emirates or Etihad may be able to leverage connecting traffic to and from popular destinations in the Visayas, Palawan, Boracay, and Mindanao just as it has in Manila and connect these passengers to their global network that extends throughout the Middle East, Europe, and Africa. Many Filipinos in those regions would appreciate the opportunity to bypass Manila. If a UAE carrier fails to begin service to Cebu or Clark within a year of signing the agreement, they will lose the additional rights to operate to Manila.

Philippine Carriers Can Now Leverage Connection Opportunities

As Philippine Airlines indicated previously, much of the demand and success of the UAE carriers can be attributed to connecting traffic, which is heading to destinations beyond Dubai or Abu Dhabi. With the absence of code-share agreements with partner airlines, neither Philippine carrier was able to capture this traffic as their services terminate in the UAE.

However, the recent negotiations will now empower the Philippine carriers to tap into this market and serve other destinations beyond the UAE without the need for code-shares as they have been granted fifth freedom rights to Europe, the United Kingdom, United States, and Saudi Arabia. This enables either Cebu Pacific or Philippine Airlines to fly to the UAE, pick up passengers and continue onto a destination in any of those countries.

According to Carmelo Arcilla, Executive Director of the Civil Aeronautics Board, the fifth-freedom rights will help to level the competitive playing field between carriers of both nations. "This will improve Philippine connectivity and also the commercial viability of our routes to the UAE," said Arcilla.

Moreover, both countries also agreed to co-terminalization, which will enable a Philippine carrier to fly to Dubai and then onto Abu Dhabi without picking up passengers for the domestic leg. This will increase the viability of the existing flights of Philippine carriers to the UAE as they can now carry passengers bound for both Abu Dhabi or Dubai on the same flight and aircraft. Co-terminalization will apply to all cities in the United Arab Emirates and the Philippines. In the case of Emirates, the carrier could launch new flights from Dubai to Cebu and continue on to Davao. 

"This also improves connectivity and viability," added Arcilla. "Overall, the talks are a success for Philippine connectivity and network development. The Philippine government panel and our airlines view the exchange as more or less fair, as the increase in traffic rights for both sides, which our airlines opposed, is minimal."

Philippine Airlines Must Act to Improve Prospects

Philippine Airlines seems to be in the weakest position in the Philippines-UAE market. If the national carrier wishes to boost its load factor, it must leverage its current partnership with Abu Dhabi based Etihad and utilize the newly negotiated fifth freedom rights to expand flights to Saudi Arabia, the United States, or Europe.

According to the Centre for Asia Pacific Aviation, Philippine Airlines could begin utilising the seven unused rights from the previous set of entitlements to launch a second daily flight to Abu Dhabi to better leverage its partnership with Etihad. It could expand its code-sharing relationship with Etihad to cover destinations in the United States and Europe. At present, the code-share relationship only covers flights between Abu Dhabi and Manila, as well as domestic services within the Philippines. 

Manila is presently the second largest international market for Etihad after Bangkok. Any increase of Etihad's share of the Philippine market would come at the expense of Emirates. If Philippine Airlines does not wish to launch any further non-stop services to Europe, Abu Dhabi could serve as a transit point, where Philippine Airlines passengers could connect to Etihad and Etihad partner carriers to reach other destinations in Europe. 

Philippine Airlines currently does not have codeshare partners in Europe. However, the flag carrier is currently pursuing new partnerships with European and US based carriers. Etihad is an ideal partner as they have an extensive network in Europe and several stakes in European carriers that could partner with Philippine Airlines. 

In addition, Etihad could be used to serve additional destinations in the eastern United States. This would improve the position of Philippine Airlines in both the European and North American market. However, PAL must act quickly before Emirates gains further share. Moreover, it must improve its on-board product, loyalty programs, and alliances to enhance competitiveness.

Wednesday, June 10, 2015

Etihad Wants to Increase Code-Share Destinations with Philippine Airlines

Etihad Airways recently inked a deal to strengthen its code-share relationship with Air France-KLM Group and now the Abu Dhabi based carrier is looking to expand its code-share network further through its existing relationship with Philippine Airlines.

etihad manila
Copyright Photo: Angelo Agcamaran/PPSG
Last week, Etihad CEO James Hogan said on the sidelines of the International Air Transportation Association's annual meeting that Etihad would share codes on more flights with Air France-KLM beginning this year.

Etihad is currently looking to add new destinations as part of its strategy to expand through airline partnerships. Last year, Philippine Airlines and Etihad launched a landmark agreement that included code-sharing, which Etihad now hopes to leverage further to add even more destinations.

As part of the agreement launched last year, Philippine Airlines and Etihad agreed to co-operate in a number of areas from code-share flights to loyalty programs, and airport lounges. Each carrier plans to code-share on both cargo and passenger flights.

Currently, Etihad and Philippine Airlines code-share on the nineteen weekly flights between Manila and Abu Dhabi. By the end of last year, Etihad was expected to codeshare with Philippine Airlines on twenty destinations throughout the Philippines. That number is expected to rise to 28 in 2015. However, it remains unclear what new destinations Etihad is planning to launch through its code-share arrangement with Philippine Airlines.

When the deal was initially signed in July 2014, Hogan noted that the relationship with Philippine Airlines would bring tremendous benefits to passengers of both carriers. "From a greater choice of passenger and freight codeshare destinations, to reciprocal loyalty program benefits, and more efficient terminal operations – this is a truly customer-centric proposition,” said Hogan.

Thursday, August 14, 2014

Etihad Not in Talks with Philippine Airlines

Etihad Airways reported last week that is not currently in discussions with Philippine Airlines over a possible equity stake in the Philippine flag carrier. Both Lucio Tan and Ramon Ang had previously expressed on behalf of Philippine Airlines a desire to take on a foreign carrier as a strategic equity partner.

etihad manila philippines
Copyright Photo: Angelo Agcamaran/PPSG
But according to James Hogan, President and CEO of Etihad Airways, the carrier currently has no plans of investing in Philippine Airlines. "We're not having any talks with Philippine Airlines," said Hogan at a press conference where Etihad announced a €560 million investment in European carrier, Alitalia. He added that, "If it integrates with our network, has minimal overlap, and we believe we can see synergies, we'll consider it."
Although Philippine Airlines continues to seek an equity investor as it attempts to turn the airline around, the national flag carrier presently has its own internal battle for ownership to resolve as Lucio Tan and Ramon Ang of San Miguel Corporation battle for complete control of the carrier. While an outcome is expected by the end of this month, it is unlikely that any new partnerships with foreign carriers will be revealed until this issue is resolved.
Earlier this year, Etihad Airways and Philippine Airlines signed a strategic partnership that would involve both carriers collaborating in a number of areas including sales and marketing, cargo, frequent flyer programs, passenger lounges, airport operations, and codeshare flights among other initiatives.

"What is particularly significant about the new commercial arrangements is that our millions of customers are the winners," said Hogan. "From a greater choice of passenger and freight codeshare destinations, to reciprocal loyalty program benefits, and more efficient terminal operations -- this is a truly customer-centric proposition."

Given the nature of existing collaboration between Philippine Airlines and Etihad Airways, it would seem that there are sufficient synergies between the two carriers to make PAL an ideal fit for an Etihad investment. If Philippine Airlines wants to expand its presence in Europe, it would be much more practical to codeshare with Etihad rather than attempt to fly its own metal. But whether this partnership will develop further remains to be seen, at least, not until the ownership dispute between San Miguel and Tan are resolved.

Etihad Airways currently operates two daily flights between Manila and Abu Dhabi using a 412-seat Boeing 777-300 aircraft, while Philippine Airlines flies from Manila to Abu Dhabi five times weekly using a 368-seat Airbus A330-300.

Thursday, July 10, 2014

Philippine Airlines and Etihad Airways Sign Strategic Partnership

Philippine Airlines and Etihad Airways have enhanced the level of cooperation between the two carriers with the signing of a landmark strategic partnership on July 9. The new comprehensive partnership agreement expands the working relationship of the two airlines following the memorandum of understanding that was signed earlier this year in April.

Image Source: Philippine Airlines / Facebook
The strategic partnership will cover loyalty programs, airport lounges, codeshare flights, sales and marketing programs, cargo operations, a Philippine domestic air pass, and coordination of airport operations in Manila and Abu Dhabi, the primary hubs of each carrier.

According to James Hogan, President & CEO of Etihad Airways, the broader scope of this new commercial agreement is a reflection of the strength of the relationship between the two carriers and two nations.

"This new partnership builds on the success of our original codeshare agreement and reflects the mutual respect, trust and goodwill that have built up over time -- not only between the airlines but also between our governments," said Hogan. "What is particularly significant about the new commercial arrangements is that our millions of customers are the winners. From a greater choice of passenger and freight codeshare destinations, to reciprocal loyalty program benefits, and more efficient terminal operations -- this is a truly customer-centric proposition."

Image Source: Philippine Airlines / Facebook

In the early stages of the strategic alliance, both carriers will place their flight codes, 'PR' and 'EY' on each other's flights between Manila and Abu Dhabi for a combined total of 19 weekly flights between the two capitals. Etihad will also be codesharing on a number of Philippine Airlines domestic flights to 20 destinations throughout the Philippines during the initial phase, followed by an additional 8 later on for a total of 28 codeshare destinations in the Philippines.

Image Source: Philippine Airlines / Facebook
Philippine Airlines President Ramon Ang reported earlier this week that a major foreign carrier is poised to announce a stake in the flag carrier but declined to comment whether it was Etihad Airways. "This new agreement is one of the ways by which PAL hopes to further build its global network," said Ang. "By harmonising our products, we get to offer our passengers much wider and better travel options all over the world while boosting economic activity for both our countries through trade and tourism."

Frequent flyer members of the Etihad Guest program and the Mabuhay Miles program will also now enjoy reciprocal benefits including earning miles and redeeming on both carriers. In addition, frequent flyers of both carriers will enjoy priority check-in and boarding, lounge access across both networks, and baggage handling privileges.

Image Source: Philippine Airlines / Facebook

Etihad's premium lounges in Abu Dhabi and London's Heathrow Airport will now also be available to Business Class passengers travelling on Philippine Airlines and to any Mabuhay Miles Million Miler, Premier Elite, and Elite passengers travelling on PAL Manila to Abu Dhabi or Manila to London Heathrow flights. Lounge access in Abu Dhabi will come into effect on August 1, while lounge access at London Heathrow will be available from November 1.

The two carriers will also be cooperating on the cargo front with an extensive capacity agreement based on the current bellyhold of all passenger flights between Manila and Abu Dhabi, in addition to connecting airfreight to destinations in Africa, Australia, the Middle East, and Southeast Asia. Both carriers will be seeking to develop value-added cargo products across their combined networks that will enhance value to consumers including priority services.

Meanwhile, both carriers are seeking to tap into the strength of the growing Philippine tourism industry by developing a joint air pass scheme that will enable foreign visitors to purchase an international flight to Manila, plus up to three additional sectors on PAL's domestic network. The new program is expected to give the local tourism industry a significant boost while enabling more travellers to see more of the Philippines. The new air pass is expected to be available for sale on September 1.

Image Source: Philippine Airlines / Facebook
Etihad Airways presently operates two daily flights between Manila and Abu Dhabi, while Philippine Airlines operates five weekly flights between the two cities. Flights operated by Etihad use a 412-seat Boeing 777-300 aircraft, while flights operated by Philippine Airlines use a 368-seat Airbus A330-300. Although both carriers feature Business Class with full-flat beds and full-service in Economy Class, Philippine Airlines is the only carrier to offer a separate Premium Economy cabin between Manila and Abu Dhabi.

Tuesday, April 29, 2014

Philippine Airlines and Etihad Airways Ink Partnership Agreement

Philippine Airlines and Etihad Airways have announced that the two carriers have inked a new partnership agreement that represents a new era of cooperation. Under the memorandum of understanding, the two carriers will collaborate in code-sharing, frequent flyer reciprocity, airport lounge access, cargo cooperation, special pro-rate and air pass agreements. 

etihad philippine airlines agreement
Copyright Photo: Angelo Agcamaran/PPSG
The new partnership is designed to make both carriers the first choice for the 700,000 overseas Filipino workers that currently reside in the United Arab Emirates. The Filipino migrant workers account for a large majority of the annual traffic between Manila and Abu Dhabi. 

According to James Hogan, CEO of Etihad Airways, this is not the first time that the two carriers have cooperated. "Etihad Airways and Philippine Airlines have a history of successful cooperation on the Abu Dhabi to Manila route," said Hogan. "The Memorandum of Understanding symbolises our shared commitment to growing the passenger and cargo market between the UAE and Philippines and fostering closer diplomatic, trade, and cultural ties." Philippine Airlines and Etihad first entered into a commercial agreement in October 2010 when the two carriers began code-sharing on the Manila-Abu Dhabi route.

In addition to serving the population of overseas Filipino workers, both carriers would also like to increase the number of tourists to the Philippines, especially from Europe and the Middle East. "The Philippines is one of the world's best kept secrets with great appeal to travelers from overseas. We are committed to working with the Philippine Airlines team and the Philippines tourism industry to bring more overseas visitors to their country and to increase the economic benefits of tourism," said Hogan. "Closer collaboration in our home markets and in the global arena will enhance the competitiveness and appeal of our offering and deliver an unrivalled customer proposition in the UAE, in the Philippines and abroad." 

Meanwhile, Ramon Ang, President of Philippine Airlines, highlighted the expansion benefits of partnering with Etihad, a respected global carrier. "This relationship will go a long way in providing our combined customer base a much more enhanced set of travel options," said Ang. "It comes at an opportune time for PAL, which is in the thick of a fleet modernisation and expansion program that will see the flag carrier pushing further not only into the Middle East but also on other parts of the globe using a modern fleet of aircraft." 

Philippine Airlines is set to retire 20 aircraft over the course of this year. The ageing aircraft will be replaced with brand new, fuel-efficient Airbus planes, that will bring down the average age of the PAL fleet to 3.5 years. As part of the re-fleeting program, Philippine Airlines will be acquiring up to 100 new aircraft. In 2012, the carrier placed a $9.5 billion order for 65 Airbus aircraft. 

The carriers are also hoping that the new partnership will help to grow not only the passenger market but the cargo market as well. The United Arab Emirates is currently the third largest trading partner of the Philippines in the Middle East. In 2013, trade between both nations amounted to $1.4 billion. 

"Closer cooperation in the cargo arena, one of Etihad Airways' most successful divisions, has the potential for a boost to each airline's bottom line and to the economies of our two great nations," said Hogan. 

Etihad first began serving Ninoy Aquino International Airport in Manila with 4 weekly Airbus A330 flights to Abu Dhabi. The carrier now offers twice daily service between the two cities aboard a Boeing 777-300ER aircraft. In 2013, the Abu Dhabi-Manila route was the airline's second busiest route.