Philippine Airlines Sees Clark as an Expansion Area

MANILA, Philippines – The Philippine Airlines (PAL) is eyeing Clark as its expansion area while its aims for operational growth with new routes and increased flights in the midst of 2017 hurdles.

Jaime J. Bautista, PAL President and Chief Operating Officer, sealed a memorandum of agreement with the Clark International Airport Corporation (CIAC) yesterday. The deal comprises the companies’ engagement in operating local and international flights from the Clark hub.

Bautista released a statement to the reports while in the signing ceremony at PAL’s head office in Pasay City. According to him, next year would likely be more challenging, particularly for the national airline, since 2016 marked its acquirement of seven-airplane delivery. In addition, PAL has considered more destinations. Through this step, they could maximize the usage of these aircrafts.

The PAL President stated that it remains a question whether they could get more slots in Manila or not. He accepted that the airline mostly caters market from the capital. If they would not be able to obtain sanction for the slots and the administration would not approve their re-run of their discontinued flights, they have to decrease their capacity.

This year, PAL received the delivery of two Boeing 777-300 ER and five Airbus A321. The additional planes would increment the frequencies of PAL flights as its aspires for unveiling new destinations.

Bautista added that they would compensate the similar value of fleet, but their returns will likely be reduced if they do not increase their flights. Next year will pose risks for the airline industry in the country. Due to this, PAL is seeking for new hubs, and Clark is one. The management remains optimistic that their Clark operations will be triumphant.

Specifically, Bautista explained that 2017 will cause disputes due to a probable increase in fuel values, which would pertain to increased operation costs. Moreover, Philippine peso may continue to depreciate, inflicting the revenues of the airline.

The memorandum of agreement states that CIAC will grant particular ground service and logistics support to PAL, guaranteeing the flights’ smooth operations. Alternatively, the flag carrier would be turning over flights at CIAC by tranches.

On December 16, the first phase will open flights between Caticlan and Clark. The second phase will commence in next year’s first three months, which will involve routes between Clark and Incheon, South Korea; Clark and Cebu; and Davao and Cagayan.

Besides Clark, PAL is anticipated to put up hubs in Cebu, and Davao could follow suit.

About the Author
The Stock Signals Philippines is the online news media arm of Equilyst Analytics. Inc., an SEC-registered stock market consultancy firm in the Philippines that guides Filipinos on long-term investing and short-term trading and offers mentoring services.

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