By Cris Larano
MANILA--Philippine Airlines Inc. expects to save around $300
million a year from its plan to use its new Boeing Co. (BA) 777
jets for long-haul routes while redeploying other aircraft to
handle shorter routes, which will increase efficiency and
profitability, the carrier's president said late Monday.
Speaking at a ceremony to mark the arrival of PAL's third 777
jet, President Ramon Ang said three more B777s will arrive in the
coming months to serve as the workhorses of the airline's planned
nonstop, long-haul service to Europe and North America.
"In the near future, PAL will fly nonstop to Toronto, Paris and
New York," Mr. Ang said. "Our growth strategy for PAL is simple:
Modernization of the fleet, expansion of the network and
improvement of passenger service."
He said PAL will also acquire other types of aircraft to serve
shorter routes, including destinations in the Middle East. He said
the redeployment of the carrier's aircraft should be completed by
October, and the gains in efficiency and profitability should be
reflected in PAL's results by the first quarter of 2013.
PAL is also looking at pursuing alliances and joint ventures
with other Asian carriers to help it increase the frequency of its
flights, particularly to countries such as the U.S., Mr. Ang
said.
PAL can't immediately increase its flights to the U.S. as the
Philippines is considered a "Category 2" country by the U.S.
Federal Aviation Administration due to its low safety standards.
Airlines from Category 2 countries are prevented from expanding
services to the U.S. and are subjected to stricter
surveillance.
PAL must improve its competitiveness so it can take advantage of
Asia's fast-growing market for air travel, Mr. Ang said.
Mr. Ang is also the president of conglomerate San Miguel Corp.
(SMC.PH), which recently acquired a substantial minority stake in
PAL by investing in a company owned by billionaire Lucio Tan, the
controlling shareholder of PAL. Mr. Ang said he hopes PAL can tap
the strength of San Miguel and Mr. Tan's group to bolster
earnings.
Listed PAL Holdings Inc. (PAL.PH) controls PAL. San Miguel
invested in Trustmark Holdings, a company owned by Tan that
controls PAL Holdings.
Write to Cris Larano at cris.larano@dowjones.com
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