BEFORE legacy carrier Philippine Airlines (PAL) expands its operations in Europe, two requirements must be met: one, a high passenger demand; and two, a level playing field on competition with Gulf carriers.
The company’s president, Jaime J. Bautista, clarified that the airline has not totally abandoned the prospect of expanding its operations to other European destinations under the 28-member bloc’s territory. It is just a matter of proper timing and sound regulatory policies.
Regulations and demand, he said, are intertwined. It is, in fact, evident in today’s local aviation industry—at least on the European and Middle Eastern fronts.
Gulf carriers, Bautista said, are threats to PAL’s business, as these companies offer lower fares owing to government subsidies. Currently, some Gulf airlines serve destinations from Manila—with a layover at the Middle East—to Europe.
“Now, if we give more entitlements to Middle Eastern carriers, what they will do is to carry passengers from Manila to Europe. They can offer cheaper fares, although there is a layover,” Bautista told reporters in a chance interview.
He explained that PAL will find it hard to make profit if it expands its operations in Europe, if the seemingly unfair competition with Middle Easter carriers persists.
He urged the government to review its regulations in aviation and ensure fair competition in the market.
“We really need to compete. If there is a level playing field, okay lang, eh. We compete with them on the Middle East routes. They have more flights than PAL, because they carry passengers beyond Manila and the Middle East. I think this is the reason they want more entitlements for them to be able to carry more passengers beyond their hub,” Bautista said.
He added: “So iyon ang nagiging disadvantage namin. We should be getting passengers from Manila to London, but because of these flights to the Middle East, kinukuha nila [ang mga pasahero].”
Bautista also asked the government to “look at the third and fourth freedoms of the air.”
The third and fourth freedoms allow basic international service between two countries, with the former being the right to carry passenger from one’s own country to another and the latter being the right to carry passengers or cargo from another country to one’s own.
But even with these two freedoms granted, air-services agreements may still restrict some aspects of the traffic. These include the frequency of flights, the capacity of the aircraft and the airports to be served.
“Sobra-sobra iyong entitlements ng Middle East,” Bautista commented.
Hence, PAL’s expansion to Europe will depend on market conditions—demand- and regulations-wise.
“For us to be able to continue flying to Europe, our operations will have to continue to be profitable,” Bautista said. “It depends on the situation in the future.”
The flag carrier was supposed to expand its services in Europe, after the European Union removed the Philippines from its aviation-safety blacklist two years ago. It currently serves one European market, London.
Should PAL decide to expand its European operations, Bautista said the company could either lease or buy a brand-new airliner from French airplane maker Airbus.
On Wednesday Airbus flew in from Taipei its new Airbus A350 extra-wide-body (XWB) to Manila.
PAL is now evaluating the prospect of acquiring or leasing one of these new aircraft for its Transpacific operations.
“There would be a need for us to get some long-haul aircraft for expansion in North America, Europe and Rome,” Bautista said. “This would be the next-generation aircraft. We will study this very carefully.”
The A350 is the latest addition to the market-leading Airbus widebody product line. Seating up to 369 passengers in a two-class layout, the aircraft can fly on routes of up to 8,000 nautical miles, enabling nonstop service from Manila to Europe or North America.
The aircraft features the latest aerodynamic design, carbon-fiber fuselage and wings, plus new fuel-efficient Rolls-Royce Trent XWB engines. Together, these latest technologies translate into unrivaled levels of operational efficiency, with a 25-percent reduction in fuelburn and emissions, and significantly lower maintenance costs.
For passengers, the A350 XWB brings new levels of in-flight comfort, with more personal space in all classes. In the premium cabin, airlines can install the most luxurious lie-flat seats, while the extra-wide fuselage allows for comfortable full service or budget layouts in economy class. The aircraft also features wider panoramic windows, larger overhead stowage compartments and a new draught-free air-conditioning system, as well as the latest in-flight entertainment and connectivity systems.
The A350 XWB has been especially successful in the Asia-Pacific region, where airlines have ordered a total of 244 aircraft, representing almost a third of the 780 orders recorded so far worldwide. Carriers from the region that have already ordered the aircraft for their future long-haul operations include Asiana Airlines, Air China, Cathay Pacific Airways, China Airlines, Japan Airlines, Singapore Airlines, Thai Airways International and Vietnam Airlines.
Image credits: AIRBUS