Plans to resume flights to New York by October
By Miguel R. Camus
Philippine Daily Inquirer
4:49 am | Wednesday, May 14th, 2014
PAL president Ramon S. Ang: Turnaround. INQUIRER PHOTO / LEO M. SABANGAN II
MANILA, Philippines—Philippine Airlines (PAL) may end years of losses in 2014 with a costly writedown from retiring old planes out of the way as the flag carrier remains bullish on new routes, its top official said.
PAL president Ramon S. Ang told reporters late Monday that the airline would see a turnaround this year after it incurred an P11.85-billion loss in the nine months through the end of December last year.
The strategy, which may involve acquiring next-generation long-range aircraft from US planemaker Boeing and Europe’s Airbus S.A.S., is partly hinged on introducing new routes. Ang said this included launching flights to the US East Coast starting with the revival of the New York route possibly by October this year.
Ang earlier said that PAL would book a profit by 2015.
“We reported a loss of $250 million, that is the writeoff of old aircraft,” Ang told reporters at the sidelines of a ceremony retiring decades-old Boeing 747-400s to be replaced by more fuel-efficient Boeing 777-300ERs for existing flights to the US East Coast.
This would bring about $120 million in annual fuel and maintenance savings, PAL said in a separate statement.
“We are confident that PAL will be profitable right away,” Ang said.
He cited commercial improvements for PAL’s Manila-to-London flights launched in November last year and the airline was now studying the expansion to other European cities like Paris and Amsterdam. In the US, where expansion was made possible by the restoration of the country’s Category 1 rating last month, PAL was also looking at Chicago and Florida, Ang said.
Details here were still being worked out, but the airline was mulling over Manila-Vancouver-New York flights or possible US East Coast flights via Tokyo, Ang said.
But the expansion into more profitable routes like the United States would require PAL to acquire new planes not previously included in its aircraft order plan, analysts had said, referring to the company’s order of 64 planes from Airbus valued at $9.5 billion through 2019. Ang said PAL has received about 30 planes so far.
On new aircraft, he said they were studying the acquisition of new planes like the Boeing 777X, which will be delivered starting 2021, and even the next generation of Airbus A350s.
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Tags: Business , Earnings Forecast , Philippine Airlines (PAL) , Ramon S. Ang
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