PAL goes slow on re-fleeting

By Lawrence Agcaoili, The Philippine Star

Posted at Mar 10 2013 06:04 PM | Updated as of Mar 11 2013 02:05 AM

MANILA, Philippines -- National flag carrier Philippine Airlines (PAL) is temporarily putting on hold its aggressive re-fleeting program involving the acquisition of 100 new aircraft due to safety issues affecting Boeing Co. of the US.

PAL president and chief operating officer Ramon S. Ang said in an interview with reporters that the airline was looking at the newly-launched Boeing 787 also called as “Dreamliners” as part of its aggressive expansion program.

“We were looking at the Dreamliner and the other new Airbuses,” Ang stressed.

However, the US Federal Aviation Administration (US-FAA) ordered the grounding of about 50 Boeing 787 last Jan. 16 because of unsafe conditions caused by the battery system.

It is not yet clear when the US FAA would lift the ban amid a proposed fix for the plane’s troubled batteries that resulted to emergency landings in Boston and Japan.

Ang said PAL would wait for the results of the investigation on the Boeing 787 or “Dreamliners.”

Since the entry of diversified conglomerate San Miguel Corp. (SMC), PAL announced a major re-fleeting program involving the acquisition of 100 aircraft.

So far, PAL has acquired 64 aircraft from Airbus in a deal worth close to $10 billion.

Ang, who is also president and chief operating officer of SMC, said the aircraft from Airbus consisting of 44 A321 and 20 A330 would be delivered over the next three years.

This year about 16 aircraft consisting of eight A321 and eight A330 would be delivered starting September.

He pointed out that the company’s old fleet half of which is being leased would gradually be replaced by the new aircraft.

PAL maintains and operates 42 aircraft comprising of five Boeing B747-400s and four B777-300ERs as well as four Airbus A340-300s, eight A330-300s, 17 A320-200s, and four A319-100s.

“We have stopped renewing all our lease contracts since the middle of last year,” he revealed.

Ang said the ongoing re-fleeting program involving the acquisition of fuel efficient aircraft as well as the impending lifting of the ban on local airlines to fly to Europe and to mount additional flights to the US would help PAL return to profitability next year.

The airline’s parent firm PAL Holdings Inc. trimmed its losses by 24 percent to P2.74 billion in the first nine months of its fiscal year from P3.59 billion as total revenues climbed by 2.4 percent to P55.68 billion from P54.38 billion on the back of higher revenues from its passenger and cargo businesses.