PAL hopes for 10% higher domestic passengers in 2012

Rappler.com
After a double-digit drop in domestic traffic in 2011, PAL is hoping for a double-digit increase in 2012

MANILA, Philippines – Philippine Airlines is expecting a 10 to 12% increase in domestic traffic this year, according to PAL president Jaime Bautista on the sidelines of the company’s 71st anniversary party on March 15.

If PAL is able to deliver on that promise, it would be a big reversal of fortune from last year when the number of domestic passengers dropped 18.8% largely due to flights cancelled as employees protested its outsourcing move.

Bautista expects the improvement to come through improved load factor since there are no plans to add capacity as aggressively as the competitors.

Between September to November of 2011, the PAL’s load factor for domestic operation was in the low-70%, while its international operation was mid-70%. 

Below is the performance of the airlines flying domestic routes, according to data earlier provided by the Civil Aviation Board.

  AIRLINE  Total 2010 passengers    Total 2011 passengers   Allocated seats in 2011   Load factor
  Cebu Pacific 7,972,659 8,478,007 10,507,987 81%
  Philippine Airlines 5,311,518 4,312,325 5,786,611 75%
  Airphil Express 1,849,888 3,698,902   74%
  Zest Air 1,229,619 2,151,410   74%
  Seair 193,183 124,468   75%

 
Load factor refers to the number of seats occupied during a flight. It’s an industry measure of profitability.

2012 plans

But Bautista said, “The markets in every city are growing. That’s why there are new airports that are being developed to support the growth in market.”

PAL is gearing up for direct flights to Bali, a popular tourist destination in Indonesia, as well bringing back its direct flights to India.

Bautista said PAL would study the possibility of mounting flights from Cebu to Darwin in northern Australia.  

Bautista also expressed hope that regulatory restrictions abroad would ease.

PAL has previously been unable to deploy some of its wide-bodied aircraft to the lucrative markets, especially in North America, after the regulatory bodies of US and EU, citing the government’s lack of oversight on safety issues, banned Philippine carriers from mounting additional or new flights. 

The legacy carrier needs to make up for its poor financals in October to December 2011, the third quarter of its fiscal year, when it incurred net loses of $33.5 million. In the same period in 2010, the airline had a net income of $15.1 million

Talk has been rife that PAL chairman Lucio Tan has been entertaining potential buyers for the local airline, including those from the diversified conglomerates San Miguel Corp. and Metro Pacific Investments Corp.

Bautista said he could not confirm reports that PAL is up for sale because if there are talks, he is not involved. – Rappler.com