PAL to break even by end-2012, says Ang

PAL hopes to reverse its fortunes with savings from the realignment of its flights

RIGHT PLANE FOR THE RIGHT FLIGHT. Philippine Airlines expects to realize at least $300 million in savings each year by aligning aircrafts like the Boeing 777-300ER above to long-haul destinations. Photo courtesy of PAL.

MANILA, Philippines – After ending its last fiscal year in the red, legacy carrier Philippine Airlines (PAL) expects to break even by the end of 2012, thanks to savings from the realignment of its flights, the airline’s top official said.

“I think 2012 will end at least break even,” said PAL president Ramon Ang at a company-hosted cocktail party on Monday, July 23.

He explained that large aircraft would be shifted to profitable long-haul destinations that would not only make money from ticket sales but make the most of fuel which is typically one of an airline’s biggest costs. 

“Many airplanes which are too big or too long-range go to nearby destinations. On the other hand, for the distant destinations, small airplanes are used. Now we have the right [aircraft]. Proper realignment will save us $300 million each year,” he said in Filipino.

“The situation now is like using a Mercedes Benz to deliver pizza. Why not just use a Honda C100 to deliver pizza…. (Use the) right aircraft for the right destination,” he added.

He said PAL will dispatch its new Boeing 777-300ER aircraft to long-haul destinations like Toronto, Paris and New York in the future.

The airline took possession of its third Boeing 777 this month and Ang expects at least one more to be delivered this year. At least two more will follow next year. 

Ang said each aircraft represents a $290-million dollar investment. However, the airline expects each Boeing 777 to deliver $20 million in savings each year. 

PAL incurred P3.63 billlion in losses in its fiscal year ending March 31, 2012, due to high jet fuel costs. In its fiscal year 2011, PAL booked P2.53 billion earnings. – Rappler.com