Airlines In The Philippines II

[Crash&burn]

A350s might see a reduction in either YYZ, JFK or maybe LHR..

[Arianespace]

Arianespace wrote

This is going to be more interesting.

https://www.flightglobal.com/news/articles/united-airlines-protests-pal-express-and-pal-codesha-462373/

I was previously talking to AA's chances of acquiring MNL slot should they be awarded DOT permission to fly. Well, UA has the same problem. And they are already here.

United currently operates one daily direct flight between the US territory in the Pacific Ocean and the Philippine capital, and would like to add another daily connection. However, it says it has been denied “slots and other airport infrastructure necessary for its additional flight plans.”

The truth, it was not denied. They were asked to look for another time since the time they requested is already full. ANZ also did the same thing but cannot find suitable time so PAL flew instead. It could always fly Clark or Cebu. But it wanted to fly MNL.

By the way, the time offered to them was eventually given to a Chinese carrier because they won't compromise on the supposed applied slot.

So you see, if you are flexible with the slot, then you'll have one.

Lanmei Airlines adds new SE Asia routes in late-March 2020

Phnom Penh – Manila eff 29MAR20 5 weekly A319
LQ760 PNH2315 – 0310+1MNL 319 x15
LQ761 MNL0420 – 0620PNH 319 x26

Unfortunately for UA, they want a specific time which is already closed.

[Evodesire]

Noticed that PAL now doesn't have tht 4-star Skytrax logo. I also noticed that their marketing has been silent lately. No noise about Perth and all. Are they  downgrading the service level to return to a 3-star airline? Wouldn't this be a blow to the new management headed by Vivienne Tan in the guise of Gilbert Sta. Maria?

Excited for those airplane orders should their be any this year. I just hope they dont lose that 4-star ranking. They would not want the news media to say "PAL downgraded back to 3-star airline". I know profits are important but branding/marketing plays an equally important role too.

[Unbreakable]

Ugh. Vivan.

[manilamini]

Not at all surprised. These past few months, PAL has deteriorated in terms of service to the levels of the Lucio Tan era before SMC. Lack of drink choices, Poor food at the lounge etc...The lounge at SFO no longer has bottled water and the wine is under lock and key where you have to ask for the key to get a glass

[Ano]

I disagree. PAL service during SMC was dismal. It was during LT times post SMC (when there was still money to push for 5star) that was great. And lock and key for the wines in SFO i think is only to make sure on one below 21 gets hold of alcohol? My two cents.

[Evodesire]

I agree with you. PAL's product was really bad during the SMC days. A comparison between the A330/A321s delivered during RSA's period vs those delivered when LT came back in will show clearly why. Add the fact that RSA went for those addl ex-IB A340s which are not that far in terms of age from first batch of PAL A340s. Add under-utilized aircraft, you had 2 777s stored in CRK.

RSA wanted to turn PAL into an LCC and compete with Cebu Pacific. When LT got it back, he wanted PAL to compete against the likes of Cathay Pacific.

[manilamini]

I agree, PAL under SMC was more of an LCC. No arguments there. What I am pointing out is that they are more like the PAL under LT pre SMC nowadays rather than PAL after SMC under JJB.

Remember the time when they didn't have Coke but rather Virgin Cola and no San Miguel Beer? They are slowly going back to those days. Common, putting your wine under lock and key in a business class lounge???? Under 21 makes no sense since there are other alcoholic drinks not locked. They are merely locking the expensive stuff.

[XWB_flyer]

PAL was recently given new afternoon slots for its flights between MNL-LHR. Compared to the previous arrival slots the new arrival time is now mid-afternoon rather then early evening.

http://www.travelquotidiano.com/trasporti/philippine-airlines-piu-connessioni-dallitalia-grazie-ai-nuovi-slot-a-londra-heathrow/tqid-373112

[Arianespace]

This was their original time when they were still at LHR T4. Not something new. And then they transferred to T3. The gate however was a mile walk. And then they secured a nearer gate with an earlier time. Couple it with fleet schedule rationalization to fly YYZ because of new routes coming online so viola.

This kinda remind me circa 2006 when B744 was operating to the max. One downtime would cause schedule haywire that ripples for a month or so. That is not good for skytrak rating much less OTP as it affects front seat occupancy. JJB was able to steer the airline away from it. And then, they are back at it again. If you know what I mean, PR 104 nowadays flies more so often as 5104 in the morning. And that is a delayed flight. Because there is no plane on the ground.

[Eurest]

Finally got some info from pals on why "UA can't expand in MNL"

UA can't fly US mainland to PH as per US-PH ASA
UA is considered a Route 2 carrier as of 1995 amendments, restricting it to Saipan, Guam, Palau from MNL

DL is a route 1 carrier, it inherited the "Pacific Carrier" designation from NWA, 90's UA was also one.
This was in the old days when Atlantic and Pacific ops were split by the DoT
UA is contractually obligated to fly the Island hopper route it inherited from Continental Micronesia.
I believed it's subsidized and heavily profitable.
DoT says UA can't fly SFO-MNL, DEN-MNL, EWR-MNL because those are Route 1 flights for US-PH ASA
UA wants new ASA removing Route 1 and 2 distinctions, DoT only wants Open Skies. PH can't offer Open Skies because MNL is slot restricted.
Boeing sees PR's expansion as good for 777X prospects, has worked with Chinese conglomerate keen on investing in PR expansion

JL has moved on to MH, AA might give up on MNL plans if JL succeeds on acquiring MH

Conglomerate from mainland China is PR's new investor. CoViD 19 may delay or hamper PR's expansion but it will happen.
PR's load factor post CNY from North American flights very impressive, A35K and B779 not if but when.

[Arianespace]

Sure they can. This was actually included in the merger plan between continental and united in 2010. United is still a carrier as it was before the merger, with full rights to cross the pacific.  It was just taking over the island hopping service of continental micronesia after that. What is not allowed is for them to make a feed out of GUM to continental US. They can fly direct if they want to. I actually explained this 6 months ago here.

Arianespace wrote

Use it or lose it. United operated B747 to Gimpo daily and twice weekly to Taipei. That was circa 1990s or thereabouts. United gained the grandfather rights because it acquired PAN AM Pacific Division in 1985 covering Japan and South Korea.

United got the green light to fly to Asia taking Pan Am routes to Taipei, Singapore, Bangkok, Seoul, Manila, Beijing, Australia and New Zealand in 1986. The Philippines granted landing permission in 1987 with reservations for similar rights out of Tokyo for the United States. In exchange for that is the PAL flight from Tokyo.

That beyond right ceased in 1995 when they amended the US transport agreement. United left in 1997 if my memory serves me right. I've made similar comment about this in the other forum 10 years ago about northwest losing the same grandfather right should they abandon Narita. Almost 40 years later, that right to fly from Tokyo to the US still remains a dream for Philippine based carriers and so is the American's request for open skies which I think would never come.

The Philippines complaint to US open skies is actually similar to Japan and South Korea. United States does not allow foreign carriers to establish hubs at U.S. destinations such as Los Angeles or San Francisco. In 1994 PAL would have wanted to establish a Los Angeles hub for points in New York, Chicago, Seattle, Houston, and Washington airports but US doesn't allow it to do so. Similar restrictions are made to Japanese and Korean carriers. That's why its a tough sale for the Americans.

As to its current status, UA can fly to MNL if they are not choosy about slots which by the way is not controlled by the Philippine government. If I may, try asking SCA, a company based in the land down under.  
 

[Eurest]

You may be confusing the same restrictions that PH airlines abide by the ATA

Doesn't UA operate flights between Saipan, Guam and Palau?

1/ It is agreed that any U.S. airline designated on Route 1 of Annex I shall be a Pacific regional airline which does not operate scheduled combination air service between Saipan, Palau, or Guam, on the one hand, and nonstop to Hawaii and/or the U .S . mainland on the other.

Is our conflicting info similar to the A330 Malta flight wherein you said it would be the longest flight but I said it would need a stopover?

[Arianespace]

I was expecting you would raise these issue. Now my retort.

1/ It is agreed that any U.S. airline designated on Route 1 of Annex I shall be a Pacific regional airline which does not operate scheduled combination air service between Saipan, Palau, or Guam, on the one hand, and nonstop to Hawaii and/or the U .S . mainland on the other.

Isn't United Airlines a non-pacific regional airline? And while at it, Isn't UA flying HNL?

If all your answer to this question is YES then they should not be flying to the Philippines won't they?

But why is UA still flying here?

Because the one you cited was made in 1995 while the United Continental merger happened in 2010. The merger resulted in the elimination of Continental Micronesia's operating certificate. In fact, Continental Micronesia become effectively United Airlines in April 1, 2017. Surely, this won't be compatible to the ASA but why are they approved?

This is what we call "realities of the times". Thats how flexible the ASA is. Because UA inherited routes of CS and their planes, and so they are here. Its the same reason why they are permitted to fly Route 2 because they took PAN AM and so is the latter's designation.

While it doesn't bother, and perhaps you may have miss it as it was above the paragraph you are quoting, it also speak this way:

(c) to designate one airline to perform both combination services
on Route 1 a and all-cargo services on Route 1 b of Annex
I ; and (d) to withdraw 1/or alter 1/such designations .
Such designations shall be transmitted to the other Party
through diplomatic channels.

Again, for the sake of argument, if your position is spot on, Why does CEB permitted to fly GUM? Isn't it not contrary to the ONE AIRLINE designation on Route 1 per party? Because from all indications its very clear in the ASA is it not?

And while at it, why does HA designated for Route 2 instead of AA when clearly it is not a main-lander? Because it flew here. AA doesn't. Does the 3 airline designation rule ring a bell? If you think about it its actually the same rule applied to PAA application to its propose GUM flight which was denied. PAL, CEB, GAP flew Micronesia at one time or another. Its the same reason why AA application to fly MNL would also fail if none of the three american carriers would not yield this right.

And here is another matter about intermediate points which coincidentally was flown by UA

(h) "Intermediate" means a point served on a flight between the homeland of an airline of one Party and a
point in the territory of the other Party., Thus, on a route United states-Tokyo-Taipei-Philippines-Taipei-Tokyo-United States, Tokyo and Taipei are intermediate points.

The thing is, It doesn't mean also that when bilateral calls for intermediate points in HNL, SFO,LAX, ORD towards say JFK requires designated airlines to also stop in HNL, SFO, or LAX like they did before. Because airliners can now actually fly there directly. Realities of the times.

As to the A333 HER flight in 2014, I did say I was wrong on that.

[seven13]

PR has already begun publishing its summer schedule. Noticeably, PR114 will be re-timed similar to PR112, lunch time slot departure ex-MNL, and an early AM arrival in SFO. Is the retiming of PR114 paving the way for MNLSEA launch?

[Evodesire]

It shows that PAL has incurred its greatest loss in its operating history. So what could be the story behind this and whats in store for the airline in the future?

[Solblanc]

The loss is disturbing. Taal and coronavirus are pretty recent, so that means that PAL has been consistently bleeding money for a while now. It’s almost as if they squandered the ANA cash-flow altogether.

That is pretty disturbing. Any expansion isn’t sustainable
in this environment, not to mention that every airline in the world is having to hang on while the coronavirus takes its toll on global travel.

[Evodesire]

Its the biggest in history, I think it even beat the loses incurred during the Asian financial crisis that almost caused the airline to shutdown permanently. Though Arianespace did present something on decoding PAL's loses but Im more concerned about this 10.6B loss.

[Arianespace]

The PAL malady can best be described by its former President.

Avelino Zapanta said PAL was losing a big amount of money in the last two to three years because it was paying lease charges for so many aircraft that they were not using optimally.

“The economics of airline operations lies in the optimal utilization of your fleet,” he said.

Zapanta added the reduction of manpower could help PAL to reduce losses “but the reduction of 300 manpower to 1,000 is not as much as loss when you are amortizing millions of dollars of aircraft and you are not generating enough revenues.”

In order to cuts its losses, Zapanta said PAL should increase its flights frequencies and introduce more flights to gain more traffic.

“PAL has over 100 aircraft, but the problem is that PAL is not utilizing its aircraft optimally.” but Zapanta said.

“They have to take the challenge unless they don’t have the confidence of doing that. They will turn around if they will generate more traffic and revenue,” he said.

The best unpaid and unsolicited advice to Sta. Maria.

To put the best picture, PAL’s international market share shrunk to 51.5 percent in 2018 from 52.9 percent in 2017.

The domestic market share of PAL and subsidiary PAL Express also fell to 29 percent last year from 43.17 percent in 2010. In 2018, PAL Group’s domestic market share stood at 29.94 percent.

To say that is bad is an understatement. Adding more fleet to the picture makes it worse. Narrow-body fleet that is. Most of that attributed to no fault of its own. Slot issues in MNL, which by the way is the scapegoat of UAL objections seems to be also their problem. Meanwhile, turboprops in CEB hub seems to be doing OK.

By the way, its not its biggest shortfall.

[Evodesire]

Don't they have plans to expand wide body and long haul operations from CRK? Well the CEB-LAX is a good move which I hope does well. Will a CRK-LAX also help?