Airlines In The Philippines II

[Arianespace]

Eurest wrote

Those 2 B77W may not be enough
The US is expecting 9.5M passport applications and renewals this year
And processing times are 10 weeks

Dec'22 might be the VFaRmaggeddon for revenge travel
A comeback to LHR might easily fill up a B77W, and PR is quite experienced with the longer route

I did asked this question and he said the 2 B77w is enough. Although it is still tight. The 4 LH 359 will not be coming back until 4 years. So yes, they are coming back, like what I told you before. There is possibility of them leasing 2 more B77w to fill the gap next year. But nothing is set in stone yet.

As to why older B77w, leases are cheaper, and plenty available.

Or maybe because they are waiting for the 6 new widebody orders still to be made. Definitely no new orders for the next two years.

[Eurest]

PR exited Receivership in Oct07, but added a 5th B744 in '03, 2 A320s in '04 the 9-6-5 A320 family order in Dec'05, and signed the 2+2 B77W in Dec'06
And added the 3 Q300 6 Q400 a year later from exit
So there is precedent for immediate fleet additions

Arianespace wrote

Definitely no new orders for the next two years.

2 years no new orders but possible arrivals?
Those 2 MAGI ex-QR B77W could easily be 300k/mo
PR's original fleet planning seems to have changed
The deferment on the 295's might not just be not having slack with longhaul AC but W performance as well
No news on the 309's reconfiguration and marketing for SYD/MEL seems like seeing W assessment on medium haul as well
Data gathering for up to Dec'22 is most likely. If medium-haul premium economy performs well, this would definitely factor in fleet modernization

MH is only now replacing their A330 fleet which is 2 years older than PR, perhaps PR is following a similar replacement age for their A333.
PR's RFP might be 2 years from now for a medium size widebody
With RP-C7777 turning 16 Nov'25, the same age as it was supposed to replace the 1993 built B744
PR might also RFP for a large widebody (350+) by 2024

A 20+20 widebody order by 2024, although split into two 10+10s would generate better pricing leverage from Boeing & Airbus

The only chance of new AC by next year is if Airbus & RR can convince PR to take A330NEOs but it would have to be at a price too good to pass up.

[XWB_flyer]

Guess my speculation are right no new orders anytime soon! Though it is intresting to learn about leasing  2 additional B77W which those make senes when there this surged in demand is likely temporary and will normalised in 2-4 years once restrictions on major hubs in China, Korea and Japan start to lesson and eating up demand again.

Speaking of new orders in 2 years time could this be a replacement for the A330-300? Rather then the Boeing 777-300ER since PAL seem to extending there service life for a few more years?

And what about the remaining A321neo is PAL considering converting some to either the A321LR  or the A321XLR or a top off will be made to the existing order? And is delivery still planned for 2025-2026 or will it be forwared to 2023-2024?

Lastly will PAL Cargo eventually have a dedicated fleet of A320 family P2F  soon?

[Arianespace]

There is a big difference between ordering new planes and leasing older ones. The difference spells a million dollars. Quoted rates defines a middle age plane, ie 6-10 years old. IBA listed 200/mo for some planes. 7777/76 lease rate is even way less than that.

The one in the desert however has substantial rate hovering above half million. To subsidize cost you need values of the old ones to better manage fleet portfolio and revenue potentials of the new, which I think goes with their RPM plan. In short, PAL earns most flying 77 than 81.

Indeed, PAL had habits of adding interim planes while waiting for their pot money to fill, less equity returns. Latest case in point would be the Iberian 340s.

Having said that, it can easily be argued they could have 12 big and 8 small widebodies for a total of 20 by 2030. Still the same figure first hatched in 2016. As to what they would be remains to be seen. And with the XLR flying by then PAL would only need about 10  midrange wides, for a total of 30 at best.

[seven13]

Just happened to open FR24. C7775 is flying somewhere but without a destination. Could it be for maintenance or return to lessor?

[Eurest]

It's looking more likely that MH will be getting the open manufacturing slots for the A330NEO for the next couple of years for their order of 30 to replace their A332+A333 fleet of 20 aircraft.
 Safe to assume its a 20+10. So someone's hope for PR A339 NEOs have dimmed
Just 3 weeks ago, the A350 was in contention ,but aggressive pricing for the NEO driven by both Airbus & RR seems to have done it for the A330NEO.
It's not a coincidence RR is now publicly speaking about widebody jet market recovery a few days after Airbus did. And they won't say that publicly without securing deals.

Securing the 10B$ order for 30 A330NEOs was apparently necessary for the board to approve the ramp up to 75 aircraft per month

I asked about 81 and 74 and why leasing them back would take time
They answered with bits agreed upon the Ch11
So from March15-16/'20 to Sep'20 and then Mar1'22 Regular lease @market rate plus maintenance cover
Sep'20-Sep'21 Lease rates based on hours of utilization
Oct'21-Feb'22 Ch11 agreed upon lease rate
PR is up to date with payments except for the period prior to Sep'20
In Jan'22 PR executed a promissory note for 25% of the amount due for Mar'20 to Sep'20, I assumed PR would only need to pay 25% instead of the full 100% lease rate of the initial 6 month CoViD period
It would be safe to assume that both lessors would want payment before resumption of lease of RP-C7781 and RP-C7774

The interesting bit shared is that the B777W's lease expiry dates were not extended
I asked if they were on 12 or 16yr leases and all I got was a wry smile.
The suspicion is that when PR made the last 4 B77W order in 2015, that there was also a provisional agreement made for the replacement of the B77W fleet with B779s
The timeline of when the provisional agreement lapses was not mentioned but it would be safe to assume 2 years before the lease ends on the GECAS B77Ws

RP-C7773 is a mystery to me. Probably MRO slot availability.

I re-read Airbus Feb'22 announcement, and had the A350 reconfig had pushed through, the fleet would look like
2 313 A359
2 309 A333
2 359 A333
4 363 A333
8-10 370 B77W

There's probably going to be a minimum of 6 medium-haul high density configured A359s or possibly B777-9 to replace those 6 high density A333s

[Eurest]

seven13 wrote

Just happened to open FR24. C7775 is flying somewhere but without a destination. Could it be for maintenance or return to lessor?

It's showing as PR118 to YYZ for me, FR24 is buggy sometimes

PR usually uses PR5001 as a ferry flight number

[Arianespace]

Eurest wrote

The interesting bit shared is that the B777W's lease expiry dates were not extended
I asked if they were on 12 or 16yr leases and all I got was a wry smile.
The suspicion is that when PR made the last 4 B77W order in 2015, that there was also a provisional agreement made for the replacement of the B77W fleet with B779s

The timeline of when the provisional agreement lapses was not mentioned but it would be safe to assume 2 years before the lease ends on the GECAS B77Ws

Its a long term lease that expires 10 years with renewal and balloon options. 81/82 are expected to retire beginning 2027. C11 conditions, operate 1 lose 1. Meaning, its obligation to the latter is extinguished. 81 should have different terms when reactivated.

Source about the lease term is here. Sorry its paywall but you get the gist.

Meanwhile, 2 77w should be retiring at 4Q 2024, 77/76, supposedly to be replaced by newer ones out of proceeds from SLB of 74 and 75, with 2 more coming in 2025, replacing 74/75. Well I guess they are all under the bridge now. Perhaps Airbus can accommodate a pair for 2025 delivery should they make orders in 2024.

The remaining aircraft for delivery in the future includes thirteen (13) Airbus 321-231 NEO aircrafts to be delivered between 2026 and 2029. PAL and Airbus have agreed for further deferral of the deliveries from the original scheduled delivery between 2022 and 2025. No XLR from these remaining breed. Put that in mind folks. It can however modify some or all of it should they feel the need. But right now it is just standard neos. For regional routes, with this kit



On another front, is another interesting peek on fleet planning.

Remember, Eurest brought this out last June

Eurest wrote

 @thread#20

The IB 348 seat A359 is impressive, would you really pay more for a 375 seat A35K?
MAD-SCL is fairly similar to MNL-LAX

What if Airbus offered PR the 283T A359 with close to or similar to Iberia's 348 pax (would also cover the hi-density regional role) A359 and guaranteed it to LAX, with weight restrictions for JFK and YYZ?
A 400+pax A35K then for PR?

Maybe the dual widebody plan isn't A339/A359 + B779 OR B789&10 + A35K
BUT A359&A35K (technically 1 type but not really) + B77ERSF
Apparently the global airfreight demand is here to stay for the foreseeable future thus the majority of MROs doing P2F conversions. Perhaps we'll see a B77W BCF program soon aside from IAIs ERSF

I doubt PR will drop Boeing. PR still got Q400NGs from Canada despite the Airbus group ATRs being economically better. Going Boeing for the midsize or large widebody would make US expansion much easier, esp. with UAL's behavior towards PR

Well, according to source, Airbus made presentations for dense 348 seater A359 for North America in 2018 when they presented the 35K which just kills hope for the 339neo to go across the pond. Thus, my earlier calculations that they will take only 10 333 replacements should this push through. Apparently, the airline needs 4-6 dense versions. So it was considered. We just didn't thought it through.

A dilemma was also raised by Eurest about the seat difference between 359 and 35K with just 20 more passengers. Well the difference matters on the cargo volume. It will have substantial payload hit in winter. For while MAD-SCL and MNL-LAX would have almost the same range, the former does not suffer trade winds, while the latter does. So I guess it would have to drop 2 or 3 rows, about 321-330 pax unless it takes the 283t. Iberia has got 280t while PAL got 278t. Big difference.

Eurest wrote

There's probably going to be a minimum of 6 medium-haul high density configured A359s or possibly B777-9 to replace those 6 high density A333s

Sometimes I have a feeling Eurest knows something ahead that we don't while we still grapples for some inside information.

[Eurest]

I feel like the last line and commenting on the link might give away things that might make me being informed by you fine folks a bit restrictive.
Apologies for coming across as a weisenheimer, my intentions are purely academic

Arianespace is correct, the 348pax A359 would not be operationally viable year round MNL-LAX the way it is for IB though the ESAD for both is roughly the same
And yes they do not encounter all the same trade winds, MNL-LAX would encounter the westerlies and SCL-MAD would be the southeasterlies, with the northeasterlies the only common denominator
PR would have to change its luggage allotment for NA flights to get the 348pax A359 on North America flights.
On average, an IB A359 carries almost around 5 tons less pax luggage weight than the 295pax PR A359, which has implications on fuel, so even the latest A359 weight variant would not fulfill the NA operational requirement for PR if it had 348pax as 5 tons (278 into 283) would just be the luggage, and not the fuel to carry the fuel for the luggage and the weight of the difference in pax, and their seats, and their catering.

Also, I just realized PR's downsized total number of widebodies echo that of the pre-B77W fleetsize
Pre  2009 8 A333, 4 A343, 5 B744 17 Total
Post 2021 8 A333, 2 A359, 7 B77W 17 Total
Are you as curiously as interested as I am?

From 2009-2019, PR's longhaul fleet was fully modernized into a 30 strong widebody fleet
Pre C11 8 363p A333 6 309p A333 6 A359 10 B77W

So that's why Arianespace said 30 widebodies earlier, he does often like to drop firsthand info disguised as a passing remark. Similar 10 year timeline for the new fleet then?
I think he really wants to say more, but it might put his sources onto undue observation

As for Narrowbodies, I think that will be an interesting discussion once the operation of Sangley becomes a few years away

[JNC03]

Transportation Secretary Jimmy Bautista’s top priority is to pursue the NAIA Terminal 2 expansion project which he did not see get off the ground when he was still president and CEO of Philippine Airlines. The terminal building is exclusively used by PAL for domestic and international routes.

The expansion will increase the capacity of the terminal to 15 million passengers per year and can accommodate 12 to 17 aircraft.

[JNC03]

Looks like AK is testing the waters for the demand for AirAsia PH, the A333 without the AirAsia X branding

[Eurest]

I could have sworn I saw 2 posts here but couldn't reply to either but now I can't see both. Am I shadow-banned? Or is it my DE ISP? Was my laptop infected in Ataturk?

Anyways, I think it was XWB Flyer, and yes you are correct PR did have 15 A333s preC11

Supposedly, the plan is to bring back 13 A333 and all 10 B77W w/ the 2 A359 for post C11
Utilisation is the primary factor for the conservative widebody reactivation. There's no worthwhile flights to put them on in-between their NA missions. The B77Ws did fly missions like JPN right? Before CoViD?

The industry still expects Airlines to move onto new generation technologies, with oil prices being high and the increased focus on carbon emissions

[JNC03]

AirAsia Philippines is targeting to have 24 aircraft in operation by year-end as it seeks to relaunch more routes to international destinations with the reopening of borders.

Ricky Isla also expressed the need to secure bigger planes that are more cost efficient and environment friendly to fly more passengers.

https://business.inquirer.net/352623/airasia-ph-to-add-more-aircraft-this-year

[XWB_flyer]

Eurest wrote

I could have sworn I saw 2 posts here but couldn't reply to either but now I can't see both. Am I shadow-banned? Or is it my DE ISP? Was my laptop infected in Ataturk?

Anyways, I think it was XWB Flyer, and yes you are correct PR did have 15 A333s preC11

Supposedly, the plan is to bring back 13 A333 and all 10 B77W w/ the 2 A359 for post C11
Utilisation is the primary factor for the conservative widebody reactivation. There's no worthwhile flights to put them on in-between their NA missions. The B77Ws did fly missions like JPN right? Before CoViD?

The industry still expects Airlines to move onto new generation technologies, with oil prices being high and the increased focus on carbon emissions

Sorry I deleted my previous post wasn't happy with how I type it which felt like I'm repeating myself again. And in the end decided to not reply or replace my previous post which I'll share here

If PAL decided to acquire 7-10 A321XLR  it will need 10-11 to replace the A330-300 by 2024. Assuming PAL follows the rule of three and maintaining a larger number of Long haulers like either the A350-900 and B777-300ER the downside with this rule is it leave a spare aircraft unused which isn't efficient in terms of aircraft utilisation. MH has 6 A350-900 and exclusively uses them between KUL-LHR route in a twice daily frequency which frees 2 aircraft for either short haul flying or on a new route freqeuncy less then 7 times a week.

The 2 remaining A350-900 (3501 and 3508) can maintain the MNL-YVR for the time being which also extened to YYZ and JFK depending on the day of the week. I think the original plan was to keep 3504 as a back-up though I think LH was desperate for additional WB and decided to get it too which is understandable and recently decided to bring back even the A380-800 along with the A340-600 and B747-400. It will be a while before LH receive sufficent number of New Generation of twin engine Wide-bodys like A350s, B777-9 and B787-9. I also see a similar scanario with PR with two or three types of Wide-body in there fleet which will depend on both Management and the best deal offered by the  Manufacturers (Airbus or Boeing)

Lastly I'd like to add about T2 Expansion  if it proceeds its expanded capacity coud be used to consolidate PAL operations under one roft instead of the current split opreationa T1 and T2 Regional (Not sure if PALEx still operate at T3?). But I wonder what happend to the proposal to turn T2 in to the main Domestic Terminal? Has it been postponed? Was there strong opposition from all three main Philippine-based carriers? I'm  curious!

[seven13]

PAL currently operates almost all flights from T2 except from some routes which utilizes T1. No more PR in T3.

Pre covid, the B777s were used on some PR507/SIN 9am dep exMNL runs. I’m not sure if it did Pr730/BKK runs.  PR has always used the 878X series on NRT overnight (PR432). While the A350s did runs on PR300/HKG when it joined the fleet.

As for the T2 housing all domestic, would it be enough? Seems like it’s too small just handling 5J domestic ops.

[Arianespace]

JNC03 wrote

AirAsia Philippines is targeting to have 24 aircraft in operation by year-end as it seeks to relaunch more routes to international destinations with the reopening of borders.

Ricky Isla also expressed the need to secure bigger planes that are more cost efficient and environment friendly to fly more passengers.

https://business.inquirer.net/352623/airasia-ph-to-add-more-aircraft-this-year

See, told you. Like what I said. Policy directions.

What policy?
1. targeting 24 aircraft. They never had this size ever. At most they have is 14. Right now they don't even have 10 aircraft flying. 3 planes are still in storage. They recently activated the 7th. Again, policy direction to have 10 operational fleet. The target was to add 2 more, meaning, activate 8th and 9th before year end. How can you add something when 25% of your fleet is still on the ground.

2. relaunch more routes. Again policy directions. Its most lucrative market in China is still closed. Korea just opened barely. No flight still. They would be addressed by the inactive fleet. Considering half of their international capacity is still missing.

3. need to secure bigger planes. still policy directions. The A321neo is available next year, exactly to address growth issue. This is what he is referring to. Not the widebodies as they earlier envisioned in 2019. You should have asked Ricky how he proposed to integrate the A330 at NAIA? Did they managed to secure the slots for domestic ops? If it was not feasible for them then, it is still not feasible for them now.

4. we are also flying to Australia. another policy direction. they don't have rights to fly to Australia, at least for its PH version. Another good question would have been how are you going to fly there?

As I said earlier,  APG can use A333 at T3 for international route not domestic. In fact, AX is using them now.

JNC03 wrote

Transportation Secretary Jimmy Bautista’s top priority is to pursue the NAIA Terminal 2 expansion project which he did not see get off the ground when he was still president and CEO of Philippine Airlines. The terminal building is exclusively used by PAL for domestic and international routes.

The expansion will increase the capacity of the terminal to 15 million passengers per year and can accommodate 12 to 17 aircraft.

It will be interesting to see if JJB can pull this out of the bag. Honestly though, he can't.

While he may be transport boss, he is not in charge with resource allocations. NEDA is. Tugade and JJB did discussed this thing in 2017 while he still commanded PAL.

Sad thing about airport capital expenditure is that it must be consistent with National Transport Plan (NTP), through Philippine Transportation System Master Plan (PTSMP). Building a new NAIA terminal is not one of them. CRk and Bulacan airport however is. Tugade ended up renovating T2. It doesn't also help that when government approved Bulacan it is forbidden from making capital expenditure at NAIA while Bulacan is under construction.

Why?

Because it was meant to replace NAIA as premier airport, like BKK is to DMK.

DOTR ongoing project summary is here
https://dotr.gov.ph/55dotrnews/1966-build-build-build-for-the-future.html

NAIA inclusion was revived in 2021. No Congress approval yet. Approval chances is nil.
https://www.pna.gov.ph/articles/1156550

[Arianespace]

Eurest wrote

Anyways, I think it was XWB Flyer, and yes you are correct PR did have 15 A333s preC11

Did you know that out of this 15 planes, 7 are financial leases, and 8 are operating leases. Post C11, PAL terminated the latter except two while continue to operate the former except one.

In short, they kept all they bought, and let go almost all their leases. You will see these planes operate past their prime, like it did to their older siblings. Meanwhile, they will be fully paid in 2023 and 24.

By 2024 they will certainly have the money to buy new planes which would otherwise paid to PK financials after amortization payment ends.

[XWB_flyer]

Arianespace wrote

JNC03 wrote

Transportation Secretary Jimmy Bautista’s top priority is to pursue the NAIA Terminal 2 expansion project which he did not see get off the ground when he was still president and CEO of Philippine Airlines. The terminal building is exclusively used by PAL for domestic and international routes.

The expansion will increase the capacity of the terminal to 15 million passengers per year and can accommodate 12 to 17 aircraft.

It will be interesting to see if JJB can pull this out of the bag. Honestly though, he can't.

While he may be transport boss, he is not in charge with resource allocations. NEDA is. Tugade and JJB did discussed this thing in 2017 while he still commanded PAL.

Sad thing about airport capital expenditure is that it must be consistent with National Transport Plan (NTP), through Philippine Transportation System Master Plan (PTSMP). Building a new NAIA terminal is not one of them. CRk and Bulacan airport however is. Tugade ended up renovating T2. It doesn't also help that when government approved Bulacan it is forbidden from making capital expenditure at NAIA while Bulacan is under construction.

Why?

Because it was meant to replace NAIA as premier airport, like BKK is to DMK.

DOTR ongoing project summary is here
https://dotr.gov.ph/55dotrnews/1966-build-build-build-for-the-future.html

NAIA inclusion was revived in 2021. No Congress approval yet. Approval chances is nil.
https://www.pna.gov.ph/articles/1156550

I'm curious who made the provision  that forbade the government from further expansion in MNL? Until the completion of NMIA and CRK T2? From a long-term view it makes sense as means MNL could become a Domestic Airport while NMIA for International and Regional Routes and CRK for Nothern Luzon

[JNC03]

AirAsia Philippines plans to service the Australia route to cater to the needs of overseas Filipinos in the continent.

At the same time, it is doing market visits to other international destinations, such as the Middle East.

https://mb.com.ph/2022/07/13/airasia-to-expand-its-ph-fleet/

[XWB_flyer]

JNC03 wrote

AirAsia Philippines plans to service the Australia route to cater to the needs of overseas Filipinos in the continent.

At the same time, it is doing market visits to other international destinations, such as the Middle East.

https://mb.com.ph/2022/07/13/airasia-to-expand-its-ph-fleet/

Btw recently Z2 cease operations at GES  probably in favor for newer routes like Roxas and making ZAM  daily. I wonder if they will returned in the near future probably in 2-5 years time when demand starts to grow again and the have sufficient number of larger aircraft like A321neo and maybe A330-900neo?