Airlines In The Philippines III

[Evodesire]

Maybe its because of load factor. Before the pandemic, I do remember PAL deploying A340s, then later on A350s, as PR102/103 on some days.

Importance of still having more A350-900s in the fleet. This is why I hope part of PAL's next order will include more A350-900s.

[Arianespace]

romantic_guy08 wrote

I find the flight dispatch of PAL odd... and I'm confused...

They had flights to BKK, HKG and LAX departing at the around the same time...

And yet, chose to use the A333 to LAX (via ICN), and then deploy the 77Ws to BKK and HKG...

Am I missing something? or does it not make sense to use the 77W instead to LAX (PR 112) instead of deploying them to BKK and HKG when they departed almost at the same time... instead they use the A333 to LAX with a one-stop in ICN.

Flight dispatch is booked one month in advance. Its called "fleet optimization" plan. It gets screwed when 1 plane suddenly goes AOG, like the 77.

The purpose of the plan is to be able to operate all the flights without shortage of aircraft. Not a problem if you have sufficient fleet. A big problem when you don't have one.

To have flight planning in perspective, LAX, SFO and YVR requires 3 aircraft. 3 departures = 3 planes. Since they fly daily, you need another 3 to fly the next day, as those planes that departed earlier return 2 days after, you need another 3 planes to depart the next day, or a total of 6 planes.

Since PAL fly another morning daily flight to LAX, technically they can add only 1 plane for efficient rotation for a total of seven. And that also assumes you have brand new aircraft as they have no maintenance issues. PAL has 9 ageing 77w aircraft so that should cover it.

On the surface, yes. But the 8th plane does rotation to JFK and YYZ as a pair to the 359 while the other one is on scheduled AOG. So you can't use the 8th. The 9th 77w plane is also on scheduled AOG. So they just have 7 planes to contend. Which is enough.

And then shit happens to the 77 requiring immediate AOG, that gives them only 6 operating frames. Clearly not enough for the schedules they have.

And thus the reason for the existence of the A330 just to complete the seven.

[Evodesire]

Arianespace wrote

Flight dispatch is booked one month in advance. Its called "fleet optimization" plan. It gets screwed when 1 plane suddenly goes AOG, like the 77.

The purpose of the plan is to be able to operate all the flights without shortage of aircraft. Not a problem if you have sufficient fleet. A big problem when you don't have one.

To have flight planning in perspective, LAX, SFO and YVR requires 3 aircraft. 3 departures = 3 planes. Since they fly daily, you need another 3 to fly the next day, as those planes that departed earlier return 2 days after, you need another 3 planes to depart the next day, or a total of 6 planes.

Since PAL fly another morning daily flight to LAX, technically they can add only 1 plane for efficient rotation for a total of seven. And that also assumes you have brand new aircraft as they have no maintenance issues. PAL has 9 ageing 77w aircraft so that should cover it.

On the surface, yes. But the 8th plane does rotation to JFK and YYZ as a pair to the 359 while the other one is on scheduled AOG. So you can't use the 8th. The 9th 77w plane is also on scheduled AOG. So they just have 7 planes to contend. Which is enough.

And then shit happens to the 77 requiring immediate AOG, that gives them only 6 operating frames. Clearly not enough for the schedules they have.

And thus the reason for the existence of the A330 just to complete the seven.

No wonder why Cebu Pacific's cancellations have been reduced significantly, amidst the PW AOG issue. I believe they can now afford to have 2 to 3 spares for MNL and 1 for CEB given their current fleet inventory.

About PAL, the 9 777s include 7783 with 7776 gone and 7777 no longer flying, right? When will 7784 join the fleet, given that they badly lack planes?

[JNC03]

PAL REPORTS US$122 MILLION NET INCOME IN FIRST HALF
OF 2024

• Flag carrier generates US$1.6 Billion revenue for 1st half of 2024
• Passenger volume up by 13% to almost 8 Million passengers flown
• CAPEX spending increased to US$157Million for aircraft purchases and
maintenance, and product improvements
• Posted US$122 Million in net income
• PAL’s Debt to Equity improved to 2.06x as Total Debt goes down to US$1.6 Billion
and Equity increases to US$763 Million
• Mabuhay Miles membership surpasses 6 million level
• Financial results bear out flag carrier’s resilience and deliberate growth strategy

Overall, PAL announced a net income of US$122 Million and operating income of
US$182 Million for the six-month period, in line with expectations amidst a normalizing
market environment versus the travel demand surges of 2023.

Capital expenditures increased to US$157 Million mostly for aircraft purchases,
maintenance and cabin upgrades to reinforce operational integrity and a well-differentiated quality service for the airline’s customers.

"As the industry adjusts to a re-balancing between demand and capacity, and continues to
face cost and supply chain challenges, we are implementing a disciplined investment plan
to upgrade our fleet and continue our digital transformation so that we can serve our
passengers better," added Captain Stanley K. Ng, PAL President and Chief Operating
Officer.

[Gustavo J Oppenheimer]

There is no 'pasabog' yet, probably within the 3Q we would get a major update on fleet renewal

[airline_builder]

Evodesire wrote

Arianespace wrote

Flight dispatch is booked one month in advance. Its called "fleet optimization" plan. It gets screwed when 1 plane suddenly goes AOG, like the 77.

The purpose of the plan is to be able to operate all the flights without shortage of aircraft. Not a problem if you have sufficient fleet. A big problem when you don't have one.

To have flight planning in perspective, LAX, SFO and YVR requires 3 aircraft. 3 departures = 3 planes. Since they fly daily, you need another 3 to fly the next day, as those planes that departed earlier return 2 days after, you need another 3 planes to depart the next day, or a total of 6 planes.

Since PAL fly another morning daily flight to LAX, technically they can add only 1 plane for efficient rotation for a total of seven. And that also assumes you have brand new aircraft as they have no maintenance issues. PAL has 9 ageing 77w aircraft so that should cover it.

On the surface, yes. But the 8th plane does rotation to JFK and YYZ as a pair to the 359 while the other one is on scheduled AOG. So you can't use the 8th. The 9th 77w plane is also on scheduled AOG. So they just have 7 planes to contend. Which is enough.

And then shit happens to the 77 requiring immediate AOG, that gives them only 6 operating frames. Clearly not enough for the schedules they have.

And thus the reason for the existence of the A330 just to complete the seven.

No wonder why Cebu Pacific's cancellations have been reduced significantly, amidst the PW AOG issue. I believe they can now afford to have 2 to 3 spares for MNL and 1 for CEB given their current fleet inventory.

About PAL, the 9 777s include 7783 with 7776 gone and 7777 no longer flying, right? When will 7784 join the fleet, given that they badly lack planes?

So given this predicament and an up and coming Seattle Inauguration.

Wow a whole lot of Hogwartz going on

[Arianespace]

JNC03 wrote

PAL REPORTS US$122 MILLION NET INCOME IN FIRST HALF OF 2024

Just THINK about it. How come a company earning $140 million gross revenue in 2023 can order $24 Billion worth of aircraft in 2024? Because it can pay for it at $300 million amortization per year.

Now think how much PAL earned in 2023. A whooping $380 million net just in 2023 alone. This year judging from their biennial report they are heading for another $300 million net. Just look at their half performance above, which is normally lower than the second half forecast.

They already accumulated also almost half a billion dollars war chest for aircraft acquisitions. You add another $300m this year of their net earnings. That is already insane amount of money for discipline.

Assuming, they earned on average $250m a year x 10 years aircraft amortization. That is already $25b. Does PAL keep an aircraft for only 10 years? No. Just look how long they keep their fleet. Additional years already goes to their pocket.

So don't believe Stan statement about "disciplined investment plan" because as far as I am concerned, it was already busted just from the figures above. Please naman. Wag na tayo maglukuhan. Luto na po.

For the much slow learners, think how can $140 million gross earner beat $380 million net earner? It can't. But the $140 million earner just orders $24 billion aircraft. While the $380 million net earner merely orders $2.2B worth of aircraft. I mean really?

Are we this dimwit?

[JNC03]

I think they can afford to order but their are no moves yet publicly, but inside there is

Did the BOD met before the financial report released right?
Did they talked about their orders or just put it under the table?

[Arianespace]

JNC03 wrote

Did the BOD met before the financial report released right?

Of course. Otherwise there would be no report.Remember this too, they are the first to know and the last to admit.

The new orders are go. But they are not prepared to announce them yet as funding for these new acquisitions are not completed.

[airline_builder]

Arianespace wrote

JNC03 wrote

Did the BOD met before the financial report released right?

Of course. Otherwise there would be no report.Remember this too, they are the first to know and the last to admit.

The new orders are go. But they are not prepared to announce them yet as funding for these new acquisitions are not completed.

and what are these new orders?

outside the 9+3 and the 13neos?


I remember in one of the articles quoting CSN, the B777 will co-exist with the 35Ks. If that idea will still be put to practice - hope they refurbish the B777s and serve as the replacement for the ageing 330s

Would be great to see those B777s flying the MidEast, Australia, and back to Europe.

if PAL will be left with just 6 B777s - just like the status when the 359s came in...so why not?

[JNC03]

Since PAL saw higher cargo volume aside from passengers

The decision for the A320ceo replacement is getting obvious already

Since the funding is not complete yet, did they add more orders last minute🤔🤔

[frequentflier]

Arianespace wrote

JNC03 wrote

Did the BOD met before the financial report released right?

Of course. Otherwise there would be no report.Remember this too, they are the first to know and the last to admit.

The new orders are go. But they are not prepared to announce them yet as funding for these new acquisitions are not completed.

With the recent order of Cathay Pacific for A330 NEOs, do you think PAL will follow their direction? It was previously discussed that they usually follow the fleet strategy of CX.

[Solblanc]

frequentflier wrote

Arianespace wrote

JNC03 wrote

Did the BOD met before the financial report released right?

Of course. Otherwise there would be no report.Remember this too, they are the first to know and the last to admit.

The new orders are go. But they are not prepared to announce them yet as funding for these new acquisitions are not completed.

With the recent order of Cathay Pacific for A330 NEOs, do you think PAL will follow their direction? It was previously discussed that they usually follow the fleet strategy of CX.

There are some nuances to that order, though. First, Boeing is in no position to deliver that many 787s in the same timeframe. Second, China is veering away from the United States geopolitically, so there may be some pressure to avoid Boeing, even if Hong Kong is supposedly “free”. Next, with the growth of Chinese Airlines and Hong Kong becoming just another city, they might be more conservative as Hong Kong might not be able to sustain its long trajectory of growth.

[Evodesire]

Another. CX has 777-9X orders, hence, they dont need to order additional Boeings. PAL has none. They will be compelled to either choose between the 777X and the 787. With the way things are, there is a 95% chance they are going for the latter. So if they follow CX with the A330Ns, then we might see PAL possible going for the 787-9 only. It would be a toss-up between the A330N and the 787-10.

[JNC03]

CX has a different purpose for the A330neos

They have a lot of A350 for long haul already

A330neo will become regional workhorse for CX while PAL will deploy the A330 replacement to more longer flights like transpacific flights not just from MNL, they can revive mounting US flights via CEB. Obviously A330neo cannot easily do that due to the load of those flights.

A330neo has the chance to be used on regional and middle east flights only, due to its limiting factor requiring PAL to order another set of aircraft to fulfill that role. Buying a more versatile aircraft is needed to make sure that the aircraft will be a viable asset of PAL in the future.

That is where the A350 vs 787 comes in not the A330neo


We all know that having atleast one Boeing in the fleet of PAL is needed due to geopolitics

[JNC03]

PAL’s Achilles' heel has always been efficiency, and while the new group has been doing much better than the old group since the airline emerged from bankruptcy, some of the airline’s old ways of thinking appear to be seeping back into management’s commentary. The President and COO of PAL, Lucio Tan III (LT3), said that their growth strategy is to be efficient, but also full-service, and also the largest. Not all of these points are in conflict per se, but they can certainly be in tension depending on how this growth strategy is executed. Did PAL learn vital lessons from the pandemic and its unsurprising bankruptcy? The initial returns were promising from a business perspective, but shareholders have yet to be rewarded. How quickly will the parasites reattach themselves to the income stream? Will hubris and legacy concerns pilot major decisions, or data and cutthroat strategy? This is the first result that has given me flashbacks.


https://qa.philstar.com/business/stock-commentary/2024/08/12/2377317/philippine-airlines-q2-profit-p26b-down-67

[JNC03]

Philippine Airlines (PAL) will implement “a disciplined investment plan” in the near term, as it reported a steep decline in second-quarter profitability amid yield “pressures” and an rise in operating costs.

The Manila-based carrier’s operating profit for the three months ended 30 June stood at $64 million, down 64% year on year. Revenue for the quarter was down 4% to $787 million, “reflecting yield pressures brought about by the return of more capacity to the market”, says PAL.

The airline notes that its operating profit for the quarter was also “negatively impacted” by higher costs related to flying and maintenance activities.


https://www.flightglobal.com/airlines/pal-blames-yield-pressures-rising-costs-for-drop-in-q2-profit/159532.article
 

[Arianespace]

Dont you know the reason for "rise in operating cost", and "higher cost related to flying and maintenance activities" is attributed to flying old aircraft. Its basic economics. You could fairly claim that higher maintenance cost finally caught up with PAL.





Its the same reason why CEB does not keep old aircraft to its fleet. Higher flying and maintenance cost. As you can see, the optimum year is 12 years.

[JNC03]

Eaxactly flying those A330s and 77Ws

Plus A321ceo

In fact 5J will remove 4 of their A321ceo in the next 2 years due to expensive operating cost.

Thats why keeping 77Ws for a long time is not viable unless they dont have enough aircraft which is unlikely if they talked to lessors for new jets already

[JNC03]

One A321neo of PAL is currently chartered to bring the Philippine Olympic delegation back home