Airlines in the Philippines

[Arianespace]

Eurest wrote

PR though had the problem of too much frames, which necessitated the deferral of more A321s, much to the chagrin on the French Ambassador; the reopening of CEB as a hub, and more aggressive subleasing of A320 frames

I understand the frustration but from the viewpoint of SMC its actually logical until the returns wasn't good enough to justify expansion plans at that time and then growing yet again the investment of SMC that had it not stopped it would be hard for the LT Group to recover PAL from its erstwhile owner.

While SMC is willing to complete the transformation LTG isn't prepared to gamble it away. And while they vastly profited now, it would have been a windfall had earlier plans for the airline materialized.

The plan was good on paper with the A321 launching multiple international points in Cebu, Davao, Puerto Princesa, and Kalibo while upgauging MNL hub, and a foray to ASEAN market at the heart of Angkor Wat. A couple of A320s were earmarked for the Cambodian subsidiary which didn't flew due to regulatory issues so it fizzles out. Thus, the "raison d'etre" for some of the frames ceased to exists, yet foresaw potential for growth necessating deferral to some of them. As can be seen from the graphs earlier, fleet planners were correct on that assumption.

Whats been realized so far is the hub in Kalibo and Cebu. What I love to see is finding the plan for DVO implemented. I saw at least 5 international points listed there.

[romantic_guy08]

Arianespace wrote

Eurest wrote

PR though had the problem of too much frames, which necessitated the deferral of more A321s, much to the chagrin on the French Ambassador; the reopening of CEB as a hub, and more aggressive subleasing of A320 frames

I understand the frustration but from the viewpoint of SMC its actually logical until the returns wasn't good enough to justify expansion plans at that time and then growing yet again the investment of SMC that had it not stopped it would be hard for the LT Group to recover PAL from its erstwhile owner.

While SMC is willing to complete the transformation LTG isn't prepared to gamble it away. And while they vastly profited now, it would have been a windfall had earlier plans for the airline materialized.

The plan was good on paper with the A321 launching multiple international points in Cebu, Davao, Puerto Princesa, and Kalibo while upgauging MNL hub, and a foray to ASEAN market at the heart of Angkor Wat. A couple of A320s were earmarked for the Cambodian subsidiary which didn't flew due to regulatory issues so it fizzles out. Thus, the "raison d'etre" for some of the frames ceased to exists, yet foresaw potential for growth necessating deferral to some of them. As can be seen from the graphs earlier, fleet planners were correct on that assumption.

Whats been realized so far is the hub in Kalibo and Cebu. What I love to see is finding the plan for DVO implemented. I saw at least 5 international points listed there.

With 2P recently retiring 2 A320s (3227/8), are we going to see more A320s from PR being transferred to 2P and PAL operating an all A321 fleet? Or will they retain some those A320s? and will 2P receive some A321s as well?

[Arianespace]

romantic_guy08 wrote

With 2P recently retiring 2 A320s (3227/8), are we going to see more A320s from PR being transferred to 2P and PAL operating an all A321 fleet? Or will they retain some those A320s? and will 2P receive some A321s as well?

I went to 3 different places in Visayas and Mindanao this month and the last, in Business Class with this 86xx coded plane instead of the usual 83xx. I also went to CGY with 99xx A321. By the way the J seat was not by choice. Its the only one available.



I made a chronicle on this, which included the plan for monoclass A330 era SMC, I think on the erstwhile other while the forum has zero clue on 2Ps transformation under the nose of its non-resident, non-traveling, and non-flying moderator.

Now, you can take a cue from there. Note that its not all A321s, there are still A320s. The reason for slow introduction of A321 is airport infrastructure to some 2P routes which are barely enough to handle a bigger A320s. Exceptions are TAC, PPS, BXU, CGY, DPL, and ZAM which can accommodate the A321s.

[tigz]

Hmmm, in the eyes of the everyday traveler Air Phils have been banished. So 2P is still the operator of most, if not all domestic routes while mainstream PAL is international? Apart from the slots inherited from the erstwhile, what is PAL gaining from this? Liquidation is much easier just in case?
 On the A350, I'm thinking Airbus would have given PAL execs and the purchase more perks just so to defray an announcement and make it an opening news for 2016 to airbus delight!

[Arianespace]

Since when did Pal Express ever had business class seats?

I tell you this is entirely a different strategy being implemented now by PR management. Desires of being a 5 star airline was nowhere near the SMC policy direction.

Now to your enquiry, well, its just asking the same question as what will Singapore Airlines gain from the presence of Silk Air, Scoot, and Tigerairways?

On the second question, its more on the financing issues, considering the variant type is more expensive, apparently due to the introduction of a newer variant primarily intended for nonstop east coast operations. So they must be serious about adding more points east in the near term. Meanwhile, the 6x6 is making more sense by the day, although the company plans to do only 8 at the moment.

And if my mole is right, the third one is gonna be a lot different from the first two.

[Eurest]

Subsidiaries will have a lower cost base than the mainline company as the contracts for crew will be for regional flying and you have them rostered on a more consistent basis as opposed to long-haul crews which usually get 3-4 days off at that long-haul point, plus allowances, etc

NH and Air Japan is a good example. Japan has fairly high labour costs, and as such, mainline NH has one of the highest cost base globally.
So they have subsidiaries like Air Japan fly the shorter routes like MNL, so they can offer competitive fares and undercut operators like DL, who themselves enjoy a lower cost base than mainline NH in Asia as DL have cabin crew strictly for intra-Asia flying
This is the advantage of the ME3 as their cabin crew are mostly expatriates, who will enjoy compensation higher than their local carriers in their origin country, but do not compare to the European, North American and Japanese crew compensation. The ME3 basically have the same cost base as SQ or NH's subsidiaries but they're flying long-haul
EK and EY would probably love to have the same frequency that CX enjoys in MNL
You have a more than 90% LF of your 385 Y seats, meaning you can spread the entire cost of your flight to at the very least 346 Y tickets. Even if you just have 6 J pax on your flight,the rear has already absorbed the costs. But the reality is both EK and EY will at the very least have a minimum of 12 J pax in their flights.

As for PR, you might have a PR flight but crew is 2P, which lessens costs to better compete with 5J. Then you have a wholly 2P flight which use a 2P aircraft and 2P crews

[romantic_guy08]

Arianespace wrote

romantic_guy08 wrote

With 2P recently retiring 2 A320s (3227/8), are we going to see more A320s from PR being transferred to 2P and PAL operating an all A321 fleet? Or will they retain some those A320s? and will 2P receive some A321s as well?

I went to 3 different places in Visayas and Mindanao this month and the last, in Business Class with this 86xx coded plane instead of the usual 83xx. I also went to CGY with 99xx A321. By the way the J seat was not by choice. Its the only one available.



I made a chronicle on this, which included the plan for monoclass A330 era SMC, I think on the erstwhile other while the forum has zero clue on 2Ps transformation under the nose of its non-resident, non-traveling, and non-flying moderator.

Now, you can take a cue from there. Note that its not all A321s, there are still A320s. The reason for slow introduction of A321 is airport infrastructure to some 2P routes which are barely enough to handle a bigger A320s. Exceptions are TAC, PPS, BXU, CGY, DPL, and ZAM which can accommodate the A321s.

They're selling those J seats in the 86XX series as Y+...

Same thing happens when PR subs for 2P...

[tigz]

Well said, but I guess my point is would it have benefitted PAL if they kept Air Philippines as it is as a low cost branding going head to head with 5j on the local sector. Right now, it appears like a complex crew management scenario. Sounds like there's a high end cabin crew and low pay level crew manning same airline service!

[seven13]

Are there any plans for PR to foray into connecting/transit traffic? I know that the current state of T2 is out of shape for such plans but can CEB, once T2, is finished, be a transit hub. Pretty much what BR is getting into now, soon adding a RON (3rd flight) service to MNL. I'm sure someone from current management have thought about that but I wonder it's priority.

[tigz]

Cebu is promising and the driving factor are the resort hotes within 10mins from the airport. It is fairly convenient for a business traveller doing quick RandR before heading to final destination. With Mactans T2 envisioned to be the countries premier resort gateway, there is compelling reasons for airlines to sync their schedules; and that hoping tourist infrastructure will be ripe to support it least airlines will be skeptical on the numbers. Myself prefer Cebu as my entry, spend few days at Shangri-la before heading south to family. Same route going back to the east coast. Its a pleasure now that LA route has opened!

[Arianespace]

romantic_guy08 wrote

They're selling those J seats in the 86XX series as Y+...

Same thing happens when PR subs for 2P...

Could be. You can't really tell the difference except that you are buying the equivalent of two seats for the price of one. I was also accommodated on Y+ before last year and was seating on the second row with the middle seat vacant. The only difference then was that the plane was all mono-class.

tigz wrote

Well said, but I guess my point is would it have benefited PAL if they kept Air Philippines as it is as a low cost branding going head to head with 5j on the local sector. Right now, it appears like a complex crew management scenario. Sounds like there's a high end cabin crew and low pay level crew manning same airline service!

Its not complex at all. Eurest pretty much explains it. We have discussed this before in the other forum but as a continuation of that discussion, PAL Express flight and cabin crews are employed by Air Philippines Corporation, a different company. They are covered by separate contracts and have different bargaining positions. They cannot claim to be part of the other. That is the very concept of corporate structure.

Please note that PAL Express operated by Philippine Airlines was a different airline than PAL Express today as they are using the licenses of PAL and its corporate muscle.

When PALEX folded up to become another company, all the flight and cabin crews were terminated and offered the same job in another company, and all of them signed new contracts, while managers headed separate ways.

Those who were not happy at 2P on the moved by PR migrated to CEB and AAP, the erstwhile Zest, while its managers went with other airlines. Brian Hogan of 2P is one classic example. He was instrumental in making GAP what it was, as it is with Garry R. Kingshott of 5J. But great accomplishment succumbs and yields to greater plans proposed by SMC and its CEA Niel Raymond Mills who made PAL Express today. If you fancy Easy Jet, Fly Dubai and Spice Jet, he is that man responsible for today's PR finances. After following what he does, JJB did the cue and takes it from there. We call it transfer of brain technology.

And now you see this business class seat/ Y+ or whatever it is sold at 2P.

By the way, to sum it up, its called SYNERGY.

   

[Arianespace]

seven13 wrote

Are there any plans for PR to foray into connecting/transit traffic? I know that the current state of T2 is out of shape for such plans but can CEB, once T2, is finished, be a transit hub. Pretty much what BR is getting into now, soon adding a RON (3rd flight) service to MNL. I'm sure someone from current management have thought about that but I wonder it's priority.

Ahh, transit hub. Another worthy discussion in the other forum.

What I can say to this is just reiterate what I said previously. If you know what happened to the early 80's then it pretty sums up everything about the demise of the hub system.

But don't worry, we are heading in that direction again.  

[Solblanc]

The Cathay group just announced the rebranding of KA into Cathay Dragon.

It isn't a bad livery, I suppose.

I'm curious, though, about KA's presence in Manila. It is difficult to see the need for KA to fly to MNL when CX is already heavily entrenched there.

Likewise, it's also very odd to see KA operating from a different terminal from CX. When would their MNL operations get any kind of synergy?

[Eurest]

You're correct, 2P as AirPhilExpress was doing quite well and if it had been left alone it would have been quite a force.
It's a stark contrast to say, ThaiSmile, which struggled as an LCC subsidiary which necessitated its transformation to its current state.

The industry regards 2P's transformation into PAL Express as a necessary sacrifice to revamp PAL's domestic ops
Mainline domestic was such a drag on the financials that SMC needed 2P to take over routes it was hemorrhaging money on
In the end it was better for mainline to sort of absorb its subsidiary that was not only competing against it, but was actually performing better

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Rebranding subsidiaries seems to be en vogue now with such examples like Cathay Dragon.
They are trying to improve the image of the subsidiary by aligning it with the mainline but keeping a sense of difference as an excuse in case shortcomings pop up
There's also talk of a massive shake-up with SQ as well aligning Silk closer to mainline and operating for SQ as replacement for certain frequencies that are too big for mainline or as add'l frequencies to support mainline.
Scoot and Tiger will also be folded into one if SQ succeeds in the takeover of Tiger so as to gain Scoot some flexibility to operate  smaller aircraft in less dense routes or to add frequency or to upsize ac in routes Tiger could use the extra seats. They see the flexibility 5J enjoys and agrees the pros outweigh the cons of having multiple fleet types and its effect in the balance sheet

Asian carriers have taken notice how both PH carriers have managed to improve financials when theirs were floundering and seem to be taking cues from past moves of PR and 5J

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Speaking of subsidiaries, JAL's LCC with Qantas, Jetstar Japan starting MNL service from NRT and NGO soon with midnight arrivals and departures adding more seats between PH-JP is an interesting move
JAL is essentially expanding PH ops by having its LCC operate, essentially adding a 3rd NRT frequency but adding NGO as well.
Once JL completes reconfiguring their 773s from domestic 500 seaters to int'l, MNL would be a sure bet to get them further increasing their share
PH-JP could be as big as PH-KR in a few years

[seven13]

There are still some domestic routes operated by PR with the likes of CEB, DVO, GES, PPS (to connect to TPE), KLO (to connect to ICN) and from time to time, BCD and CGY. Currently, there's BCD-ICN charter that will run until Feb, I think. If I'm not mistaken, only CEB and DVO have J, Y+ and Y service in domestic meanwhile, GES gets Y+ and Y service only as it is operated by the mono A330.

[seven13]

Add KIX to list of GK's new MNL service.

2P will be starting international service once again with SPN on 2x week basis. I wonder if PR will codeshare on this flight and will 2P offer JCL service on this route? Technically, they have the 86XX series A320 from PR so aircraft configuration shouldn't be a problem.

[Solblanc]

Eurest wrote

Asian carriers have taken notice how both PH carriers have managed to improve financials when theirs were floundering and seem to be taking cues from past moves of PR and 5J

Yeah, some in the other forum refuse to see that PH carriers have sound fiscal fundamentals compared to everyone else in the region and will not rest until there will be a PTV on a seat they will never fly in.

[romantic_guy08]

Arianespace wrote

romantic_guy08 wrote

With 2P recently retiring 2 A320s (3227/8), are we going to see more A320s from PR being transferred to 2P and PAL operating an all A321 fleet? Or will they retain some those A320s? and will 2P receive some A321s as well?

I went to 3 different places in Visayas and Mindanao this month and the last, in Business Class with this 86xx coded plane instead of the usual 83xx. I also went to CGY with 99xx A321. By the way the J seat was not by choice. Its the only one available.

Yes those J seats on the 86XX series are being sold as Y+... have taken them several times as well... service is Y+ and thats how they classify those seats... might cost PAL a lot of money if they reconfigured to monoclass so thats why they retain those seats.

[Eurest]

Thanks for the reminder, forgot about KIX. The schedule's not out yet is it?

Saipan has both 2P and PR flight numbers so codeshare it is

Anyways what's this I'm hearing of PR serving Ibaraki for charters to secondary PH cities?
I've not come across the feasibility study for this service

PH is now Japan's second largest tourist source after CH? I wonder how HK or SG reacts to this news

[fd20]

I don't think we're the second largest tourist market--it's just that we are the SECOND FASTEST GROWING tourist market after China. Japan welcomed more than 600,000 tourists from Japan last year while there were just around 200,000 visitors from the Philippines.