Wednesday, January 03, 2007 PAL optimistic about 2007 with re-fleeting program
After taking a bruising from external challenges, especially volatile jet fuel prices, in 2006, Philippine Airlines (PAL) prepares to enter the new year with fresh hope that recently launched aircraft and product enhancements will strengthen its competitive position in 2007.
“It was a challenging year,” PAL president Jaime Bautista said.
From 2005 to 2006, oil price spikes has been the flag carrier’s biggest challenge as prices hit record-high levels.
The benchmark Mean of Platts Singapore price opened the year in the $70-per-barrel range, shot up to the high $80-to-$90 range in July and August, before dropping back the mid-$70s band again as 2006 ended.
As a result, fuel represented a bigger portion of PAL’s operating expenses in 2006 than in previous years.
To adjust to the situation, PAL implemented a fuel conservation program that yielded initial annual savings of about $2 million, an amount expected to grow over time.
PAL also embarked on a major cost-reduction and efficiency program encompassing all aspects of its operations.
Despite this and other challenges, the airline is expected to conclude its current fiscal year, which ends in March 2007, with a respectable net income. PAL entered rehabilitation in 1999.
PAL posted consecutive annual profits of $17.6 million in fiscal 2004 to 2005 and $28.7 million in 2005-2006.
The flag carrier is entering 2007 on a roll, having just kick-started its ambitious fleet modernization program in late 2006. It started with the single-aisle component last Oct. 20, unveiling the first of up to 20 brand-new Airbus A320-family aircraft.
Two more aircraft has joined the fleet and PAL is scheduled to take delivery of eight jets this year. By the time the major part of the re-fleeting is completed in December 2008, PAL will be operating one of the youngest narrow-body fleets in the world.
The upgrading of the wide-body fleet is not far behind. Last Dec. 7, PAL announced the acquisition of up to six brand-new Boeing 777-300 extended range aircraft over the next six years. The first deliveries will be in 2009.
The high-technology B777-300ER is the world’s largest long-range twin-engine jetliner and is an ideal complement to the Boeing 747-400, PAL’s long-range flagship, on the vital trans-Pacific routes to Hawaii, the US West Coast and Canada. “The whole industry is poised for growth,” said Bautista.
For 2007, he said PAL will “keep (its) eyes focused on the bottom line.”
“Also, we should not lose sight of the top line — revenues, traffic and load factors,” he said. (PR)
