PUERTO PRINCESA -Instead of passing on costs to customers, Philippine Airlines (PAL) has come up with measures to cope with rising fuel prices and still be able to expand its market share.
“For one, we try to look for ways to be efficient in fuel handling and flight operations, which eat up 40 to 50 percent of our expenses. Fuel entails about 35 percent of our expenses now, when it used to be labor,” said Rolando Estabillo, PAL vice president for corporate communication.
The price of crude oil rose past $136 a barrel in the world market yesterday.
“It’s very costly. It’s a big concern. The impact is quite heavy on us and on the airline industry,” Estabillo told Sun.Star Cebu last Saturday during the four-day PAL-organized familiarization tour of Palawan.
He cited International Air Transport Association director-general Giovanni Bisignani’s statement that the airline industry stands to lose about $6.1 billion if the price of oil reaches past $139 per barrel.
No freebies
“(So) we have to let go some freebies and follow the lead of other major airlines worldwide. Surcharges are not enough to recoup the expenses on fuel,” Estabillo said.
Jun Canton, PAL-Cebu sales and services manager, noted that an international airline based in the US have imposed fees on checked-in luggage, respectively.
“Some airlines are even charging per seat. If it’s a window seat, there is a certain premium,” he said.
PAL, however, has not yet resorted to similar strategies but it will start on July 1 its planned pre-baggage allowance reduction for its Trans-Pacific routes, including those to the United States and Canada.
Reducing pre-baggage allowance from about 70 pounds to 50 pounds per baggage will help lighten the plane and lessen the aircraft’s fuel consumption, said to Estabillo.
Fuel savings
“For every ton that we do not carry, we save more than 140 liters of fuel. If computed on an annual basis, that is already very significant,” he said.
Unlike other airlines that cut down routes to save on fuel, PAL is “conscious of the configuration that they use in each route by rationalizing the deployment of their aircraft,” he said.
Apart from increasing its current 60-percent market share in the local airline industry by reviving old routes that were canceled due to the 1997 Asian financial crisis and labor disputes, PAL’s budget unit—PAL Express—is targeted to help cut the company’s fuel costs.
PAL Express was launched last month and now has more than 20 domestic routes.
“It has always been on our drawing board to launch PAL Express after the company got out of rehabilitation. We’re still building it up. There is a lot of promise in it. But we did not plan nor anticipate the rising prices of fuel,” said Canton.
Estabillo said PAL Express will focus on Cebu, being the country’s center that is most accessible to and by other destinations.
“Rep. Abraham Mitra (Palawan, 2nd district) is even proposing to us to triangulate flights, such as from Cebu to Iloilo to Puerto Princesa, because there is a significant demand for it,” he said.
PAL management plans to open Cebu-Iloilo and Cebu-Davao routes with PAL Express by next month. (NRC)
