Analysis of Business Management at Philippine Airlines Free Essay Example

Philippine Airlines, Inc. (abbreviated as PAL and also known historically as Philippine Air Lines) operating as Philippine Airlines, is a flag carrier of the Philippines. Headquartered at the Philippine National Bank Financial Center in Pasay City,[2][3] the airline was founded in 1941 and is the first and oldest commercial airline in Asia operating under its original name. 4] Out of its hubs at Ninoy Aquino International Airport of Manila and Mactan-Cebu International Airport of Cebu City, Philippine Airlines serves twenty destinations in the Philippines and 26 destinations in Southeast Asia, South Asia, East Asia, Oceania and North America.

[5] Formerly one of the largest Asian airlines, PAL was severely affected by the 1997 Asian Financial Crisis.

In one of the Philippines’ biggest corporate failures, PAL was forced to downsize its international operations by completely cutting flights to Europe and Middle East, cutting virtually all domestic flights except routes operated from Manila, reducing the size of its fleet, and laying off thousands of employees. The airline was placed under receivership in 1998, and gradually restored operations to many destinations.

PAL exited receivership in 2007.

Philippine Aerial Taxi Company On November 14, 1935 Philippine Congress approved the franchise of Philippine Aerial Taxi Company, Incorporated (PATCO) to provide mail, cargo and passenger service particularly in the island of Luzon. The company then had scheduled Manila-Baguio and Manila-Paracale flights. [6] The company became dormant for six years on its scheduled passenger operation under its assigned routes. [4] Philippine Air Lines On February 26, 1941 Philippine Air Lines, Inc. y a group of businessmen led by Andres Soriano – hailed as one of the Philippines’ leading industrialists at the time,[7] who served as general manager, and former Senator Ramon Fernandez, who served as chairman and president.

Philippine Air Lines, Inc. acquired the franchise of Philippine Aerial Taxi Company, Incorporated, thus the birth of Philippine Airlines. The airline’s first flight took place on March 15, 1941 with a single Beech craft Model 18 NPC-54 on daily services between Manila (from Nielson Field) and Baguio. [7] On July 22 the airline cquired the franchise of the Philippine Aerial Taxi Company. Government investment in September paved the way for its nationalization. Entry of San Miguel Corporation (2012-present) On April 4, 2012, San Miguel Corporation bought a 49-percent stake in Philippine Airlines for $500 million as part of a strategy to move away from its beer and food businesses. San Miguel, one of the Philippines’ biggest conglomerates, said it planned to help modernise PAL’s aging fleet and rejuvenate Asia’s oldest commercial airline, which has lost its status as the nation’s top carrier in recent years.

San Miguel president Ramon Ang said the $500-million investment had bought his company a 49-percent stake in PAL and its low-cost offshoot, Airphil Express (AirPhil). “The new investment will allow the two airlines to strengthen operations and stay competitive with the implementation of PAL and AirPhil’s fleet modernization,” said a joint statement from PAL chairman Lucio Tan and San Miguel. Ang also stated that they are planning to join a global airline alliance. Billionaire Tan, the country’s second-wealthiest man, is PAL’s controlling shareholder. 34] DestinationsPhilippine Airlines operates two hubs in Manila and Cebu. Virtually all PAL routes are operated from its hubs, with the majority of routes operating from Manila.

Domestically, PAL flies to major Philippine cities from Manila and Cebu. It flies between Manila, and Cebu to a lesser extent, and cities in Asia-Pacific, the western United States, Canada and Australia. Many destinations served by PAL, especially destinations in the United States, Canada, Australia, Japan and Hong Kong, are areas with large overseas Filipino populations. citation needed] PAL currently operates three non-hub routes, Bangkok-Delhi, Singapore-Jakarta and Sydney-Melbourne. In the past, PAL operated a number of domestic and international non-hub routes (most notably Iloilo-General Santos, Vancouver-New York, Vancouver-Las Vegas and Zurich-Paris), as well as non-stop services to destinations in Europe and extensive domestic operations; those services were discontinued in light of the Asian financial crisis.

Some of its previous domestic operations, namely, service from Manila to Naga, Tuguegarao, and more recently, Ozamiz have been taken over by Airphil Express, while services to others were stopped altogether. In addition, services to Legazpi City, Puerto Princesa, Butuan, Cagayan de Oro, Cotabato City, Dipolog, Zamboanga City, Dumaguete and Tacloban, while retaining the “PR” flight codes, have been operated by Airphil Express on behalf of PAL since 28 October 2012.

Service to the Middle East continued after the Asian financial crisis; however, that was also eventually discontinued due to high fuel prices and an oversupply of seats, as well as intense competition from Middle Eastern carriers. PAL discontinued service toRiyadh, its last Middle Eastern destination, on 2 March 2006, and re-introduced flights again in 2010 but discontinued once again in April 2011. PAL maintains code-share agreements with carriers based in that region, specifically with Emirates to Dubai, Etihad to Abu Dhabi, Gulf Air to Bahrain, and Qatar Airways to Doha.

After exiting from receivership, PAL has expressed interest in increasing its frequencies to Canada such as an expansion to Toronto and Montreal, introducing flights to Dhaka, Guangzhou and Mumbai, and expanding its presence in the United States by commencing service to Saipan, Seattle, Dallas, San Diego, and Houston, as well as restoring service to Chicago and New York,[51] and restoring service to India and Europe,[52][53] as well as the Middle East. [54] The downgrading of the Philippines’ aviation status by the Federal Aviation Administration however, has prevented PAL from expanding its coverage in the United States.

PAL commenced Manila to Toronto service effective November 30, 2012 with a stop-over in Vancouver(YVR) on the Toronto-to-Manila leg. On 15 October 2010, Philippine Airlines announced that its Manila–Brisbane services will be suspended indefinitely as of October 31, with Melbourne-bound services reduced from 5 flights a week to 3. The company cited marketing considerations for the suspension of Brisbane services. [55] However, more recently, the airline has since recommenced a daily frequency to Australia: Sydney is served four days a week and Melbourne three using a B777-300ER plane.

The former triangular routing that served both Australian cities on one flight was discontinued in favour of direct flights. The carrier re-introduced flights to New Delhi after decades of absence in the Indian subcontinent; there were initially three direct flights while three other flights stopped at Bangkok’s Suvarnabhumi Airport. [56]However, as of 18 March 2012, Philippine Airlines discontinued it direct flight to New Delhi and retained the thrice-weekly New Delhi via Bangkok flights.

On 28 April 2012, Philippine Airlines re-established its direct air links between Manila and Bali, Indonesia’s prime holiday destination, via twice-weekly flights departing Manila every Wednesday and Saturday. It is the airline’s second destination in Indonesia, following Jakarta, the country’s capital, where the flag carrier flies five times a week direct from Manila and four times a week via Singapore. [57] On 23 July 2012, PAL announced that it will launch non-stop flights to Toronto on November 30, 2012. [58] The Philippines’ flag carrier is also planning to launch direct flights from Manila to New York and some key cities in Europe.

However, PAL is being prevented since the FAA made PH under category 2, which prevents PAL to expand its U. S. network, and blacklisting PH aviation by EU, which stops Philippine Airlines in restoring its previous European routes. [59] Philippine Airlines (PAL) has filed with the Civil Aeronautics Board (CAB) permit to start flight to Moscow’s Domodedovo Airport in Russia Capital starting September 2013, using the high-gross variant of Airbus A330-300 aircraft 4 times weekly. Moscow flight leaves Manila on Tuesdays, Thursdays, Fridays, and Sundays, with Turkey flight leaving Monday, Wednesday, and Saturday.

It is the second destination in Europe to be flown by PAL after announcing flights to Turkey beginning August 5. Both destinations are outside the European Union. PAL is also slated to fly daily services on the Manila-Kuwait route by April 2013 usingAirbus A330-300, while daily flights to Darwin, extending 3 mornings a week to Brisbane and 4 mornings a week to Perth commence on 1 June 2013 using Airbus A320s. [60] Philippine Airlines soon to launch flights to Sao Paulo, Brazil with stopovers on Los Angeles. [61]

A codeshare agreement, sometimes simply codeshare, is an aviation business arrangement where two or more airlines share the same flight. A seat can be purchased on one airline but is actually operated by a cooperating airline under a different flight number or code. The term “code” refers to the identifier used in flight schedule, generally the two-character IATA airline designator code and flight number. Thus, XX123, flight 123 operated by the airline XX, might also be sold by airline YY as YY456 and by ZZ as ZZ9876.

It allows greater access to cities through a given airline’s network without aving to offer extra flights, and makes connections simpler by allowing single bookings across multiple planes. Most major airlines today have code sharing partnerships with other airlines and code sharing is a key feature of the major airline alliances. Under a code sharing agreement, the airline that actually operates the flight (the one providing the plane, the crew and the ground handling services) is called the operating carrier. The company or companies that sell tickets for that flight but do not actually operate it are called marketing carriers.