PAL’s bold moves in difficult times

The global aviation industry is barely clinging to life. In the aftermath of the Sept. 11 terrorist attacks in the US, three major carriers — Belgium’s Sabena, Canada 3000 and Swissair-have already declared bankruptcy. And in an attempt to stem a rising tide of red ink amid soaring costs and a sharp drop in passenger traffic, airlines all over the globe have laid off more than 100,000 workers and slashed import routes.

Almost every national carrier is in trouble as the worst turbulence in almost 50 years hit an industry that was already flying on a wing and a prayer.

But a few carriers are showing remarkable resilience. These airlines have pulled back the joystick to lift their planes high above the chaos employing mathematics that big, high-cost carriers simply could not afford.

One of these carriers is Philippine Airlines which is seizing the initiatives and building up the financial resources it needs to weather the crisis while most airlines are losing their heads. Though not entirely immune to the impact, PAL has continued to secure new routes by pressing ahead with its own expansion plans made even before terrorism dealt the airline industry a devastating blow.

New services

And just recently, PAL has restored presence to three key Asia-Pacific destinations-Shanghai, Bangkok and Melbourne. The move, thus far, has proved to be one wise business planning decision as all three maiden flights took off with decent loads, attesting to the loyalty and resilience of PAL’s core markets.

"Our major markets in the region remain vibrant and generally impervious to the slowdown, and that gives us the confidence to offer these new services." PAL president Avelino L. Zapanta said.

Then came another setback — American Airlines flight 587 crash in New York recently. Just what the already beleaguered aviation industry doesn’t need- an additional psychological damage to an already traumatized traveling public.

And once again, the mettle of the industry has been put to a test. Though uncertain about what the future holds with the recent turn of event, PAL is hopeful the new routes will be instrumental in neutralizing shortfalls in passenger loads over the medium to long term.

Shanghai

PAL is confident its Shanghai service will provide healthy returns in both the leisure and business markets. Shanghai, China’s largest city, for one, is emerging as an alternative to Hong Kong for Filipino merchants and retailers who ply a brisk trade shopping for merchandise abroad and then reselling them locally.

At the upper end of the business scale, there is potentially huge executive traffic between Manila and Shanghai, particularly with the latter’s rise as Asia’s newest financial powerhouse.

"PAL will aim to accelerate the booming traffic in Shanghai and in the process inject a much needed boost to the Philippine economy," Mr. Zapanta said.

Bangkok

The reintroduction of the Bangkok service, on the other hand, couldn’t come out at a more opportune time. Unlike other tourist routes, traffic on the Manila-Bangkok sector has seen steady, double-digit growth in recent years. Besides temple-hopping, Bangkok offers endless shopping. And through the years, the Thai capital emerged as a favorite destination for Filipino shoppers attracted by bargain goods and affordable holiday packages.

On the other hand, Thai nationals have rediscovered the Philippines’ diversity and richness of culture. Among the many tourist spots here, Baguio city has become a favorite destination for Thai tourists because of its cool, all-year round climate which is nowhere to be found in Thailand.

Melbourne

Meanwhile, Melbourne, PAL’s 20th international destination, is PAL’s attempt to expand its Australian operations following the growth of the Filipino migrant community in Victoria and Southern Australia.

"The resmption of PAL flights to Melbourne presents an excellent opportunity to build business, trade and tourism links between the Philippines and southern Australia," PAL executive vice president Heny So Uy said.

The new service also allows passengers traveling between the Philippines and Australia the option of stopping over in either or both Australian cities during their journey, at no extra cost.

Bold move

In an industry where cost-cutting has become a byword, PAL’s decision to add the three cities to its growing list of destination, is probably the most aggressive stance of any foreign airline following the severe damage to global aviation traffic from the Sept. 11 attacks.

But PAL is pinning its hopes on the future and the potential of these new destinations to help generate much needed revenues for the flag carrier. "While we may not achieve our full-year targets, we are confident we can still end the year profitable," Mr. Zapanta said.

Luring passengers back to flying has become an even more challenging task these days. Analysts are one in saying that air travel this holiday season is more likely than not to be off sharply, all the more deepening the gloom for airlines.

Staying aloft, however, does not mean ending service to any market. Staying in the game means airlines have to work hard to further improve performance and offer better and reliable service to the flying public. After all, that’s what they are here for.