PAL unveils new fleet addition

Philippine Airlines (PAL) unveiled yesterday the newest addition to its fleet, an Airbus A319-100 — the first of the 20 single-aisle passenger jets to be acquired by the flag carrier for $840 million for domestic and regional flights.

President Arroyo was the guest of honor at the unveiling rites held at the hangar of the Lufthansa Technik Philippines on Andrews Avenue in Pasay City.

Mrs. Arroyo poured champagne on the nose of the newly delivered A319-100, reminiscent of a ceremony 44 years ago when her mother, then First Lady Evangelina Macapagal, poured champagne on the nose of PAL’s first Douglas DC-8 jet during its inauguration.

"Despite challenges, we are bullish about our country’s growth prospects and stability. This positive outlook prompted us to upgrade PAL’s fleet," PAL chairman and chief executive officer Lucio Tan said in a speech.

Tan also described the flag carrier’s expansion, particularly the acquisition of new aircraft, as a "calculated step.’’ PAL is Asia’s first commercial airline.

He said his confidence is anchored on the 4.8 percent projected growth in passenger traffic this year, and on the sterling 10 percent increase in global airlines industry revenues in the last three years.

"And now that world fuel prices are stabilizing, we know we made the right decision at boldly going forward,’’ Tan said.

Tan said PAL is eyeing flights to Seattle, Washington and San Diego, California as part of its US expansion.

PAL flies daily to Los Angeles and San Francisco, both in California; and four-times-a-week between Manila-Vancouver, Canada-Las Vegas, Nevada; and thrice weekly between Manila and Honolulu.

The airline discontinued its flights to Europe in 1998 after the Asian financial crisis and a crippling labor problem pushed it to near bankruptcy.

Jaime Bautista, PAL president, said they might pursue further US expansion and resumption of Europe services. PAL, he said, is also eyeing India and China.

"Every year, we review the feasibility of operating to Europe. However, last year, our study showed that we will lose because of too much capacity (competition)," he said.

Bautista pointed out that they were still choosing between Airbus and Boeing for its future aircraft acquisition.

"We’re still evaluating whether it will be Airbus or Boeing," he said.

"By 2008 or 2009, we can start the expansion. Because it takes two years to build an aircraft," Bautista explained.

He said that they will source funds to buy the aircraft from normal financing schemes.

The A319-100 rolled out yesterday is part of a 20-aircraft, $840-million package comprising 14 A320 aircraft. Deliveries will be in the next six years.

In addition, PAL will lease two brand-new A320s and four A319s from GE Commercial Aviation Services, the world’s largest aircraft lessor.

The A319-100 and A320 family of single-aisle jets are mainly used by PAL to service its domestic operations and some Asian destinations such as the Manila to Beijing, China route which it started last year.

The new jets will enable PAL to offer business-class service to all of its 19 domestic points. Previously, such service is offered only in major routes like Cebu, Davao, Puerto Princesa and General Santos City.

If the project pushes through, PAL will be the sole carrier to offer business-class service in the domestic market.

"Through this modern fleet, we hope to assist in fostering economic growth in the countryside. Just as well, it will help improve the air bridges between the Philippines and neighboring countries," Tan said. — With Paolo Romero, AFP, AP