Philippine Airlines

Philippine Airlines

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IATA ICAO Callsign PR PAL PHILIPPINE
Founded	November 14, 1935 (1935-11-14) (as Philippine Aerial Taxi Company) February 26, 1941 (1941-02-26) (as Philippine Air Lines)
Commenced operations	March 15, 1941 (1941-03-15)
Hubs	Ninoy Aquino International Airport
Secondary hubs	Mactan-Cebu International Airport Clark International Airport
Focus cities	Kalibo International Airport
Frequent-flyer program	Mabuhay Miles
Subsidiaries	PAL Express
Fleet size	55 (excluding subsidiaries), 78 (including subsidaries) as of January 2, 2017
Destinations	53 as of January 17, 2017
Company slogan	The Heart of the Filipino
Parent company	PAL Holdings, Inc.
Headquarters	PNB Financial Center, Macapagal Boulevard, Bay City, Pasay, Philippines
Key people	Lucio C. Tan, Sr. (Chairman and CEO) Jaime J. Bautista (President and COO) Marianne C. Raymundo (Chief Financial Officer)
Revenue	PHP27.9 billion (US$627 million)(1Q2015)
Net income	PHP3.7 billion (US$85 million)(1Q2015)
Employees	approx. 5,000
Website	www.philippineairlines.com

Philippine Airlines (PAL), a trade name of PAL Holdings, Inc. (PSE: PAL), also known historically (until 1970) as Philippine Air Lines, is the flag carrier of the Philippines. Headquartered at the PNB Financial Center in Pasay City, the airline was founded in 1941 and is the first and oldest commercial airline in Asia operating under its original name. Out of its hubs at Ninoy Aquino International Airport of Manila, Clark International Airport of Angeles and Mactan-Cebu International Airport of Cebu, Philippine Airlines serves 31 destinations in the Philippines and 41 overseas destinations in Southeast Asia, East Asia, Middle East, Oceania, North America and Europe.

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. After PAL's exit from receivership in 2007, PAL embarked on a frequent revamp of management. However, PAL's vision to re-establish itself as one of Asia's premier carriers, is still the matter of greatest importance. Philippine Airlines operates a mixed fleet of Airbus and Boeing aircraft with Airbus A320, Airbus A321, Airbus A330, Airbus A340, and Boeing 777-300ER.

History

Beginnings (1935–1959)

Philippine Aerial Taxi Company

On November 14, 1935, the 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. The company became dormant for six years on its scheduled passenger operation under its assigned routes.

Philippine Air Lines

On February 26, 1941, Philippine Air Lines, Inc., led by a group of businessmen headed by Andrés Soriano, Sr., hailed as one of the Philippines' leading industrialists at the time, who served as general manager, and former Senator Ramon Fernandez, who served as chairman and president, 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 Beechcraft Model 18 NPC-54 on daily services between Manila (from Nielson Field) and Baguio. Government investment in September paved the way for its nationalization.

Revenue Passenger-Kilometers, scheduled flights only, in millions

Year	Traffic
1957	160
1960	286
1965	729
1969	1330
1971	1302
1975	2842
1980	6033

Source: IATA World Air Transport Statistics

PAL services were interrupted during World War II, which lasted in the Philippines from late 1941 to 1945. Upon the outbreak of the Pacific War on December 8, 1941 the two Model 18s and their pilots were pressed into military service. They were used to evacuate American fighter pilots to Australia until one was shot down over Mindanao and the other was destroyed on the ground in an air raid in Surabaya, Indonesia.

On February 15, 1946, PAL resumed operations after a five-year hiatus with service to 15 domestic points with five Douglas DC-3s and a payroll of 108 names. Philippine Airlines returned to its original home, the Nielson Field in Makati. The airport, heavily damaged during the war, was refurbished and modernized by PAL at a cost of over one million pesos, quickly becoming the official port of entry for air passengers into the Philippines. The airport was operated by Manila International Air Terminal, Inc., a wholly owned PAL subsidiary.

Philippine Airlines Vickers Viscount at Kai Tak Airport in 1961

On July 31, 1946, PAL became the first Asian airline to cross the Pacific Ocean when a chartered Douglas DC-4 ferried 40 American servicemen to Oakland, California from Nielson Airport with stops in Guam, Wake Island, Johnston Atoll and Honolulu. A regular service between Manila and San Francisco started in December 1946. During this time, the airline was designated as the country’s flag carrier.

PAL commenced service to Europe in 1947 with the acquisition of more Douglas DC-4s. By 1948, PAL had absorbed the only other scheduled airlines in the Philippines, Far Eastern Air Transport and Commercial Air Lines. Following the government's decision to convert Nichols Field in Pasay City, the site of a former U.S. Air Force base, into a new international airport for Manila, PAL was required to move its base of operations and passenger terminal there from Nielsen Airport. The transfer was accomplished over a five-month period from January 31 to June 28, 1948, with PAL investing an additional P600,000 in ground installations and improvements to Nichols Field.

In 1951 PAL leased a DC-3 named "Kinsei" to Japan Airlines, which led to the founding of the country's own national airline. In March 1954, the Philippine government suspended all flights to Europe, Japan and the United States, only to resume five years later. In three years PAL started services to Hong Kong, Bangkok, and Taipei using Convair 340s that would later be replaced by the Vickers Viscount 784, which brought the airline into the turboprop age. On March 15, 1941, a Beech Model 18 twin engine monoplane left Manila for Baguio. The aircraft with registry NPC-54 carried two pilots and five passengers on its maiden flight. The five passengers were also the founders of PAL – Philippine Air Lines: Andres Soriano, Ramon Fenandez, Juan Elizalde, John R. Schultz and Ernesto Von Kaufmann. On October 23, 1941, John R. Schultz was elected by the Board of Directors as Treasurer of Philippine Air Lines. On December 8, 1941, war broke out. PAL ceased operations but shortly resumed operations. In 1949, President Quirino became the first Filipino Chief executive to travel by air over the Pacific.

First expansion and modernization (1960–1989)

A Philippine Airlines DC-10 in Zurich. The airline operated 6 DC-10s, which consisted of five −30 series and one −30CF series.

In the 1960s, PAL entered the jet age, initially with a lone Boeing 707, later replaced with Douglas DC-8 aircraft leased from KLM Royal Dutch Airlines., used for long-haul international flights to Europe and the United States. The DC-3 remained the mainstay of domestic services as it expanded to a total of 72 points as airports were improved or opened, but most of the airline's rural air service was later stopped in May 1964. Two years later, PAL commenced its first jet services to Cebu, Bacolod, and Davao using the BAC1-11. In addition, PAL was also privatized, as the Philippine government relinquished its share in PAL after Benigno Toda, Jr., then-PAL chairman, acquired a majority stake in the airline.

Upon the declaration of martial law in 1972, Ferdinand Marcos, during his second term of presidency, implemented a monopolizing decree of a one-airline policy. PAL was the lone surviving airline, absorbing Air Manila and Filipinas Orient Airways. On March 10, 1973, PAL was re-designated as the national flag carrier. PAL continued its expansion with the arrival of its first Douglas DC-10 in July 1974. Three years later, the Philippine government re-nationalized PAL, with the Government Service Insurance System holding a majority of PAL shares. In 1979, the Boeing 727, the Boeing 747-200B and the Airbus A300B4, dubbed the "Love Bus", joined the PAL fleet, while the PAL DC-8 fleet was retired.

In 1975, Philippine Airlines was headquartered at the PAL Building in Makati City. Between 1979 and 1981, as part of a comprehensive modernization program led by then-PAL President Roman A. Cruz, PAL built a series of mammoth aviation-related facilities around the periphery of the MIA. These included the PAL Technical Center, the PAL Inflight Center, the PAL Data Center and the PAL Aviation School. In the same time period, PAL also achieved service successes, after being the first airline to be honored by Les Chaines de Rotisseurs, an ancient order of gourmets, with an award for its inflight cuisine. In January 4, 1980, The Philippine Airlines' Boeing 747–200 dubbed the "Jumbo Jet" was the first of its kind to fly across the pacific. In addition to that, PAL was also the first airline to introduce numerous fully flat bed seats in one aircraft. The 14 sleeping berths in the 747 known as "Skybeds" was certified for landing and take off. The "Skybeds" were exclusive to first class in the upper deck.

A Philippine Airlines Boeing 747–200 at Rome in March 1989

On April 2, 1982, a PAL Boeing 747-200B arriving from San Francisco via Honolulu became the first aircraft to dock at the new 800-million peso Terminal 1 of Manila International Airport. PAL would later strengthen its cargo-handling capability by building a dedicated cargo terminal building adjacent to the MIA passenger terminal and installing cargo-refrigeration equipment in 1983. The new facilities, which catered mainly to international cargo services, enabled PAL to become a fully equipped cargo handler. Services to Paris and Zürich began in November 1982.

After Cruz's resignation to President Cory Aquino on the last day of the 1986 EDSA Revolution, Dante G. Santos became PAL president. He launched a massive modernization of the domestic fleet with the acquisition of the Short 360, nicknamed the "Sunriser", in May 1987, the Fokker 50 in August 1988 and the Boeing 737–300 jet in August 1989. Corazon Aquino also abolished the one-airline policy in 1988 that had begun under Marcos.

As the Manila domestic passenger terminal outgrew its capacity and ramp aircraft parking space became more scarce, PAL leased the hangar of the Philippine Aerospace Development Corporation and converted it into the PAL Domestic Terminal 2. The terminal, which opened in October 1998, exclusively served passengers flying to destinations serviced by PAL's Airbus A300s: namely, Cebu and Davao, with General Santos and Puerto Princesa added later on. At the same time, PAL also expanded and improved the existing terminal. The opening of the new facility cleared out the old terminal and provided greater convenience to passengers.

Re-privatization and second expansion (1990–1997)

A Philippine Airlines A320 at Taoyuan International Airport. The A320 is one of PAL's first narrow body aircraft.

PAL was privatized again in January 1992, when the government sold a 67% share of PAL to a holding company called PR Holdings. However, a conflict as to who would lead PAL led to a compromise in 1993, when former Agriculture Secretary Carlos G. Dominguez was elected as the PAL president by the airline's board of directors. The fleet of BAC1-11s were retired in May 1992, following the completion of the deliveries of Boeing 737s, and the Short 360s in September. In November 1993, PAL acquired its first Boeing 747-400. The new aircraft arrived at Subic Bay International Airport and was carrying then-President Fidel V. Ramos, who was headed home from the United States after an official visit. The 400-ton aircraft, one of the world's largest and most popular long-range aircraft was a mainstay of PAL's trans-Pacific services and its flagship aircraft until it was retired in 2014. A new service between Manila and Osaka, launched in 1994, brought to 34 the number of points in PAL's international route network.

The PAL Domestic Terminal 2 was refurbished in 1995, with a number of facilities being added or improved, including a renovated Mabuhay Lounge, an exclusive check-in counter for Mabuhay Class passengers, an Express Counter, refreshment bar, a medical clinic, an expansive waiting lounge and two baggage carousels in the arrival section. PAL facilities at NAIA were also renovated. The total cost for the renovation of the domestic terminal (1 and 2) reached P33.15 million.

In January 1995, Lucio C. Tan, the majority shareholder of PR Holdings, became the new chairman and CEO of the airline. The delivery of the carrier's fourth Boeing 747–400 in April 1996 signaled the start of an ambitious US$4 billion modernization and re-fleeting program that aimed to make PAL one of Asia's best airlines within three years. The centerpiece of the program was the acquisition of 36 state-of-the-art aircraft from Airbus and Boeing between 1996 and 1999. The re-fleeting sought to give PAL the distinction of having the youngest fleet in Asia and allow the expansion of its domestic and international route network. The 36 orders of PAL during its re-fleeting program were for eight Boeing 747-400's, four Airbus A340-300's, two Airbus A340-200s, eight Airbus A330-300's and twelve Airbus A320-200's. The re-fleeting program enabled PAL to be dubbed the first airline in the world to operate the full range of new-generation Airbus aircraft.

Asian financial crisis (1997–1999)

A Philippine Airlines Airbus A340-200 at Charles de Gaulle International Airport in January 1998.

In 1997, PAL rebranded itself as "Asia's sunniest airline" to cap its new marketing and advertising thrust. PAL also commenced services to New York City, using the Newark Liberty International Airport via Vancouver. The acquisition of too many aircraft matched with unprofitable routes forced the airline to be financially unstable. The re-fleeting program was about halfway through when the full impact of the 1997 Asian financial crisis struck the airline industry early in 1998. By March 31, 1999, PAL dismantled its Mactan-Cebu International Airport hub. With massive lay-offs also taking place, disputes between the airline’s owners and the employee’s union led to a complete shutdown of PAL's operations on September 23, 1998. Cathay Pacific temporarily took over PAL's domestic and international operations during its fourteen-day shutdown, with Cathay Pacific also showing interest in acquiring a 40-percent stake in PAL during this period. However, no agreement was reached with the Hong Kong-based airline.

PAL resumed operations on October 7, 1998 after an agreement between PAL employees and top management, reported to be facilitated by Philippine President Joseph Estrada, was reached, with services to 15 domestic points out of Manila. On October 29, the flag carrier resumed international services with flights to Los Angeles and San Francisco, with other international services being restored three weeks later. Asian services resumed on November 11 with flights to Tokyo and Hong Kong. PAL gradually expanded its network over the next two months, restoring services to Taipei, Osaka (via Cebu), Singapore, Fukuoka, Dhahran, Riyadh and Seoul. With the aviation industry still in the doldrums, PAL continued to search for a strategic partner but in the end, it submitted a "standalone" rehabilitation plan to the SEC on December 7, 1998. The plan provides a sound basis for the airline to undertake a recovery on its own while keeping the door open to the entry of a strategic partner in the future. PAL presented the new proposed rehabilitation plan to its major creditors during a two-week marathon meeting that started on February 14 in Washington D.C. and ended on March 1 in Hong Kong.

In 1999, PAL submitted its amended rehabilitation plan to the Securities and Exchange Commission that comprised a revised business plan and a revised financial restructuring plan. The plan also required the infusion of US$200 million in new equity, with 40% to 60% coming from financial investors and translating to no less than 90% ownership of PAL. That same year, with the unprecedented boom in air travel, PAL operations were moved to the new Centennial Terminal 2 of Ninoy Aquino International Airport, located at the site of the old MIA terminal building. On August 9, 1999, PAL moved selected domestic flights to the P5.3 billion terminal. Full domestic operations operated from the new terminal on August 10, while international services followed soon after, thus consolidating PAL's flight operations in one terminal for the first time.

Receivership and rehabilitation (2000–2008)

In 2000, PAL finally returned to profitability, making some ₱44.2 million in its first year of rehabilitation, breaking some six years of heavy losses. On September 1, 2000, PAL formally handed over its ownership of its maintenance and engineering division to German-led joint venture Lufthansa Technik Philippines (LTP), the world's largest provider of aircraft maintenance services in accordance with the provisions of its rehabilitation plan, which mandates the disposal of the airline's non-core assets. In August of the same year, PAL opened an e-mail booking facility. In 2001, PAL continued to gain a net profit of P419 million in its second year of rehabilitation. In that year alone, PAL restored services to Bangkok, Taipei, Sydney, Busan, Jakarta, Vancouver and Ho Chi Minh City, while launching new services to Shanghai and Melbourne. A year later, PAL restored services to Guam and Tagbilaran.

Like other airlines, PAL was severely affected by September 11 Attacks in 2001. But, in 2003, PAL was restructured again.

A Philippine Airlines Airbus A330-300 in 2005.

The Mabuhay Miles frequent flyer program was launched in 2002, combining PAL's former frequent flyer programs, PALSmiles, Mabuhay Club, and the Flying Sportsman (now SportsPlus) all into one. The PAL RHUSH (Rapid Handling of Urgent Shipments) Cargo service was also re-launched during the same year. An online arrival and departure facility and a new booking system was then launched in 2003. In December, PAL also acquired a fifth Boeing 747–400.

In 2004, PAL launched services to Las Vegas to mark its 63rd year of service. PAL also returned to Laoag and started services to Macau on codeshare with Air Macau. In that same year, the PAL entered into code share agreements with Air France and KLM Royal Dutch Airlines for services to Paris and Amsterdam, respectively. Code share service to Paris was cut due to the merging of the two European airlines and the formation of Air France-KLM. Service to Amsterdam remained, operated by KLM. PAL also continued an overhaul of its fleet with the arrival of two new Airbus A320-214s and continued modernizing its ticketing systems with the launch of electronic ticketing. For the first time in Philippine history, the airline flew President-elect Gloria Macapagal-Arroyo and Vice-President-elect, now ABS-CBN journalist Noli de Castro to their inauguration in Cebu City. Arroyo rode a chartered PAL Airbus A330-300, while de Castro was aboard a separate Airbus A320-200.

In March 2005, PAL started services to Nagoya and restored scheduled flights to Beijing after a 15-year hiatus. In response to rival Cebu Pacific's increasing domestic market share, mainly due to its massive re-fleeting program and its own aging Boeing 737 fleet, PAL signed an agreement for the purchase and lease of up to 18 Airbus A319-112s and A320-214s from Airbus and GE Capital Aviation Services (GECAS) on December 6, 2005.

The first brand-new, GECAS-leased Airbus A319-112s were delivered to and inaugurated by PAL and President Arroyo on October 20, 2006. It was the first aircraft in the airline's history to offer AVOD-capable inflight entertainment on its Mabuhay Class cabin. In December, the airline initiated its wide-body re-fleeting program by signing a deal with Boeing for the purchase of two Boeing 777-300ER aircraft to be delivered in 2009, with an option for two more planes in 2011. PAL also signed a separate agreement with GECAS to lease another two Boeing 777-300ER aircraft for delivery in 2010. The purchase of the new 777-300ERs effectively cancelled previous orders for new 747-400s, ending the production of said aircraft. PAL later signed a memorandum of understanding that opens the way for the introduction of flights to the southwestern Chinese city of Chongqing. Service to Chongqing began on March 14, 2008, while service to Chengdu commenced on March 18, though the routes have been terminated after the 2008 Sichuan earthquake.

Philippine Airlines was named "Airline Turnaround of the Year" for 2006 and 2007 by the Centre for Asia Pacific Aviation for its "strategic contribution to the aviation industry through a significant transformation by successfully restructuring its operations through innovative cost-cutting measures resulting in operating profits".

Post-receivership history (2008–2011)

Philippine Airlines Airbus A330-300 at Narita International Airport in 2009

On October 4, 2007, nine years after being financially crippled by the Asian financial crisis and subsequent downturns in the aviation industry, the Securities and Exchange Commission ordered the release of PAL from receivership. The airline immediately announced plans to attract foreign investments through an international road show to tour around Asia, Europe and North America. PAL continued its ambitious expansion plans, launching regional subsidiary PAL Express on April 10, 2008 to supersede the financially troubled Air Philippines, with a $150 million order for three 50-seat Bombardier Q300 and six 78-seat Bombardier Q400 aircraft from Bombardier Aerospace. PAL Express operations began on 5 May with eight flights daily between Manila and Malay, while hub operations from Cebu City commenced on 19 May with flights between Cebu and five points in the Visayas and Mindanao. Services to other destinations, including many destinations formerly served by PAL prior to the Asian financial crisis, began in June and July 2008. PAL Express was originally to be primarily based in Cebu and fly intra-regional routes in the Visayas and Mindanao, as well as secondary routes to smaller airports in island provinces. In response to rising competition from Cebu Pacific and Zest Airways, PAL Express rebranded itself as Airphil Express on March 28, 2010 under a low-cost model. PAL decided to restore the PAL Express name as part of expansion strategy, effectively rendering the Airphil Express brand defunct on March 15, 2013.

Despite PAL's successful exit from receivership, international safety concerns regarding the Philippine aviation industry severely hindered its expansion plans. The United States Federal Aviation Administration downgraded the Philippines' aviation industry from Category 1 to Category 2 in January 2008, preventing PAL from increasing its flights to the United States from 33 per week or from switching the type of aircraft used unless the airline undertakes a wet-lease agreement with a different carrier. The FAA decision effectively stalled PAL's previously announced intentions to expand its presence in the US market with routes to San Diego, Seattle, Chicago, Saipan and New York City. On March 30, 2010, all Philippines-based carriers were placed in a EU aviation blacklist, banning PAL from flying to any European destinations. Nonetheless, PAL continued its route expansion plans in the Asia-Pacific region, resuming services to Riyadh with a four times weekly Boeing 747 service four years after it was suspended, as well as adding a twice weekly Airbus A330 service to Brisbane and three-times-weekly service to Delhi via Bangkok. However, the expansion proved unprofitable and all three routes were cancelled. Flights to Brisbane and Riyadh were suspended in 2011, and the Manila-Bangkok-Delhi route ended in 2013; however service to Brisbane and Riyadh resumed in the same year.

Despite these hindrances on its expansion, PAL went ahead with its widebody re-fleeting program, receiving its first two Boeing 777-300ER aircraft on November 19, 2009 and January 2010 respectively, and another two leased from GECAS in 2010. Due to the inability for PAL to further expand its long-haul network, the airline launched 777 service to its existing long-haul routes including Tokyo, Los Angeles and Vancouver. The 777-300ER jet features 370 seats in a two-class configuration (42 flat business class seats in a 2-3-2 layout and 328 economy class seats in a 3-4-3 layout), and is also PAL's first aircraft to feature AVOD in-flight entertainment in all classes (later retrofitted in its 747-400 fleet).

Labor disputes

In July 2010, 25 of Philippine Airlines' pilots resigned and left to seek employment abroad without informing the airline. After calls to return to work by both the airline and Philippine Government, PAL subsequently sought to file charges against the pilots involved for breach of contract. In the same month, PAL announced that it would be outsourcing jobs, with retrenchments resulting. Disputes with flight attendants, ground crew, airport staff as well as reservation agents escalated, with threats of potentially disruptive strike action, which took place in October. On Friday, November 12, 2010, the Department of Labor and Employment approved the lay-off of 2600 employees of Philippine Airlines.

Entry of San Miguel Corporation (2012–2014)

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 and strengthen PAL, renew its aging fleet and restore its competitiveness in the Asian aviation industry. San Miguel president Ramon Ang also announced intentions to join a global airline alliance. PAL's first major initiative under San Miguel ownership was confirmed on August 28, 2012, with a $7 billion order for 54 Airbus aircraft, comprising 44 Airbus A321 (34 with sharklets and 10 A321neo) and 10 Airbus A330-300, with options for 10 more. The A321 was ordered to enhance domestic and regional routes, while the A330-300s are to be flown on Australian, Middle Eastern and some European routes. PAL's original fleet of 8 A330s were transferred to PAL Express in response to Cebu Pacific announcing intentions to compete with PAL on mid-to-long-haul routes. PAL exercised its option to purchase a further 10 A330-300 for $2.5 billion on September 28. PAL took delivery of its first aircraft under this order in 2013.

A Philippine Airlines Boeing 777-300ER at Singapore Changi International Airport in 2012.

Under San Miguel's management, PAL embarked on expanding its route network, involving both adding new and restoring previously terminated routes. In 2013, the airline announced its return to Abu Dhabi, Dammam and Riyadh, and launched new routes to Brisbane and Perth (via Darwin), as well as Doha and Jeddah. In 2013, PAL was removed from the EU aviation blacklist after three years of negotiations, and the carrier immediately announced its European plans. PAL subsequently launched flights between Manila and Heathrow to commence in November 2013, its first European destination in 15 years. The airline will expand its US service as they will open flights from Manila to New York via Vancouver.

In addition to its fleet modernization and route expansion, PAL announced plans to become an investor within the aviation industry following the San Miguel partial acquisition. In 2012, the airline entered into negotiations with Cayman Airways for a 50 percent equity share in the Caribbean-based airline. Under the deal, Cayman Airways will issue new preferred shares to PAL's majority shareholder, San Miguel Corporation. As part of the proposed scheme, Cayman Airways will use the fresh capital to acquire new aircraft which will then be leased out to Philippine Airlines under a wet lease agreement. The planes will be registered and domiciled in the Cayman Islands, and to be flown, operated and maintained completely by Cayman Airways. In 2013, PAL entered a joint venture with the Cambodian conglomerate Royal Group of Cambodia, headed by Kith Meng to launch a new incarnation Cambodia Airlines with a 49% share. The new airline was originally expected to commence operations by June 2013, however no services have been launched as of September.

On August 30, 2012, PAL president Ramon Ang announced its intention to build a second international airport to service Metro Manila. Citing the need to relieve pressure on the congested and outdated Ninoy Aquino International Airport and the unreasonable 90 km distance from the Philippine government's favoured second airport option at Clark, Ang announced that the airline was in negotiations with a Korean contractor to build the airport on a 2000-hectare site, initially with two runways, eventually expanding to four, in a yet-undisclosed location north of Metro Manila. In March 2013, PAL postponed the project indefinitely citing government restrictions on airline corporate ownership of Philippine airports. However, on July 12, 2013, Ang stated that PAL was 'still looking to build' a new airport and were '100% sure' that the project would eventuate, although plans had yet to be finalised.

In a disclosure to the Philippine Stock Exchange on September 8, 2014, San Miguel stated that it has signed an agreement "whereby [San Miguel] expressed willingness to sell its 49% stake to the group of Dr. Lucio Tan, and the latter has expressed willingness to buy the said 49% stake." It added the deal is "subject to the fulfillment of certain conditions." Informed sources said San Miguel gave Tan a week to raise $1 billion to acquire the stake. The final transaction amounted to $1.3 billion and was completed a week later on September 15, 2014. In a disclosure to the Philippine Stock Exchange on September 16, 2014, San Miguel said Tan assumed day-to-day management of PAL through the appointment of its former president, Jaime Bautista, as general manager. But it maintained that Ang, as president of PAL, remains, along with the rest of his team, "until the relevant closing date of the agreement" between the parties. On October 15, 2014, Ang officially stepped down as President and COO.

Return of Lucio Tan and contemporary history (2014–present)

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A commemorative stamp of the 75th anniversary of Philippine Airlines issued in 2016.

On October 23, 2014, Philippine Airlines announced the appointment of Bautista as the new President and COO of Philippine Airlines. Under Bautista's rule, Philippine Airlines deferred some of its single aisle aircraft, ordered under the San Miguel management. The strategic move minimised the risk of an overcapacity with single aisle aircraft in the PAL fleet. Jaime Bautista also announced to replace its A340 fleet, with the choice of a new and modern Airbus A350 XWB or Boeing 787 Dreamliner. In addition to new aircraft, PAL has chosen to lease more 777's for its growing long haul flights.

In January 2015, Philippine Airlines became the official carrier of Pope Francis throughout his apostolic trip in the Philippines. The aircraft boarded by the pontiff was named "Shepherd One". The airline flew the pope to the city of Tacloban and, as per traditional protocol, flew him back to Ciampino Airport in Rome, Italy from Manila.

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A Philippine Airlines A320 with the '75' livery.

In March 2015, on the 74th anniversary of the carrier, Philippine Airlines resumed flights to New York City via the John F. Kennedy International Airport with a stopover in Vancouver from Manila. The airline previously flew to New York via the Newark Liberty International Airport, but canceled the route in 1997 following the Asian financial crisis. Philippine Airlines originally utilized the Airbus A340 for its flights, but in October 2015, PAL upgraded to the larger Boeing 777-300ER to increase seat capacity for flights to New York. In addition, Philippine Airlines expanded to the Oceania region by introducing flights to Auckland, New Zealand (via Cairns, Australia) and Port Moresby in Papua New Guinea. Philippine Airlines' global expansion and new routes also made the airline among nine out of the sixteen publicly traded Southeast Asian carriers to be profitable, having kept a $120 million profit. It was ranked the fourth profitable overall and second profitable full-service carrier in Southeast Asia, according to the Centre for Asia Pacific Aviation.

In June 2015, Philippine Airlines has renewed its partnership with Lufthansa Technik Philippines for a two-year base and heavy maintenance checks for its Airbus fleet.

In 2016, Philippine Airlines announced the launching of flights between Manila and Doha, Manila and Kuwait City (via Dubai), and Cebu City to Los Angeles. Also, PAL acquired six Airbus A350-900 and will operate the aircraft on non-stop flights from and to the U.S.

In April 2016, on Philippine Airlines' 75th anniversary, the airline introduced a new campaign called The Heart of the Filipino. The campaign was aggressively undertaken, with the launch of new advertisements which are endorsed by The Voice of the Philippines judges: singers Bamboo Mañalac, Lea Salonga, and Sarah Geronimo, as well as Miss Universe 2015 winner, Pia Wurtzbach. The airline adopted a new theme song, which incorporates the vocals of Mañalac, Salonga, and Geronimo. The lyrics famously includes the old PAL slogan "Shining Through," reminiscing on PAL's successful advertising campaign in the 1980s.

On January 1, 2017, Philippine Airlines launched its first and only international destination from Clark, Pampanga to South Korea's capital Seoul as part of their plan to decongest Ninoy Aquino International Airport and PAL already operate flights from Clark, Pampanga to Cebu City and to Davao City. They want to make the Clark International Airport from Angeles, Pampanga as one of their secondary hubs after Mactan–Cebu International Airport.

In February 2017, Philippine Airlines released a new pre-flight safety demonstration video in conjunction with The Heart of the Filipino campaign. The video featured various tourist destinations in the Philippines with locals from those destinations demonstrating the safety guidelines.

Corporate management

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The Philippine Airlines logo shown on the PNB Financial Headquarters from Roxas Boulevard

Philippine Airlines is owned by PAL Holdings (PSE: PAL), a holding company responsible for the airline's operations. PAL Holdings is in turn part of a group of companies owned by business tycoon Lucio Tan. PAL is the thirteenth-largest corporation in the Philippines in terms of revenue and the twenty-first largest in terms of assets, as stated in the Philippines' Top 500 Largest Corporations of 2005. As of January 2005, PAL employs a total of 7,322 regular employees, including 450 pilots and 1300 cabin crew. PAL is the sixty-first largest airline in the world in terms of revenue passenger kilometers flown, with over 16 million flown for 21 million available seat kilometers, an average load factor of 76 percent.

For the fiscal year ending on March 31, 2007, Philippine Airlines reported a net income of US$140.3 million, the largest profit in its 66-year history. This allowed it to exit receivership in October. PAL had forecast net profit to reach $32.32 million for the fiscal year ending on March 31, 2008, $26.28 million in 2009 and $47.41 million in 2010, but this proved difficult to achieve, with a large loss announced in early 2009 causing some concern.

Destinations

Further information: Philippine Airlines destinations

Philippine Airlines operates a primary hub (Ninoy Aquino International Airport) and a secondary hub (Mactan-Cebu International Airport), with the majority of routes operating from Ninoy Aquino International Airport. The airline flies to destinations in Asia, United States, Canada, Australia, Middle-East, and United Kingdom.

Philippine Airlines' destinations (blue) served from the airline's two hubs (red radar signal), excluding domestic destinations. Charter or seasonal services are green while future destinations are yellow.

Codeshare agreements

Philippine Airlines codeshares with the following airlines:

• Air Macau
• All Nippon Airways
• Cathay Pacific
• China Airlines
• Etihad Airways
• Garuda Indonesia
• Gulf Air
• Hawaiian Airlines
• Malaysia Airlines
• PAL Express (Affiliate)
• Turkish Airlines
• Vietnam Airlines
• WestJet
• XiamenAir

Fleet

Main article: Philippine Airlines fleet

File:Philippine Airlines Boeing 777-300ER RP-C7776 LHR 2014-03-29.png

PAL B777 landing in London Heathrow Airport

The Philippine Airlines fleet composed of wide-body and narrow-body aircraft from four families (excluding PAL Express fleet): Airbus A320, Airbus A330, Airbus A340 and its flagship, Boeing 777. As of 2 January 2017, there were 55 aircraft registered in the PAL fleet.

Brand

Logo

The Philippine Airlines logo has gone under four incarnations in the entire length of its operations. The first logo incorporated a blue oval with "PAL" superimposed in white letters, a four-pointed star whose points intersect behind the "A" in the PAL initials, and a wing whose position varied depending on the location of the logo (the wing points to the right if located on the left side of the plane, left if on the right side). A variant of this logo used a globe instead in the blue oval with the PAL initials superimposed. This logo would be in use from the 1950s until the mid-1960s, when it would be replaced by a second logo.

The second logo adopted a blue triangle (with the bottom point missing) and a red triangle superimposed upon it, enclosed by a circle; this was meant to evoke a vertically-displayed national flag (the white being formed by the negative space between the two triangles' tips). In the mid-1970s, a third logo, which removed the circle and simplified the shapes, was introduced. The typeface used in the third logo was later applied to the second logo, which remained the official PAL logo until 1986, when it would be replaced by the current logo.

The current PAL logo features the same two blue and red sailed triangles used in the second and third logos. However, an eight-rayed yellow sunburst that called the shaped Sailboat was superimposed on top of the blue triangle, and a new Helvetica typeface was used.

• PAL50.png

  1950-1960

• PAL60.png

  1960-1970

• PAL-70.png

  1970-1986

• PRLogo1986.jpg

  1986–present

Livery

PAL liveries have undergone many incarnations. The first PAL aircraft bore a simple white-top, silver-bottom livery separated by solid straight cheatlines, with a small Philippine flag superimposed on the tail. The name "Philippine Air Lines" was superimposed in the upper forward portion of the fuselage and the PAL logo was located at the back. Later variants of the livery, especially on PAL jet aircraft, made use of an extended Philippine flag as cheatlines, with the PAL logo superimposed on the tail. By this time, the name "Philippine Airlines" was used in the livery.

Another variant of the original livery used by PAL is somewhat similar to the current livery. However, it uses PAL's third logo on the tail with blue, white and red cheatlines running the center of the fuselage. Later on, the bottom half of the fuselage was also painted white.

The current "Eurowhite" livery, first used with the Short 360, was adopted in 1986 following PAL's corporate rebranding. This livery, (designed by Landor Associates) has the name "Philippines" superimposed on the forward portion of the fuselage in italics (using the PAL logo typeface), while the tail is painted with the logo and the Philippine flag is visible near the rear of the aircraft. The PAL logo is also painted on the winglets of aircraft that have them. The name "Philippines", instead of "Philippine Airlines", is to denote that PAL is the primary flag carrier of the Philippines. However, this sometimes leads to confusion that a PAL plane, especially when chartered by the President for official or state visits, is in fact the official air transport of the Philippine head of state. Any PAL aircraft with the callsign PR 001 is a special plane operated by Philippine Airlines to transport the President of the Philippines.

For the airline's 70th anniversary, a special decal was placed on all of its aircraft. The sticker featured a stylized "70" and the words, "Asia's first, shining through".

As the airline celebrates its 75th anniversary, a special decal was put at the back of every aircraft. The sticker features a stylized "75".

Slogans

• Mabuhay
• Asia's First Airline
• Welcome Aboard the Philippines
• Shining Through – concurrent with the slogan The beauty of the Philippines that heavily promoted the Philippines as a tourist destination. The TV advertisement clip won a finalist in Clio Awards.
  • 1987 Advertisement
  • 1987 Advertisement
• Pilipino, Para sa Pilipino (Filipino, for the Filipino)
• On the Wings of Change
• Asia's Sunniest
• With You All the Way
• It's About Experience – introduced after its 60th Anniversary. It attempts to highlight the fact that PAL is the first and longest-serving airline in Asia under its original name. The slogan was also used in the airline's ad spot featuring Kevyn Lettau, which incidentally featured her song, "Sunlight."
• Love at Thirty Thousand Feet" the song was composed by Jose Mari Chan. The song has many variations, including a version for the PAL's Swingaround tour package advertisement.
• Clearly no. 1
• With us, You're always no. 1
• 70 Asia's First, Shining Through – introduced for PAL's 70th anniversary, it combines two previous PAL slogans: Asia's First Airline and Shining Through.
• Love, Your PAL
• Fly The Flag. Fly Proud
• Your Home in the Sky
• The Heart of the Filipino- introduced for PAL's 75th anniversary, which features a new theme song with Filipino singers: Bamboo, Lea Salonga, and Sarah Geronimo.

Frequent flyer program

File:Mabuhay Miles logo.png

Mabuhay Miles logo

Mabuhay Miles is the Philippine Airlines frequent flyer program. It was established in 2002 by merging all existing PAL frequent flyer programs prior to the Asian financial crisis: namely, PALsmiles, the Mabuhay Club and the Flying Sportsman, with PALsmiles and Mabuhay Club members being moved to the new program on August 1, 2002. The Flying Sportsman program was subsequently transformed into SportsPlus, a three-tiered, subscription-based program which gives extra baggage allocations for sports equipment. Mabuhay Miles members earn miles that can be redeemed at face value on most Philippine Airlines-operated flights, as well as on code-shared routes of partner airlines.

Mabuhay miles is divided into multiple tiers:

• Classic – The basic level at which one starts earning 'miles',
• Elite – Passengers receive a 25% bonus on actual distance flown for all Philippine Airlines and PAL Express-operated flights, Lounge access, Priority check-in, boarding, luggage handling, Priority Airport Standby, and an Additional Luggage Allowance.
• Premier Elite – Passengers will receive a 75% bonus on actual distance flown traveling to and from USA, Canada and London on Philippine Airlines. For all other Philippine Airlines and PAL Express-operated flights, they will receive a 25% bonus on actual distance flown, Lounge Access, Priority check-in, boarding, luggage handling, Priority Airport Standby, Additional Luggage Allowance, and Upgrade Travel Certificates. Selected Privileges may be extended on Airline Partners.
• Million Miler – Passengers will enjoy the highest level of privileges in the Premier Elite level for life. Expect only first-priority treatment and dedicated travel assistance throughout their journey.

Mabuhay Lounge

File:PAL-NAIA2-Lounge1.jpg

NAIA-2 Domestic Lounge Sitting Area

The Mabuhay Lounge is the airport lounge for Philippines Airlines. Mabuhay (Business) Class and Elite Members of Mabuhay Miles (except those taking PAL Express flights) are eligible to use the lounge. The clubs all have open bars and food catering.

Between June 15 to August 15, 2015, Philippine Airlines began renovations on the Mabuhay Lounge at NAIA-2. The passenger lounge, which has a seating capacity of 110, reflects a blend of contemporary and traditional design. Each lounge chair is equipped with a power supply, enabling passengers to charge their personal electronic devices. Wi-Fi is available in the lounging and dining areas.

In-flight services

An example of an Economy Class in flight breakfast served for its Manila–Hong Kong flights.

Cabin

Philippine Airlines currently offers three classes services on all aircraft, business class, premium economy class, and economy class. During the second half of 2006, PAL announced a cabin reconfiguration project for its Boeing 747-400 aircraft. The airline spent US$85.7 million to remove all first class seats and increase the size of its business and economy seats, leading to the aforementioned new seats; as well as add personal screens with audio and video on-demand (AVOD) across both cabin classes. The cabin reconfiguration project began in the third quarter of 2008. The first 747-400 to be reconfigured (reg. RP-C7471) re-entered service in October 2008. The second reconfigured plane (reg. RP-C7475) was completed in May 2009, and the third (reg. RP-C7472) was completed July 2009. The fourth 747 (reg. RP-C7473) began reconfigured work in August 2009.

Mabuhay Class

Mabuhay Class seats, available on all aircraft, offer increased legroom, and personal screens (A320-200s with registration numbers RP-C3221 and RP-C3223 do not feature personal screens and instead have drop-down LCD screens). Currently, Philippine Airlines is the only Philippine carrier to offer business class on domestic flights. Boeing 777-300ER aircraft feature angled lie-flat seats manufactured by Recaro. Arranged in 2-3-2 configurations, seats have a pitch of at least 60 inches. Seats are upholstered in blue with silver-copper accents and feature 15-inch (38 cm) personal screens with AVOD (bulkhead and exit row seats feature 10.6-inch (27 cm) personal screens), as well as in-seat power. The 777-300ER seats feature a USB port where passengers can plug in their flash drives to listen to music from their personal collection on the aircraft's IFE system.

On other wide-body aircraft such as the A340-300, the older First Class cabin with seat pitch of 82-inch (210 cm) is sold as Mabuhay Class, alongside other recliner seats with seat pitch of 50-inch (130 cm). While there are personal screens, AVOD is not always offered.

Mabuhay Class seats on recently delivered A321s recline, and have a seat pitch of 39 inches (99 cm). The feature laptop power supply (both AC and USB). There is no IFE built into the seats but iPads are provided on select flights for no extra cost.

Premium Economy Class

As a hard product, premium economy class is available on A321s and selected A330s, as well as PAL Express flights using two class A320's in which case the business class seats are sold as Premium Economy. They are similar in design to standard/regular economy class seats but feature at least 4–5 inches more legroom providing a minimum of 34–36 inches of legroom. On some flights, passengers are also treated to complementary iPads.

Fiesta Class

Fiesta Class seats are also available on all aircraft. Footrests and tray tables are found in the seat in front, except for bulkhead and exit seats, where the tray tables are embedded in the seats and footrests are on the floor. A319-100s and A320-200s have drop down overhead LCD screens. All aircraft in the mainline fleet feature audio entertainment to Fiesta Class passengers.

The Boeing 777-300ERs feature a new economy class seat also manufactured by Recaro and Weber, respectively. Their seats offer a pitch of between 32 and 34 inches. The new economy class offers AVOD and each seat is equipped with 9-inch (230 mm) monitors, mounted either on the seatbacks or armrests (for bulkhead and exit row seats). Similar to the Mabuhay Class seats, Fiesta seats on board the 777-300ER also feature a USB port that allows passengers to charge portable devices. The 777-300ER also have In-flight internet and mobile service.

In late 2008, Philippine Airlines introduced Econolight, which is its no-frills economy class product. Passengers can travel on domestic and selected regional routes. While the seat used is the same as PAL's full-service Fiesta Class, at the time of launch, food and headsets were not provided and they had to sit at the back of the aircraft. No physical barriers (i.e. walls or curtains) separate Econolight passengers from full-service Economy class passengers; instead, Econolight passengers were identified with a sticker attached to their seat. However, in November 2009, Econolight was enhanced to provide meals and passengers may already choose their seats at check-in. The inclusion of meals and seat assignments came at the expense of raising the base fares to almost double what it was when it launched. Other restrictions such as the lack of check-through facilities and lounge access for high-tier Mabuhay Miles members still remain though.

Incidents and accidents

Main article: List of Philippine Airlines accidents and incidents

Although Philippine Airlines aircraft have been involved in a string of accidents since its founding in 1941, the majority of airline accidents have occurred with propeller aircraft during the early years of operations. Few PAL jet aircraft have been involved in accidents, the most notable being the explosion onboard Philippine Airlines Flight 434, masterminded by al-Qaeda and precursor to the ill-fated Project Bojinka.

Safety

Despite this, PAL is known for being the only airline in the Philippines to be accredited by the International Air Transport Association with passing the IATA Operational Safety Audit (IOSA), having been accredited in February 2007.

Philippine Airlines also has a 6/7 safety rating according to AirlineRatings.com, which was rated safer than some of its South East Asian Counterparts: Malaysia Airlines (5/7), Garuda Indonesia (3/7), Thai Airways (4/7), Vietnam Airlines (5/7)

Issues

Financial issues

PAL experienced huge financial losses for the past few years. On March 31, 2006, PAL’s consolidated total assets were amounted to 100,984,477 Philippine pesos, an 11% decrease compared to 112,982.6 million Philippine pesos balance as of March 31, 2005. On March 31, 2007, the company’s consolidated assets continue to diminish by 8% with amount equivalent to 92,837,849 Philippine pesos as against to 2006 figures. The declination of PAL’s assets was primarily due to net decrease in property and equipment and advance payments to aircraft and engine manufacturers, current and other non current assets. As of March 31, 2007, other current and noncurrent assets fell by 29% to 2,960.4 million Philippine pesos and by 20% to 2,941.7 million Philippine pesos "due to the effect of re-measurement to fair value of certain financial assets and derivative instruments". After carrying 17% more passengers in 2009 due to acquisition of additional aircraft and growth in the local market, PAL annual income report showed raise in revenues amounted to US$1.634 billion from US$1.504 billion in 2008. In spite of this, PAL expenses escalated as a result of more flight operations and higher maintenance costs aggravated by fuel prices fluctuations; forty-four percent (44%) of PAL income operating expenditures is utilized for fuel consumption.

Labor issues

PAL has a history of labor relations problems. On June 15, 1998, PAL retrenched 5,000 of its employees, including more than 1,400 flight attendants and stewards to allegedly reduce costs and alleviate financial downturn in airline industry as consequence of Asian financial crisis. Represented by Flight Attendants and Stewards Association of the Philippines (FASAP), the retrenched employees particularly the 1,400 cabin crews seek remedy for their problem through judicial process and filed a complaint on the grounds of unfair labor practice and illegal retrenchment. It took a decade before it was finally settled. It passed the Labor Arbiter to the National Labor Relations Commission then to the Court of Appeals and, finally, to the Supreme Court. The Philippine Highest Tribunal favored the aggrieved party and on July 22, 2008, in its 32-page decision ordered PAL to "reinstate the cabin crew personnel who were covered by the retrenchment of and demotion scheme of June 15, 1998 made effective on July 15, 1998, without loss of seniority right and other privileges, and to pay them full backwages, inclusive of allowances and other monetary benefits computed from the time of their separation up to time of actual reinstatement, provided that with respect to those who have received their respective separation pay, the amount of payments shall be deducted from their backwages." The Supreme Court further explained that there was a failure on the part of PAL to substantiate its claims of actual and imminent substantial losses. Although the Asian financial fiasco severely affected the airline, PAL defense of bankruptcy and rehabilitation are untenable; hence, the retrenchment policy is not justified.

Competition

For more than 20 years, PAL monopolized the air transport industry in the Philippines. This came to an end in 1995 through the passage of Executive Order No. 219 that permits entry of new airlines in the industry. The liberalization and deregulation of Philippine airline industry have brought competition in the domestic air transport industry resulting to lower airfare, improvement in the quality of service and efficiency in the industry in general. At present, three airlines are competing in international and major domestic routes: PAL, Cebu Pacific and PAL Express (formerly known as Air Philippines) and two airlines are serving minor and short-distance routes: Philippines AirAsia, Cebgo (formerly SEAIR and Tiger Airways) and other small airlines.

See also

• List of airlines of the Philippines
• List of airports in the Philippines
• List of companies of the Philippines
• Transportation in the Philippines

References

Notes

External links

• Official website
• PAL Express official website
• Mabuhay Miles, Philippine Airlines' rewards program