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PAL eyes Delta Airlines tie-up

One of ‘big three’ carriers to help broaden US market reach
/ 03:20 AM November 07, 2016

Philippine Airlines (PAL) is proposing a codeshare agreement with Delta Air Lines, one of the “big three” carriers in the United States, in step with a plan to broaden its US operations.

PAL president Jaime Bautista said the Philippine flag carrier recently approached Delta, offering a tie-up that would leverage on PAL’s nonstop flights from Manila to the US and Delta’s massive domestic network.

“I think they are open (to the idea),” Bautista said in an interview. A Delta spokesperson did not immediately reply to a request for comment.

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The plan is in line with PAL’s strategy to expand its presence in the US, one of its most profitable destinations. Route expansion is also part of PAL’s plan to become a “five-star” carrier by 2020.

Last week, PAL received its 7th Boeing 777-300ER to be used to increase flights to Los Angeles and San Francisco, given an expected uptick in demand during the Christmas holiday season, Bautista said. PAL will get an 8th 777-300ER next month.

PAL corners a large share of flights between the US and the Philippines as well as with the rest of the region because it is the only carrier providing nonstop flights between Manila and the US West Coast and the fact that the US is home to about four million Filipinos and Filipino-Americans. PAL also mounts flights to New York via a stopover in Vancouver, Canada.

Consultancy firm CAPA-Center for Aviation data showed that the Philippines accounted for 34.8 percent or about a million out of the three million annual one-way passengers between Southeast Asia and the US.

“PAL does not have a strong US domestic partner, making it difficult to access seats beyond Los Angeles and San Francisco and offer competitive fares to offline markets,” CAPA said. PAL sealed last June a codeshare deal with Hawaiian Airlines, but this was limited to connections to the Hawaiian islands.

Bautista thus noted that a partnership with a big US carrier would be a good fit. Delta has a “mainline” fleet of 800 aircraft. It already serves Manila but this is via flights via its Narita hub in, Japan.

Such a partnership only became possible since the US Federal Aviation Administration restored the Philippines’ category 1 safety rating in 2014.

Bautista noted that partnering with a big carrier did not remove the possibility that PAL would add routes to the US. Earlier, the carrier was looking at destinations with large Filipino populations, which included Chicago.

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PAL, operated by Lucio Tan-controlled PAL Holdings Inc., has a fleet of 79 aircraft, with long-haul routes being served by its B777s as well as its Airbus A330-300s and A340s.

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