PAL to launch flights between Taipei-Osaka

Flag carrier Philippine Airlines (PAL) is launching flights between Taipei and Osaka next month, increasing connectivity via the use of the country’s fifth freedom rights.

PAL said in a statement that the route would be launched on June 25, 2016, using its Airbus A321 planes.

The fifth freedom right allows a domestic carrier like PAL to fly from Manila to an international destination, then pick up passengers and cargo in that location and ferry these onward to a third and final international destination. These are coveted by carriers since they improve flight utilization, making the route more profitable.

“PAL is all set to establish the sought after Osaka–Taipei air link on June 25. This will enable the Japanese market to travel to Taiwan with ease, comfort and convenience,” PAL president Jaime Bautista said in the statement.

“On the other hand, leisure travelers from Taipei may take advantage of this direct flight to Japan and travel on to Manila or Cebu,” the carrier added in the same statement.

PAL has 10 weekly frequencies between Taipei and Manila and 14 frequencies between Osaka and Manila.

Bautista earlier noted that the carrier planned to increase fifth freedom flights for other routes to improve business prospects. Even then, it has faced challenges related to this plan.

The Lucio Tan-controlled carrier is front and center of a row between the Philippines and Kuwait that erupted after the latter blocked PAL’s plan to use fifth freedom flights between Dubai in the United Arab Emirates and Kuwait City. This meant that PAL was not allowed to pick up passengers and cargo in Dubai headed to Kuwait.

In response, Kuwait Airways’ Bangkok-Manila fifth freedom privileges were suspended last March 27 after more than two decades of operation.

PAL nevertheless called for diplomatic intervention, stating that the fifth freedom right was clearly granted under the Philippine-Kuwait Bilateral Air Services Agreement of 1977, as amended in April 1995 and February 2009.

PAL, in January this year, launched a four times weekly service between Manila and Kuwait (via Dubai).

While airlines were expected to do better in 2016 due to lower fuel prices, a significant component of operating costs, PAL’s operator PAL Holdings posted a decline in profits in the first quarter of the year. Specifically, PAL Holdings said net income during the quarter slipped 21 percent to P2.66 billion, while total revenues rose 4.1 percent to P29.12 billion.

A drag to earnings was the 6.2-percent increase in total expenses to P26.2 billion.