Brexit seen to affect PAL
FLAG carrier Philippine Airlines would not be spared from the fallout of Britain’s historic decision to leave the European Union, a development dubbed Brexit.
PAL president Jaime Bautista said revenue would take a hit with the steep devaluation of the British Pound, which last week sank by 10 percent to a 31-year low.
PAL is the only Philippine carrier with flights between Manila and London. He said the flag carrier recorded about $50 million in yearly revenue from this route.
“If there is devaluation, that’s a problem for us because we book our revenue in US dollars,” Bautista told reporters at the sidelines of the company’s annual meeting yesterday.
Bautista said the British Pound was still down by about 8 percent against the dollar. He said if this level would hold, revenue could decline by some $4 million.
“So far, the immediate impact is the effect of the devaluation of the pound sterling,” he added.
Bautista said a weaker pound might also discourage residents in the United Kingdom from traveling, since their money was worth significantly less. By contrast, this would also make the UK more affordable to visitors, he noted.
The development comes as PAL seeks to bolster its presence in the UK, and the rest of Europe.
Bautista said PAL’s Manila to London flight was still not profitable although passenger load was improving. He, however, noted it was also important to maintain its global network, given plans to become a five-star full service carrier by 2020.
Bautista said it was too early to determine how the Brexit development would affect the carrier’s plan to widen its presence in Europe.
Earlier, the flag carrier said it was studying possible new flights to Amsterdam, Hamburg, Rome and Paris. Bautista said there was no rush to expand in Europe, as plans would still be finalized in two more years and following the delivery of its next-generation Airbus A350 planes in the first quarter of 2018.
The carrier remained keen on expanding its presence in other parts of the globe.
PAL said in a statement on Wednesday that it had forged a codeshare deal with Hawaiian Airlines, its first such agreement with a US-based carrier.
This covered flights from Honolulu in O‘ahu to the inter-island points of Li-hu‘e, Hilo, Kona, and Maui.
