Duterte-spooked? PAL sees carrying more passengers to and from the US

Seattle—The air travel business between the Philippines and the United States remained red-hot, amid fears the diplomatic ties between the two countries have turned icy due to recent pronouncements from the Duterte administration.

Flag carrier Philippine Airlines received last week its latest long-range B777-300ER from US manufacturer Boeing Co., with plans to immediately deploy the aircraft to increase flights to San Francisco and Los Angeles.

“This market continues to grow,” Bautista told visiting Filipino reporters during the aircraft delivery ceremonies.

The B777-300ER, among Boeing’s most successful aircraft models, would allow PAL to mount twice daily flights to Los Angeles starting December “in time for the peak Christmas season.” The carrier would also upgauge its flights to San Francisco.

This delivery marks PAL’s sixth 777-300ER, bringing its total fleet to 79 aircraft. It would receive its 8th 777-300ER by December. Both planes are under a lease agreement with Intrepid Aviation.

US routes were partly being served by the older, smaller and less fuel-efficient Airbus A340s, which would eventually be used for other routes, Bautista said.

Despite President Duterte’s rhetoric-laden speeches against the US, PAL is seeking to tap opportunities in one of its most profitable routes.

At present, the carrier faces no competition in terms of nonstop flights between the US and the Philippines. As a result, it corners over a third of the US-Philippines commercial air travel market.

Growing competition

Still, there was growing competition from carriers based in North Asia, the Middle East and the US.

Even then, Bautista said PAL was able to maintain a load factor, or a measure of flight utilization, above 80 percent.

“There’s more business and more tourism. What we also want to achieve is also to carry not only Filipinos, but the mainstream [US] market,” Bautista said. “With the added capacity, we should be able to accommodate them.”

According to think tank CAPA-Center for Aviation, PAL controlled the single biggest share of passenger traffic between the US and Southeast Asia. It said there were opportunities—as well as risks—on the horizon.

Faster transit time
“While the largest Filipino American communities are on the west coast, there are significantly sized communities in several other US metropolitan areas including in Chicago, New York, Houston and Washington DC,” CAPA said.

PAL already flies to New York via Vancouver, Canada. However, CAPA said North Asian carriers had a competitive advantage in terms of faster transit time.

CAPA data showed the Philippines accounted for 34.8 percent or about one million out of the three million annual one-way passengers between the region and the US. The Philippines was followed by Vietnam, which had 19.5 percent, followed by Thailand at 16.3 percent, and Singapore at 11.6 percent.