Philippine Airlines has launched PAL Express, a low-cost subsidiary using turbo-propeller aircraft. It will be based in Cebu and operate mainly to domestic island points.
This is the first time in the carrier’s 67-year history that it has created a low-cost model. Jaime J Bautista, president of PAL, said: “PAL Express will meet the growing demand of the travelling public for a high-quality carrier offering low fares. At the same time, it supports the Philippine government’s efforts to promote trade and tourism, particularly to our many small islands, providing a much-needed lift to the local economy of these communities.”
PAL will acquire nine turboprops – three Bombardier Q300s and six Q400s – to make up the budget airline’s initial fleet. PAL Express will primarily fly intra-regional routes in Visayas and Mindanao (two of the Philippines’ three main islands) from its Cebu hub, as well as secondary routes to smaller airports in island provinces which are not able to accommodate PAL’s regular jet aircraft.
The development marks the return of PAL to the “missionary routes”. In June 1998, PAL entered receivership after a series of external and internal crises which led to significant losses, shutting operations for two weeks and pushing it to the brink of liquidation. The restructuring that followed led to a reduction of its route network.
The slack was later taken up by other players like Cebu Pacific and to a lesser degree Air Philippines (owned by a group of PAL stockholders) and Asian Spirit. PAL emerged last year from its rehabilitation programme earlier than expected, due to improved performance and optimistic projected cash flows.
PAL Express will begin operations on May 5 with eight daily flights between Manila and Caticlan, the jump-off point to the beach Mecca of Boracay, which expects to get a Shangri-La resort late this year. Services will ramp up dramatically on May 19 when the Cebu hub launches flights to five points in the Visayas and Mindanao.
For more information visit philippineairlines.com.
Report by Margie Logarta, editor of Business Traveller’s Asia-Pacific edition
