Philippine Airlines To Order Boeing 777-300ERs

Philippine Airlines as early as this week plans to order at least six Boeing 777-300ERs, The DAILY has learned, as part of its long-haul fleet expansion; PAL plans to use the new aircraft to boost service to the U.S. West Coast.

The carrier in September said it was evaluating bids to order five aircraft for the regional widebody fleet and three for long-haul operations (DAILY, Sept. 5). President Jaime Bautista said PAL evaluated the 777 and the Airbus A340-600 but decided that the two-engine 777 was more efficient and burned less fuel than the four-engine A340. He told The DAILY in Osaka on the sidelines of the Association of Asia Pacific Airlines annual meeting that a deal has been signed with Boeing and an announcement is planned this week.

The deal includes a firm order for two 777-300ERs and options for another two aircraft. PAL also will take two more 777s through a lease deal. The purchased planes will be delivered in 2009, and the leased aircraft will arrive in 2010. The options are available for delivery starting in 2011.

Two-Class Product

The carrier is working to determine the final number of seats for the aircraft, but Bautista confirmed that the airline will have a two-class product. PAL's long-haul operations currently have three classes, but the airline decided to remove first class from its long-haul fleet and introduce a new lie-flat "cocoon" seat, he said. The new product also will have an upgraded inflight entertainment system.

The airline has eight A330s and four A340s in service, along with five Boeing 747s. Bautista said the airline has no immediate plans to drop any of the aircraft until the new 777s start arriving in 2009. He said the carrier is considering the 787 for additional growth, although a decision will not come for several years.

The 777s will likely be used to expand service to North America, Bautista said. He wants to add more frequencies to Los Angeles, San Francisco and Vancouver. In terms of new markets, PAL is evaluating nonstop service to Seattle and flights to San Diego. It now flies four days a week from Manila to Las Vegas with a stop in Vancouver. If it can win regulatory approval, it would operate the other three weekly frequencies to San Diego via Vancouver.

Another priority is to boost its presence in China and India. The carrier wants to offer more frequencies to Beijing and Xiamen and will likely add flights to India thanks to a new bilateral agreement. Under the agreement, PAL would be able to add flights to seven Indian destinations.

PAL is working to keep its costs under control to offset high fuel prices, and Bautista predicts the airline's profits will be on par with the high results of last year. For the year ending March 31, PAL's profit was $28.7 million, the airline's most profitable year in more than a decade. The current-year results will be close to that amount or may dip slightly, depending on fuel prices, he said, adding that traffic should rise about 5% this year.