Key Points:

  • PAL reported an operating profit of $298 million in 2022, following its extensive restructuring.

  • A result of restructuring, PAL is instilling a "performance-linked culture", rewarding employees with bonuses during profitable years.

  • Challenges with Pratt & Whitney PW1000 engines ground several of the airline’s Airbus A321neos.

Manila's Single Runway and Skilled Manpower Shortage Pose Growth Challenges for PAL

MANILA — Amid the rebound of the post-pandemic travel sector, Philippine Airlines (PAL) is celebrating its return to profitability, a consequence of its significant restructuring during the coronavirus outbreak. Stanley Ng, PAL's President and Chief Operating Officer, expressed his optimism at the IATA World Safety & Operations Conference in Hanoi. He said, “Last year was really good and we’re even more hopeful for this year.”

The successful restructuring led PAL to its first operating profit since 2019, reporting $298 million in 2022. This strategic move not only reduced significant liabilities but also enabled the airline to competitively price its fares. Ng emphasized the significance of the restructuring: “Operating costs have decreased, and it has had a notable positive impact on Philippine Airlines.”

Further, the restructuring fostered a performance-linked culture within PAL. Ng underlined that the impressive 2022 performance resulted in a substantial bonus for employees, boosting the airline's morale.

However, the journey has not been without challenges. Engine issues with Pratt & Whitney PW1000 have grounded three of PAL’s eight Airbus A321neos. Despite these setbacks, Ng appreciates the support from P&W but believes that priority for new engines should be given to existing customers over newcomers.

In terms of fleet dynamics, the airline currently has 76 aircraft in service. Though PAL previously owned six A350-900s, post-restructuring led to the departure of four from their fleet. Adding to this, Ng mentioned the upcoming delivery of nine A350-1000s between 2025-27, which will replace the existing Boeing 777s. PAL is also eyeing another widebody order, particularly for medium-routes currently served by their 10 A330-300s.

However, growth prospects for PAL are accompanied by infrastructural challenges. Ng pointed out the slot constraints at Manila’s Ninoy Aquino International Airport, emphasizing the urgent need for a two-runway system. Additionally, there's an industry-wide manpower crunch, especially in the Maintenance, Repair, and Overhaul (MRO) sector. PAL aims to collaborate with the government to enhance training opportunities, preparing young aspirants for industry roles.

Concluding his remarks, Ng remained optimistic yet cautious. He stressed, “While demand outpaces capacity, it's crucial to manage growth. Successful expansion requires training, manpower support, and consistent innovation.”