Lucio Tan wants PAL to beef up fleet

Tycoon Lucio Tan said PAL Holdings Inc., the operator of the country’s flag carrier Philippine Airlines (PAL), must rebuild its product and its fleet to remain competitive, according to a report by BusinessMirror.

During the company’s annual stockholders’ meeting on Thursday, Tan sought the support of the company’s stakeholders “for the task of surmounting these great challenges.”

“We face major challenges just the same.  We must resolve many operational and supply problems that hinder PAL from extending the best possible service to its customers.  We need to rebuild our product and our fleet,” Tan said in his prepared remarks read by his grandson Lucio Tan III.

“Philippine Airlines needs to be a stronger competitor and a leader in service and innovation. This is imperative for a company that aims to be the airline of choice in the market it serves, which is the vision we defined for our flag carrier.”

PAL has a fleet size of 74 aircraft with an average fleet age of 8.8 years.

The airline signed a memorandum of understanding to acquire 9 Airbus A350-1000 long-haul jetliners, the largest version of the A350 family of high-performance aircraft, to operate nonstop flights to the United States and Canada and potentially to Europe.

Tan III, meanwhile, has been appointed as PAL’s president, taking over the position from his grandfather, who will retain his post as the company’s chairman and CEO.

“I am committed to providing stability and upholding the highest level of integrity within the company. I look forward to working closely with the PAL team, under the leadership of its president and COO, Capt. Stanley Ng, to ensure a collaborative and cohesive approach in serving the best interests of our customers,” Tan III said.

“We also aim to safeguard our shareholders’ investments by fostering a culture of transparency, accountability, and long-term value creation.”

Philippine Airlines Inc., the company that operates the airline, earlier said it had an operating income of $135.2 million (some P7.4 billion) in the first quarter, a fourfold increase from the $33.8 million (P1.7 billion) last year. Total comprehensive income for the period reached of $108.2 million.

The company said the positive financial performance reflects the continuing strength of the recovery of air travel. During the quarter, PAL re-introduced routes to several cities in mainland China and launched nonstop flights to Perth, while maintaining regular services to North America, the Middle East, Australia and various destinations around Asia and the Philippines.

PAL generated $776.9 million in revenues for the period, a 66 percent improvement from last year’s $466.6 million, as the number of passengers more than doubled to 3.4 million people.

The company is the only airline operating nonstop flights linking the Philippines to the US and Canada, along with the largest network of flights from Manila to multiple cities in the Middle East, Japan and Australia.

PAL Holdings is the parent firm of PAL and another subsidiary, Air Philippines Corp.