Legacy carrier Philippine Airlines (PAL) is “doubling” its capital expenditures (capex) for 2023 from the year prior, as it focuses on improving its brand image while increasing the number of operating jets this year.
At the media launch for PAL’s 82nd anniversary, PAL President Stanley K. Ng said the company is investing “significantly” in improving its assets, namely the Mabuhay Lounge, a new office, as well as the upgrades and maintenance of its existing fleet.
It is also reactivating seven of its parked aircraft to end 2023 with a fleet of 75 working jets. This, he said, requires a “huge investment,” but PAL is determined to increase its capacity, leveraging the increased demand for travel.
“The capex might be almost double because of the all the improvements that we want to invest in, including system upgrades, customer relationship management systems,” Ng said.
He did not disclose an absolute figure for both actual capex spend in 2022 and the forecast capex for 2023. He noted, however, that the outlays are already funded this year.
PAL is also optimistic about the prospects of turning a profit in 2023, with Ng saying that the results of the first quarter were positive.
“The first quarter is looking good. We are optimistic [about the full year of 2023],” he said, adding that average load factor for its domestic operations reached 85 percent, while its international operations were at 80 percent.
PAL is leveraging the growing demand for travel, now that government in territories that it operates are relaxing pandemic-related restrictions.
The airline is introducing new services to Perth, Australia and is resuming its flights to destinations in China.
“We expect that flight frequencies will increase and we will create stronger connectivity locally and internationally,” Ng said.
He noted that PAL’s complete recovery from the pandemic, in terms of operations, will be far off to as late as 2028.
PAL used to have a fleet of 98 aircraft, but it had to let go of some of its planes following its restructuring in 2022.
“The Philippines is emerging as one of the highest growth markets. There are so much opportunities. The idea is to really grow back the network slowly but surely,” Ng said.
This means that PAL will achieve its 2019 level of aircraft in operation by “2027 or 2028” as it takes delivery of 13 more Airbus A321s through 2026.
It plans to also “revisit” its order and might “add” more wide body orders, specifically Airbus A350-1000s.
Ng said PAL will firm up its new order “maybe within the month or next month.”