Highlights:
- PAL has placed into service its first A321neo and will take delivery of a second aircraft in July;
- The aircraft, featuring 12 lie flat business class seats, is temporarily being used on short haul routes prior to the launch of long-haul narrowbody operations at the beginning of Jul-2018;
- Brisbane and Sydney will be the first long haul routes for PAL's low density A321neo followed by Delhi, Mumbai and Sapporo.
PAL received its first A321neo at end of May-2018, after several months of delays due to ongoing issues with the Pratt & Whitney engine. PAL's second A321neo is now slated to be delivered in mid Jul-2018 and the airline still expects to receive six of the type by the end of 2018.
All six A321neos PAL is taking this year are all in low density 168-seat configuration, featuring 12 lie flat business class seats and 156 economy seats with seatback IFE. These are all growth aircraft and will be used on long-haul routes of six to eight hours. The remaining 15 A321neos PAL has on order for delivery from 2019 will be higher density aircraft with normal recliner style seats in business and be used mainly to replace A320ceos/A321ceos on short-haul routes.
PAL placed its first A321neo into service on 05-Jun-2018 and has since been operating the aircraft from Manila to Davao and Bangkok. However, these are temporary services prior to the launch of long-haul narrowbody operations. As Blue Swan previously reported, PAL announced on 01-May-2018 that its Brisbane-Manila route will transition on 02-Jul-2018 from three weekly A340-300 flights to four weekly A321neo flights.
PAL launched nonstop flights to Brisbane in Mar-2018, replacing a one-stop service via Darwin with A320ceos. PAL initially planned to launch the new nonstop Brisbane service with A321neos but delivery delays forced the airline to temporarily deploy the larger A340-300. While total capacity to Brisbane will decline by 15% as the A321neo is introduced, the use of A340s on nonstop flights to Brisbane was never considered a permanent solution.
PAL is also planning to start deploying the A321neo on some Sydney flights from Jul-2018. PAL currently operates seven weekly flights to Sydney using three class 309-seat A330-300s. PAL intends to operate a mix of A330-300 and A321neo frequencies for the off peak winter season, while maintaining seven weekly flights overall. PAL plans to restore seven weekly A330-300 frequencies to Sydney later this year for the peak summer season.
"Sydney is seasonal so when the low season starts we can fly the 321neo in Sydney," PAL president Jaime Bautista explained in a 5-Jun-2018 CAPA TV interview at the IATA AGM in Sydney. "When the traffic and the market increase and improves we can fly back the 330."
PAL also has been looking at using the A321neo to mount additional frequencies to Sydney. PAL could potentially operate up to 14 weekly flights to Sydney in 2019 using a mix of A330s and A321neos with the number of flights and the aircraft mix varying depending on the time of year.
PAL is also considering upgrading Melbourne to seven weekly flights using a mix of A330s and A321neos. PAL upgraded Melbourne on 01-Jun-2018 from three to five weekly flights and is currently using A330s on all five frequencies.
The new fleet of six low density A321neos is intended for Australia along with new routes to India and northern Japan. PAL is aiming to launch services from Manila to both Mumbai and New Delhi in Sep-2018, which is also of significance to the Australia market as PAL becomes a new one-stop competitor in the fast growing Australia-India market.
PAL plans to launch Sapporo on Japan's northern island of Hokkaido with A321neos by the end of 2018. This will make PAL a new one-stop competitor in the relatively small Australia-Sapporo market.
PAL has traditionally relied almost entirely on local traffic to fill its Australia flights. However, over the last couple of years PAL has become a more aggressive sixth freedom competitor from Australia, particularly to London, as it has added capacity to Sydney and (more recently) to Melbourne.
The A321neo will enable PAL to offer more frequencies to Australia, which results in improved connections beyond Manila. PAL's total capacity to Australia will also generally increase as the higher number of frequencies offset the use of smaller gauge aircraft. However, on some routes - particularly during off peak times of the year - there will be a decrease in capacity.
Overall PAL's product will improve in Australia as the A321neo is introduced. However, the new aircraft type does have the disadvantages of not having a premium economy cabin and offering limited cargo capacity.
PAL is now able to carry significant cargo in the belly of its A330s from Melbourne and Sydney, providing an important revenue contribution. PAL introduced a premium economy product last year using retrofitted A330-300s; Melbourne and Sydney were among the first routes for its fleet of eight retrofitted A330s.
Mr Bautista told CAPA TV that premium economy has been doing well, particularly in the Sydney and Honolulu markets. "Passengers are now accepting the premium economy seats of Philippine Airlines," he said.
Watch our full interview with PAL president Jaime Bautista below: