PAL's Tie Up with Japan's ANA not enough to compete in long haul market think tank

PAL's Tie Up with Japan's ANA not enough to compete in long haul market think tank

Philippine Airlines (PAL) has to look at a bigger and stronger strategic partner if it were to cope with tight competition in the long haul market.

In a report, the Centre for Asia Pacific Aviation (CAPA) said the commercial agreement between PAL and Japan's All Nippon Airways (ANA) is a solid first move for the Lucio Tan Group since it regained control last month.

To recall, San Miguel Corp agreed to sell its 49 percent stake in PAL and PAL Express back to the LT Group for over $1 billion.

The partnership between PAL and ANA covers areas such as code share and frequent flyer programs, subject to necessary government approvals. The code share between the two will commence on October 26, with reciprocal frequent flyers programs between ANA and PAL to begin at the same time.

The new code share should significantly improve PAL’s position in Japan, the Airline's largest International market,CAPA said, adding that Japan is a strategically important market for PAL and accounts for about 22 percent of the carrier’s total International seat capacity. 
Japan is PAL’s largest single market based on seats.

Despite the commercial agreement with ANA, PAL will need a much bigger and stronger portfolio of partners and ideally a strategic partner to be successful in the intensely competitive long haul market,CAPA said.

As PAL becomes more visible in the international market and thus more potentially useful to partners, the quest should grow easier,the Aviation think tank said.

CAPA said an expanded partnership between PAL and ANA to cover the US market would also be a "sensible option" for the Philippine carrier.

ANA serves New York as well as other US markets to which PAL has no access, including Chicago, Seattle and Washington Dulles.

PAL plans to fly to New York via Vancouver in Canada in March 2015.  PAL operates a total of 26 weekly Flights to the US, with frequencies to Los Angeles, San Francisco, Honolulu and Guam.

Last year, the Federal Aviation Administration upgraded the Philippines to Category 1 safety rating, allowing local Airlines to mount more Flights to the US.

PAL has codeshare agreements with eight other carriers, namely Air Macau, Cathay Pacific, Emirates, Etihad Airways, Garuda Indonesia, Gulf Air, Malaysia Airlines and Vietnam Airlines.
PAL operates the widest route network among all other Philippine carriers, with 29 domestic and 35 International destinations.

Philippine Airlines Frequent Flyer Partners,
Philippine Airlines Miles Partners,
Airline Partnerships and Alliances,
Philippine Airlines Frequent Flyer,
Philippine Airlines Alliance,
Philippine Airlines Promo Fare 2014,
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Frequent Flyer Miles,

Mohini Porwal [ B Sc]
Trainee News Editor
Philipines Aviation News Editor