Philippine Airlines celebrates its 70th year (March 15th) by commemorating its storied past while charting a course for the future.
As PAL turns 70, the airline has one eye on the legacies of its past and another on the goals of the future. Since its founding 70 years ago, PAL has been inextricably linked with the Filipino nation as the pioneer flag carrier, major air transport utility and partner in nation-building.
PAL was founded by a group of prominent Filipino industrialists on February 26, 1941. On March 15, 1941, a tiny Beech Model 18 aircraft carrying five passengers took off from Nielson Airport in Makati bound for Baguio –earning for PAL the distinction of being Asia’s first airline.
The flag carrier is bidding to replicate its past success in the more demanding operating and competitive landscape of the future. It faces a slate of tough challenges in this quest.
PAL reported a modest profit of $15.1 million in the third quarter (October to December 2010) of its current 2010-2011 financial year – a period when air travel gingerly recovered from a slump the previous year.
But the succeeding months, from January 2011 to the present, showed just how fragile the recovery was. The sudden eruption of political unrest in the Middle East sent crude oil prices skyrocketing to nearly $120 per barrel in late February – the highest in two and a half years.
This forced the global airline industry to flag a potential loss for carriers by the end of 2011. In fact, the International Air Transport Association (IATA) has already downgraded its outlook for the year.
“Our current forecast is based on an average oil price of $84 per barrel. Today the price is over $100. For each dollar it increases, the industry is challenged to recover $1.6 billion in additional costs… 2011 is starting out as a very challenging year for airlines,” said IATA director general Giovanni Bisignani recently.
