Competition is good. It brings out the best in everyone, and those who will definitely benefit from this competition are the customers. In the Philippines, Philippine Airlines (PAL) has been monopolizing the direct Manila to North America services for decades, flying between Manila to Los Angeles, San Francisco, New York, Vancouver, and Toronto. That ended on October 29, 2024, when United Airlines introduced direct San Francisco to Manila flights. Then, just last December 5, Air Canada announced that it will begin direct Vancouver to Manila flights starting April 2, 2025. At this point, I think this is a wake-up call for PAL North America services to step up to the challenge of improving its game because of the entry of direct competitors on its key routes.
In 2018, PAL was on a roll in improving its services. They acquired new aircraft such as six A350-900s and A321neos, all with modern cabin interiors and seats, improved their inflight services, enhanced their on-time performance, and elevated the overall customer experience. This resulted in PAL North America gaining multiple awards and recognitions from Skytrax, APEX, and Airline Ratings. PAL was named “World’s Most Improved Airline” by Skytrax in 2018, and their cabin crew ranked 11th best out of hundreds of airlines on the list. However, the pandemic led to PAL declaring Chapter 11 bankruptcy in 2021, forcing them to return four of their ultra-modern A350s and some tri-class A330s, leaving them with older planes.
This led to numerous complaints from passengers, who took to social media to rant about paying expensive fares for broken amenities, such as non-working lavatories, broken seats, and non-functional IFEs. The quality of service provided by the flight attendants was often the only silver lining. PAL North America also experienced numerous canceled flights due to a lack of aircraft, brought about by technical issues and insufficient fleet capacity.
At the same time, PAL struggled to expand its capacity due to the lack of aircraft. Supply chain issues for aircraft parts, the grounding of A321neos due to the Pratt & Whitney PW1100G engine recall, and aging planes severely hampered the airline’s recovery. This came at a time when the Philippines’ Department of Tourism was aggressively pushing to increase foreign tourism to the country. This affected PAL North America routes significantly.
A Golden Opportunity for Foreign Airlines
For more than a decade, no North American airline served the Philippines, leaving PAL to monopolize the direct Manila to North America route. Passengers who wanted a direct flight between San Francisco or Vancouver had no choice but to take PAL. However, PAL’s inability to increase capacity due to a lack of A350s and 777s, combined with technical issues and aging planes, created a domino effect that sometimes led to flight cancellations. This fueled demand for more options. North American carriers, long interested in serving the Philippines, seized this opportunity as the Department of Tourism pushed for increased tourism and PAL North America struggles continued.
On October 29, United Airlines began operating direct San Francisco to Manila flights. This gave passengers a new option for this route. United Airlines is currently using their 350-seater 777-300ER jets equipped with Polaris business class seats and United Premium Plus seats, compared to PAL’s 370-seater 777-300ERs with a two-class configuration. However, PAL often deploys older 777s on the route, equipped with outdated cabin configurations. So far, United has become a strong competitor for PAL on this North America route.
On December 5, Air Canada announced that it will begin flying direct Vancouver to Manila flights on April 2, utilizing their 298-seater Boeing 787-9 with three-class configurations. These planes feature 30 business class seats, 21 premium economy seats, and 247 economy class seats. This adds another layer of competition for PAL on one of its key routes, where PAL currently uses 390-seater ex-Garuda 777-300ERs. While PAL has an advantage in greater seating capacity and daily flights, Air Canada’s better customer experience and competitive pricing could shift the balance.
The main complaint of passengers about PAL is its steep fares paired with mediocre service and inflight experience. This has fueled clamor for Delta Airlines to begin Los Angeles to Manila direct flights to give passengers another option. It is important to note that PAL North America flights are its bread-and-butter route, and they must treat it with utmost importance.
PAL’s Path Forward
The future looks brighter for Philippine Airlines in 2025. They are set to begin taking delivery of brand-new Airbus A350-1000s, which will primarily serve North America routes. These new aircraft will provide PAL with a competitive edge against United’s 777-300ER and Air Canada’s 787-9. If PAL follows through with plans to introduce flights to Paris, they may also offer strong competition to Air France’s Manila to Paris direct flights.
For now, PAL remains a strong competitor against United and Air Canada. However, they cannot afford to be complacent or simply wait for the A350-1000s to arrive. Improvements must be made through competitive fare pricing, consistent inflight service quality, and ensuring that all inflight amenities, such as seats and IFEs, are functional. Sometimes, spending more to improve the product is necessary to achieve greater returns. Additionally, I hope PAL carefully considers the seating configuration of the A350-1000 economy class, as a 3-4-3 configuration may be uncomfortable for passengers.
Finally, PAL must aim for a younger fleet with an adequate number of planes to reduce the frequency of AOG (Aircraft on Ground) situations and canceled flights. The 777-300ERs are aging, the A350-900s are heavily utilized, and the A330-300s will eventually need replacements, possibly with A330-900neos or Boeing 787-10s.
PAL must take care of its bread-and-butter North America route. They cannot afford to rest on their laurels, especially as competitors actively exploit their weaknesses. PAL North America routes need constant attention and improvement.
There is no doubt about PAL and rising back again. If they did in in 2018, who said they cannot do it again?