Action and performance

Lucio “Han” Tan III is truly an “action speaks louder than words” man, letting the financial performance of the various key businesses of the LT Group prove his managerial skills instead of him personally hogging the news and perhaps overshadowing his slew of new professional lieutenants who are helping him run the various companies under the group.

At the start of this month, Philippine Airlines, which is the operating subsidiary under PAL Holdings Inc., reported a 92 percent increase in its net income for 2023, earning P21 billion compared to its 2022 net income of P11 billion.

Lucio, as he now prefers to be addressed, opted to just issue a press release Monday, April 1, instead of holding a press conference. When PAL held a press conference the following day, Tuesday, April 2, to discuss the performance of the airline and its plans moving forward, it was PAL president and COO Capt. Stanley Ng, along with the new key officials of the country’s flag carrier, who spoke to media people while Lucio focused his attention to the other business interest of the LT Group that include PNB Holdings, Tanduay Distillers and Asia Brewery, which are also expected to report soon on their 2023 financial performance.

According to PAL’s OIC executive vice president and general counsel Carlu Fernandez, Lucio remains focused on professionalizing the LT Group and bringing in the next generation to take leadership positions, stressing that the next generation is not limited just to the Tan family alone.

In fact, Atty. Fernandez revealed, “We are training and developing new talent. In PAL alone,we have a bunch of new leaders… the talent we are getting now is amazing…wonderful!”

Among the new recruits of PAL are Anna Isabel Bengzon, formerly from the MVP Group, who was appointed chief financial officer in August 2023; Anne Tiongco, formerly from Victorias Milling Corp., who will take over as the new vice president for communications, succeeding Jose Enrique “Josen” Perez de Tagle who is retiring.

Alvin Miranda, formerly from Mondel?z Bangkok and who was awarded marketing leader of Thailand, was also introduced to the media as the new marketing head of the Tan-owned airline, taking over from Ma. Sylvia Elvira “Ria” Carrion Domingo.

PAL, with Lucio in attendance, actually held Tuesday night an appreciation dinner for the retiring executives of the airline, that aside from Ria and Josen included Lt. Gen. Cesar Ronnie Ordoyo, Capt. James Conner and John Fraser Reid.

New routes

Tuesday’s press conference was primarily to announce PAL’s plans moving forward that would involve a $450 million budget for capital expenditure this year, of which 80 percent would be spent for the refurbishment and reconfiguration of the airline’s 18 existing A321ceo aircraft, and for the payment of some of the nine new Airbus 350-1000 and 13 new A321neo aircraft that the airline ordered, delivery of which is expected to be made starting in 2025 up to 2029.

The A350-1000s are intended to service long-haul routes to North America and other international destinations. The smaller A321neos will service regional routes.

Thus, while waiting for those deliveries, PAL continues to carefully study the new routes it will open, according to Capt. Ng, who stressed the need to ensure “reliability” of serving and completing any new routes that it will open.

For this year, what is firm, Capt. Ng announced, is the start by October of direct flights from Manila to Seattle using PAL’s current fleet of B777-300ER. Likewise, PAL is also studying the revival of flights emanating from Cebu to Osaka, as well as possible flights to Sapporo, keeping in mind certain constraints in the airline’s existing fleet.

Resumption of flights to Europe, Capt. Ng explained, would take much longer as PAL would still have to wait for its current order for long haul aircraft and carefully study the “most promising” new routes or the resumption of old routes to certain European destinations, adding that “it will be a careful and deliberate rollout.”

Aside from the acquisition of new planes and the refurbishing and reconfiguration of its existing fleet, PAL is also undertaking a digital transformation to improve its systems on customer and passenger information and relationship, as well as improve and enhance its management of maintenance operations of its fleet.

PAL, which has already upgraded its Mabuhay Lounge at the Ninoy Aquino International Airport and in Cebu, also plans to upgrade its Mabuhay Lounge in Bacolod, Davao, Cagayan de Oro, and General Santos.

It is also adding more perks and partners for its Mabuhay Miles loyalty program.

Increased passenger traffic

PAL posted a 36 percent growth in flights for 2023 to 105,294 compared to the 77,533 flights it mounted in 2022. The increase in flight activity enabled PAL to carry 14.7 million passengers last year, a 58 percent increase from the 9.3 million passengers recorded in 2022.

The recovery of air travel allowed PAL to register a 37 percent hike in passenger revenues from the P114 billion it earned in 2022 to P160 billion last year. Total net revenues, including cargo and ancillary revenues, grew by 27 percent to P181 billion from P139 billion.