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Aviation History
1980
1980 - 3637.PDF
The new A300 fleet (aoove left) is building a good reputation for reliability, with negligible incidence of technical delays. Above right is seen one of two refurbished One-Elevens delivered to PAL recently, adding to ten already operated. PAL has decided against replacing One-Elevens with 737s domestic route system whose average sector length is under 200 nautical miles. The growth of long-haul operations has been nothing short of phenom enal, in line with the experience of other airlines in the region. Fro-n 1970-79 the number of international passengers carried quadrupled to 724,000 while ca<^city was trebled to 3,300' million available seat-miles. In the more recent 1975-79 period, the number of international passengers doubled while capacity increased by one-third. Domestic operations have shown a more modest growth pattern. Passengers carried increased by just under 100 per cent between 1970-79, to 234 million, while capacity in creased by a similar amount to 1,100 million ASMs. Domestic traffic stag nated in 1979 as a result of fare in creases which were imposed to curb losses on these routes. The increases achieved their intended result, how ever, and domestic services made their first profit for 15 years. PAL, Pke other airlines in the area, is now feeling the effects of recession and increased fuel costs. The airline made a small operating loss in 1979 (equivalent to $600,000) but this was turned into a $1-5 million net profit after other activities were taken into account. Despite the recession, PAL aims to keep up with its current plans for fleet renewal, and investment in new technical facilities at Manila International Airport. Executive vice- president and treasurer Martin Bonoan is the man charged with keep ing the cash flowing smoothly to sup port these ambitious progammes. "We don't expect to place any further new aircraft orders for some time," says Bonoan, as several widebodies have still to join the fleet and be paid for. PAL has obtained its widebodies on very favourable terms. The 747s have been bought under leverage leases—-a complicated arrangement which takes advantage of US tax concessions— yielding effective annual interest rates of 5 to 6 per cent over 15 years. Bonoan has been approached by BAe on re-engining One-Elevens with Pratt & Whitney JT8D-209s, although he doubts whether PAL will take up the offer in the present financial climate. BAe has benefited, however, from Bonoan's financial stringency. Boeing made a determined effort last year to sell PAL some 737s as One-Eleven replacer-.ents. "Shifting to another type now would not be a wise move," says Bonoan, explaining why PAL decided against a 737 purchase and instead added two BAe-refur- bished One-Elevens to the fleet this year. The costs and complication of adding yet another type to the fleet, when the airline's policy is to reduce the 15 different subtypes currently operated, outweighed any economic savings to be gained from operating the 737. Bonoan says that PAL is con tent to wait for another four or five years for a new-technology narrow- body which would offer much greater cost savings over the One-Eleven than the 737. Bonoan says that PAL will stay with its Japanese-built YS-lls "for a number of years," but these may eventually be phased out in favour of more BAe 748s. Unlike other airlines in the area, PAL is in no hurry to sell its DC-10-30s because they are still useful for some of the longer regional overwater routes such as Manila-Tokyo. A key figure in PAL's expansion plans is operations group executive vice-president Robert K. Jorgensen, who is currently on a three-year secondment from Hughes Airwest. Under him are six operations depart ments—flight operations, maintenance and engineering, stations, passenger services, construction and flight co ordination. Punctuality has been one of his major concerns. President Roman Cruz once quipped that "PAL used to stand for plane always late, or sometimes PAL Inc—plane always late if not cancelled." When Jorgensen came to P/vL in January 1979, punctu ality was a real problem. International departures averaged 40 per cent on time while the figure for domestic flights was some 60 per cent. A major effort since then has taken the inter national on-time departure perform ance to 87 per cent and domestic to the "high 80s". The target is 85 per cent. The improvement stems partly from t^e introduction of new aircraft on international services and partly from efforts to stem a brain-drain of skilled personnel. A lot of technically qualified staff, especially on the maintenance and engineering (M&E) side, have been lost to the Middle East, lured away by very high wage rates. "The PAL's training fleet (seen here at the end of a day's flying) is being kept busy on training contracts for other carrier- in the region export of expertise is good for the Philippines but bad for Philippine Air lines," says Jorgensen. The average M&E staff service tenure is just over four years and he would like this to increase to 15 years—various incen tive schemes are being studied which would nersuade skilled staff to stay longer. Jorgensen says uiat PAL appre ciates that there is a worldwide short age of mechanics and engineers—the legacy of the fashion to decry tech nology, which has discouraged young people from acquiring technical skills. One way which development may persuade engineers to stay longer with PAL is a new special big-fan overhaul facility, part of an $80 millic. de velopment programme at the Manila base, which is scheduled for comple tion at the end of next year. This will be set up to handle General Electric CF6-50s, which power PAL's A300s, 747s and DC-lOs. The facility is part of Jorgensen's drive to make PAL technically self-sufficient. Currently, the airline is part of the European KSSU maintenance pool and DCT0 engines are overhauled by KLM. Boeing 747 and Airbus A300 power- plants are overhauled by United Air lines in the US. Jorgensen says that investment in the overhaul facility can be justified for PAL work alone, and outside work will be regarded as a bonus. Lower Philippine labour costs and elimination of transport charges for CF6s sent to Europe or the US will make the project economically sound. Even Singapore Airlines is set ting up its own CF6 facility but Jorgensen thinks that there will be plenty of business in the region for both airlines. The new facility will be capable of handling 85 per cent of all CF6-50 jobs and will concentrate on overhaul of individual modules, rather than whole engines, as these cost less to transport. Like Britain's Caledonian Airmotive (Flight, July 5, page 7), the PAL facility will not handle the CF6-6, but can accept the new -80 series as there is considerable commonality between
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