Summary
Highlights
Philippine Airlines (PAL) was founded on February 26, 1941, evolving from the Philippine Aerial Taxi Company established in 1930. Led by industrialist Andres Soriano Sr., PAL commenced operations on March 15, 1941, with a single Beechcraft Model 18, carrying its five founders on its maiden flight. Government investment later led to its nationalization.
PAL services were interrupted during World War II, with its aircraft pressed into military service. Operations resumed on February 15, 1946, with five Douglas DC-3s serving 15 domestic points. PAL refurbished Nielsen Field, making it the official port of entry for air passengers. On July 31, 1946, PAL became the first Asian airline to cross the Pacific Ocean, initiating regular service between Manila and San Francisco by December 1946.
PAL was designated as the country's flag carrier and expanded to Europe in 1947. By 1948, it absorbed other Philippine airlines and moved its base to Nichols Field (now MIA). In the 1960s, PAL entered the jet age with Boeing 707s and Douglas DC-8s for international flights. Under Ferdinand Marcos's 'one airline policy' in 1972, PAL became the sole surviving airline, absorbing competitors and being re-designated as the national flag carrier.
PAL continued its expansion with the Douglas DC-10 in 1974 and saw the introduction of Boeing 727s, Boeing 747-200Bs, and Airbus A300B4s in 1979. A comprehensive modernization program between 1979 and 1981 led to the construction of facilities like the PAL Technical Center and an award for in-flight cuisine. In 1980, PAL's Boeing 747-200, dubbed the 'jumbo jet,' was the first of its kind to fly across the Pacific and featured innovative 'skybeds' in first class.
After a change in leadership, PAL underwent mass modernization of its domestic fleet in the late 1980s. Corazon Aquino abolished the 'one airline policy' in 1988, paving the way for competition. PAL privatized again in 1992, with Lucio C. Tan becoming chairman and CEO in 1995. A $4 billion modernization planned the acquisition of 36 state-of-the-art aircraft from Airbus and Boeing, aiming for the youngest fleet in Asia and expanded route networks.
In 1997, PAL rebranded as 'Asia's Sunniest Airline' and launched services to New York City. However, an ambitious aircraft acquisition coupled with unprofitable routes led to financial instability, exacerbated by the 1997 Asian financial crisis. PAL's operations shut down on September 23, 1998, due to labor disputes, with Cathay Pacific temporarily taking over. PAL resumed operations on October 7, 1998, and gradually restored domestic and international services.
In 2000, PAL returned to profitability after six years of losses, reporting 44.2 million pesos. It handed over its maintenance division to Lufthansa Technik Philippines and launched an email booking facility. The airline continued its recovery, expanding routes and introducing the Mabuhay Miles frequent flyer program in 2002. Despite challenges like the 9/11 attacks, PAL added new routes to Las Vegas, Macau, and China, and modernized its fleet with new Airbus A32214s and electronic ticketing.
PAL was released from receivership on October 4, 2007, and sought foreign investments. It launched regional subsidiary PAL Express in 2008 to supersede Air Philippines, acquiring Bombardier aircraft for regional routes. However, international safety concerns, including a downgrade by the FAA in 2008 and an EU aviation blacklist in 2010, hindered PAL's expansion plans, preventing new routes to the US and Europe.
In July 2010, PAL faced labor disputes, with pilots resigning and potential strikes by other staff. The Department of Labor and Employment approved the layoff of 2,600 employees. On April 4, 2012, San Miguel Corporation bought a 49% stake in PAL for $500 million, aiming to modernize its fleet and strengthen its competitiveness. PAL made a $7 billion order for 54 Airbus aircraft under San Miguel's management.
Under San Miguel, PAL expanded its route network, returning to Abu Dhabi, Riyadh, and launching new routes to Brisbane, Perth, Doha, and Jeddah. It was removed from the EU aviation blacklist in 2013 and launched flights to London Heathrow, its first European destination in 15 years. PAL also planned to expand its US service and explored investing in other airlines, such as Cayman Airways and Cambodia Airlines, to acquire new aircraft and expand its influence.
In September 2014, San Miguel sold its 49% stake back to Lucio Tan's group for $1.3 billion. Jaime Bautista was appointed as the new president and CEO. Under Bautista, PAL deferred A321neo deliveries to avoid overcapacity and sought to replace its A340 fleet with newer Airbus A350 XWB or Boeing 787 Dreamliner aircraft, leasing more 777s for long-haul flights. In 2015, PAL became the official carrier for Pope Francis during his visit to the Philippines and resumed direct flights to New York City via JFK International Airport.
In April 2016, for its 75th anniversary, PAL launched the 'Heart of the Filipino' campaign with new advertisements and a new theme song. It also released a pre-flight safety video showcasing Philippine tourist destinations. PAL continued its expansion, launching new international and domestic routes and acquiring new aircraft, including the Boeing 777-300ER and Airbus A350-900. These efforts led to PAL receiving a four-star rating from Skytrax and APEX and being recognized as the 'most improved airline of 2019' by airlineratings.com.
In January 2019, All Nippon Airways purchased a 9.5% stake in PAL Holdings. However, the COVID-19 pandemic severely impacted PAL, leading to the layoff of 300 workers in February 2020 and the suspension of all domestic and international flights by March 2020. PAL arranged repatriation flights and celebrated its 80th anniversary in March 2021 amidst significant financial losses. In May 2021, reports emerged of PAL considering Chapter 11 bankruptcy due to the pandemic's impact, with a reported 16.6 billion pesos loss in the first half of 2021. PAL filed for bankruptcy protection in a New York court on September 4, 2021, after canceling over 80,000 flights and letting go of 2,300 employees.