The final word –  a last interview with Philippine Airlines’ longtime president Jaime Bautista

Jaime “Jimmy” Bautista this weekend is handing over the reins of Philippine Airlines (PAL) to Vivienne Tan. Mr Bautista is one of the longest-standing airline chiefs in Asia, having served as president of PAL for a combined 13 years.


Highlights:

  • Jaime Bautista is retiring on 30-Jun-2019, ending a second stint as president of Philippine Airlines;
  • Philippine Airlines has renewed its fleet and pursued rapid international expansion since Mr Bautista returned from semi-retirement in 2014;
  • Philippine Airlines also has secured All Nippon Airways as a strategic investor and has been trying to secure membership of a global alliance.

Mr Bautista initially came out of semi-retirement in 2014, when Lucio Tan took back control of PAL from San Miguel, to reassume the position of president. He initially served as PAL’s president from 2004 to 2012, when San Miguel took over and appointed its own chief.

Mr Bautista has worked 40 years for the Lucio Tan Group and has been involved with PAL since Lucio Tan initially invested in the airline in 1992. PAL announced on 24-Jun-2019 that its board had approved the retirement of Mr Bautista effective 30-Jun-2019 and that Mr Bautista is working closely with Ms Tan “for a smooth and orderly transition”.

Ms Tan, which is currently the executive vice president/treasurer and chief restructuring officer, is Lucio Tan’s daughter. Lucio Tan is the CEO and chairman of PAL Holdings, which includes full service regional subsidiary PAL Express, but he is not involved in day-to-day management.

Mr Bautista ends his career on a high note with PAL winning the 2019 Skytrax World’s Most Improved Airline award, which Mr Bautista picked up at the recent Paris Air Show. Fleet renewal and product improvements have been a key component of Mr Bautista’s strategy, leading to the Skytrax award and a 4-start rating which was secured in 2018.

Over the last year PAL has taken delivery of six 295-seat Airbus A350s, featuring premium economy and all aisle access lie-flat business class seats, and six long-haul configured A321neos, which also feature lie-flat business class seats. The A350s have enabled PAL to phase out A340s and add capacity to North America while the A321neos are used to Australia, Papua New Guinea and North Asia. PAL is also about to start taking delivery of short haul configured 195-seat A321neos and later this year will complete turboprop renewal with the delivery of a final two 86-seat Dash 8 Q400NGs.

CHART – The Philippine Airlines Group does not have any more widebody aircraft on outstanding orderSource: CAPA – Centre for Aviation Fleet Database (NOTE: all Dash 8s and some A320s are operated by PAL Express; the inactive Dash 8-Q400NG is temporarily grounded following a hard landing incident)

PAL secured an investment from All Nippon Airways in early 2019, fulfilling one of Mr Bautista’s long-term strategic goals. The airline has not yet succeeded at securing membership of a global alliance, another major objective of Mr Bautista, but the outgoing president remains hopeful this will eventually be achieved.

In an interview with CAPA TV at the IATA AGM in Seoul at the start of Jun-2019, Mr Bautista said: “We are interested in becoming a member of one of the alliances. Right now, we have discussions with one although I think it will really take more time for us to be accepted to an alliance.”

ANA is a member of Star although the 9.5% investment, which comes with a board seat, does not necessarily mean PAL is looking at Star. PAL already had a codeshare and loyalty programme tie-up with ANA but also codeshares with oneworld member Cathay Pacific and three Asian members of SkyTeam (China Airlines, Xiamen Airlines and Vietnam Airlines).

Mr Bautista told CAPA TV that PAL and ANA “are looking at other areas of cooperation like ground handling catering helping each other getting slots in Manila and Japan.” He added that there is no discussion about ANA adding to its investment in PAL Holdings beyond the initial 9.5%.

PAL has talked about potentially having more than one strategic investor, which could help it more with its alliance ambitions. “We may have other strategic partners or strategic investors but haven’t yet discussed this fully on the board.”

In the CAPA TV interview Mr Bautista also talks about the performance of the new A350 fleet, the recent expansion in the North America market, the new A321neo fleet, the new Dash 8 Q400NG fleet, the potential suspension of London, congestion at Manila Ninoy Aquino International airport and the outlook for 2019. The potential suspension of London, which could be replaced with a new service to Paris, was analysed a recently released report from CAPA.

SEE RELATED REPORT: Philippine Airlines: long haul adjustments – first, drop London?

On the six A350s, which were delivered form Jun-2018 to May-2019 and complete the renewal of PAL’s widebody fleet Mr Bautista said: “We are very happy about the performance of the airplane. The New York and Toronto load factors are very encouraging. We hope this will continue.

“The utilisation of the airplane is are one of best utilisations in the world in terms of A350 operations. We are flying this airplane more than 15 hours per day. We are really happy about the performance of this aircraft. Fuel consumption is quite good. It’s very fuel efficient and our passengers love this airplane.”