Why United Is Against Philippine Airlines Expansion In Guam

United Airlines has lodged a submission with the US Department of Transport regarding Philippine Airlines and its low-cost subsidiary, PAL Express, who are proposing to codeshare on some flights between Manila and Guam. 

united-against-philippine-airlines
United has lodged an objection with the US DOT over PAL’s proposed codesharing deal into Guam. Photo: United News Hub.

What the proposed codeshare about?

Philippine Airlines flies its own aircraft daily between Manila and Guam. It would like to codeshare with PAL Express on a further two flights each week. The arrangement, if approved, would come into effect in March 2020. The simmering dispute has been mentioned in several online publications including Live and Lets Fly

united-against-philippine-airlines
Philippine Airlines wants to codeshare with PAL Express on two flights a week. Photo: Aeroprint.com via Wikimedia Commons.

According to the submission by the parent company of both Philippine Airlines and PAL Express, Air Philippines Corporation (APC), approving the codeshare proposal will;

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“ … enhance competition and improve the options available to travelers and shippers seeking service between the Philippines and Guam.”

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United not buying it

 United isn’t buying this and has lodged a submission with the Department of Transportation, asking them to defer a decision on the APC application. United Airlines said;

“While United is not opposed in principle to APC’s (Air Philippines Corporation) requested authority, United objects to the application to the extent it seeks benefits that are being denied to United and its customer base.”

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A United Airlines spokesperson told Simple Flying;

“With access to more flights at Manila, United would be able to continue to grow and expand our global route network and offer our customers more choice and access to this part of Asia.”

United runs a daily 737-800 direct service between Guam and Manila. It also has a twice-weekly service via Koror. United wants to run some more flights to Manila, but the airport is bursting at the seams and the airline has been unable to acquire the slots and gates needed.

Philippine Airlines getting a good run in the USA

There are no such problems at Guam’s International Airport. Additionally, the Chicago based airline is a little sore that Philippine Airlines has been able to significantly ramp up the number of flights and seats on its Philippines  – US services in recent years.

CH-Aviation reports that Philippine Airlines has increased capacity between the Philippines and the USA by around 33% in the past year. Philippine Airlines is currently flying to Honolulu, Los Angeles, Las Vegas, San Francisco and New York.

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Philippine Airlines has been expanding fast in the USA. Photo: Roderick Eimes via Flickr.

But United (and other US airlines) are severely constrained in what they can do at Manila. It is fundamentally an access and equity issue. There is an argument that the Philippines Government is not acting in the spirit of the bilateral air services agreement between the two countries. United goes on to say in its Department of Transport submission;

“While United has been unable to execute its Manila growth plans, Philippine carriers have increased capacity to the US. Given these facts, United Airlines believes that the slot and airport access challenges it has experienced at Manila must be rectified before the Department approves the APC application.”

In summary

United raises some valid points. Equity and access are important. On the other hand, Philippine Airlines is a small player compared to the US aviation juggernaut. Philippine Airlines has 72 aircraft, flies to 98 destinations and had revenue in 2018 just shy of USD$3 billion. United Airlines has nearly 800 aircraft, flies to nearly 350 destinations and had 2018 revenue of USD$41 billion.

It’s kind of interesting to see the little guy potentially get a break at the expense of the big guy. 

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High Mile Club

Even if Philippine Airlines is smaller, not all customers may want to fly with them, and it would give the airline the ability to jack up the air fares as it’d control the vast majority of travel to Manila.

Granted, Manila doesn’t have much room to expand due to urban sprawl, but since United (or any US carrier) doesn’t directly serve Manila from the mainland, that’s ok. However, ramping up flights to Guam doesn’t sound reasonable aside from trying to take up market share because foreign competition is being denied additional slots.

JVM

Correction: PAL does not fly to Las Vegas anymore; this route was ended in 2012

Paolo

United already has good service to/from Manila through their partnership with ANA (even if they don’t have an explicit codeshare for ANA’s flights).

They’re just being petty…

Cahpek

No, they are not. I am not always in favour of United, but in this case, I think they (United) have a point.

GuamFlyer

United is full of it – they had 4 additional weekly morning flights between Guam and Manila just 2 years ago and gave them up citing lack of demand.

Tom

I flew on Phillippine Airlines AIRBUS A321SL from Ho Chi Minh City to Manila, service is very good I really enjoy the service on a short international flight. I think PAL is expanding very hard on these US routes, longest A350 flying from Manila to JFK and the 777-300ER flying to Los Angeles as well. Overall I think while before United cuts the flights from Guam to Manila before due to a lack of demands, and nowadays the demand is seeking up again connecting the US island to Phillippines which PAL takes the expansion. I think overall when losing a… Read more »