This is an academic report submitted to the University as a course requirement for a particular subject.

1. Marketing Strategies and Economical comparison
based on Key Performance Indicators (KPI)
Sahib Jada Eyakub Khan
Course Name: Strategic Marketing in Aviation
Student ID : 2001617
MBA in Aviation Management
BSMR Aviation and Aerospace University

2. Brief History of the Philippine Airlines
 Philippine Airlines (PAL), the national flag carrier is known as Asia’s
first airline.
 Philippine Airlines is known as PAL, a subsidiary of PAL Holdings Inc.
 Founded on 26th February, 1941 by a group of businessman led by
Andres Soriano, one of the country's leading industrialists and former
Senator Ramon Fernandez
 Commenced its operation on 15 March,1941
 On September, 1941 the Philippine government invested in PAL for the
purpose of the airline's nationalization.
 Initially this airline started its journey with a twin-engine, five-seater
Beech Model 18 aircraft from Nielsen airfield in Makati to Baguio and
after the World War-II it had added five Douglas DC-3s.

3. Brief History of the Philippine Airlines
 PAL enters the jet age in June, 1962 with the introduction of DC-8 jetliners.
 The first privatization of PAL held in 1960 and the second or re-privatization
happened in 1990
 The visionary industrialist Lucio C Tan became the Chairman and CEO on
January, 1995.
 The PAL Express which previously named as AirPhil Express is a full-service
and low-cost codeshare partner of Philippine Airlines (PAL). PAL Express acts
as PAL's domestic division, flying to 31 domestic destinations.
 Philippine Airlines (PAL) rebranded as “Asia’s Sunniest Airline” whose main
hub of operation is in Manila and flies to and from 43 international
destinations and 32 points within the Philippines

4. Philippine Airlines Marketing Strategies (4Ps)
Marketing strategies help to reach in a business target and organizational goal.
The Marketing Mix, also known as 4Ps is widely used to achieve strategic
objectives. The 4Ps are Product, Price, Place, and Promotion.
Product Strategy
 Philippine Airlines is a full-service global 4-star legacy carrier.
 Products are seats, cargo, charter service, corporate & group booking,
destination vacation (Swingaround) and hotel accommodation services.
 Airbus and Boeing seats are segmented in different categories like Business,
Premium Economy and Economy class, chef-cooked meals, a wide range of
complimentary drinks, and other privileges
 Philippine Airlines takes domestic passengers through PAL Express, a
subsidiary of Philippine Airlines.
 PAL provides lounge access, washing and freshen up facilities before takeoff
in several international airport terminals.
 Frequent flyers can easily utilize their Mabuhay Miles through online that
they can earn from the Philippine Airlines and of it’s partners.

5. Pricing Strategy
 Pricing strategy is determined by passenger choices.
 Seating choices are categorized as Economy, Premium Economy, and in
Business class.
 In some special cases passenger can chose Neighbor-Free seats
 Some essentials products can be purchased from the Philippine Airlines
official store.
 Upgradation from Economy class to Premium Economy or Business class
seating with different Baggage allowances.
 Passengers earn extra miles for different booking class
 Special meals for Business class and Premium Economy class passengers.

6. Place Strategy
 Philippine Airlines has one major hub in manila and secondary hubs in
Pampanga, Mactun-Cebu and Davao city.
 Philippine Airlines is abled to create a strong connections within domestic
and international cities.
 Airlines has a strong connection with Asia , Europe , North America and
Ocenia.
 Serving passengers 23 countries across the world
 Philippine Airlines (PAL) has transferred its maintenance and engineering
unit to the German-Philippine joint venture Lufthansa Technik Philippines
(LTP)

7. Promotion Strategy
 Mabuhay miles the frequent flyer program is one of the most
attractive promotion programs of Philippine Airlines.
 Miles can be used in partner airlines, hotels and for retails purchase.
 Mabuhay cards are varied as Classic, Elite, Premier Elite, and Million
Miler as well as bonuses.
 Miles can be earned from flights and non-flights ,like dine , drive,
entertainment, lifestyle, logistics and others.
 Offers Promo code for special occasion
 Promotion activities provide through Billboard, Facebook, YouTube
etc.

8. Philippine Airlines Marketing Strategies (Porter Five Forces)
Porter's Five Forces is an analytical framework developed in 1979 by Harvard
Business School professor, Michael E. Porter. It helps investors evaluate a
company based on its position within an industry and the kinds of horizontal
and vertical threats it might face in the future.
Bargaining Power of Buyers
 Buyers are volatile they easily shift one carrier to another for minimum
cost. PAL sometimes offer minimum fare .
 Flyers are buying plane tickets from the airline and agents or online portal.
PAL has all the options so the passenger can get the ticket easily
 Information on flight schedule is available in web and social media.
Passenger can get it easily.
 Byers can browse the flight time and other amenities to decide
accordingly.

9. Bargaining Power of Suppliers
 Philippine Airlines major suppliers are Boeing ,Airbus and De Havilland
 Airlines can’t switch easily to other suppliers because of some
contracts and agreements with existing service providers
 Few suppliers and expertise are in airline industry due to huge costs
 Thus the bargaining power of suppliers in Philippine Airlines has a low
threat as well.
Threat of New Entrants
 As national flag carrier govt. supports this airline
 PAL enjoys low threat in its market because of low switching costs.
 As an oldest airline in Asia and flying experience lower the threat of
new entry
 PAL attracts to it’s loyal passenger by providing better services and the
domestic demand covers by PAL Express which lowers the threat of
entry.

10. Threat of Substitutes
 In particular cases there are substitution of planes like car, bus, train
and ships.
 Some substitutes are costlier and needs a long time instead of planes
 Planes are the fastest transportation save time and cost
 PAL satisfies the demands in terms of time , cost and other services of
this regional flyers
 At short-haul journey consumers choose other means of transports for
the reason of costs that create risks.
Competitive Rivalry
 PAL faces competitive strategy with low cost airlines
 Safety regulations play a major role in airlines industry
 Diverse competitors

11. Philippine Airlines Marketing Strategies (SWOT Analysis)
SWOT analysis of Philippine Airlines analyses its strengths, weaknesses,
opportunities, and threats.
Strengths
 Strong hub in Manila and a trusted airline brand for Filipino consumers
 Oldest Airline in Asia and the Philippine Airlines Aviation School takes
pride in being the first Aviation School in Asia
 Attractive loyalty program
 Strong fleet size with Boeing(10), Airbus(97) and De Havilland (5)
Weaknesses
 Higher maintenance cost for acquisition of new aircrafts and flights
 Losing out market share to LCC carriers or competitive players
 Inadequate Corporate Social Responsibility (i.e. Medical for the public)
 Absence of Research and Development

12. Opportunities
 Increase strong network in international market
 Standard digital services (inflight entertainment, internet etc)
 Attractive tourist places in the Philippine
 Increasing number of the Filipino workers
 Leveraging code share agreements with other airlines and partners
Threats
 Increasing Fuel cost
 Regulatory policies or Govt. intervention
 Natural calamities
 Low fare competitions among the operators

13. Philippine Airlines Marketing Strategies (STP)
Philippine Airlines Segmentation
 Customers prefer to comfortable journey and safety in the sky
 Demographic and social classes
 Income levels
.
Philippine Airlines Targeting
 Age groups (35-45 years of age)
 Medium and Higher income level passengers
 Full service and premium amenities to its passengers
 Attracting the business travellers
Philippine Airlines Position
 Premium brand in the local airline industry
 Ensure best Filipino hospitability

14. Economical Comparison Based on KPIs
Benchmark Analysis of the Philippine Airlines for the Fiscal Year-2019
IATA Code PR
Total Revenue (₱ Billions) 154.54
Revenue Passenger Carried (000) 16761
Ancillary Revenue (₱ Billions) 10.7
Ancillary Revenue P/Pax ₱ 638.39
Ancillary Revenue as a % of Total Revenue 6.92%
Ancillary Revenue Growth from Y2018 (₱ 6.98 Billions) 53.3%
Type of Operation FSLC
World Region Asia Pacific

15. Number of Aircrafts 97
Load Factor 76.55%
Average passenger carried per day 45,907
Number of Round Trips 61,396
Revenue Hours 343,256
As of December 31, 2019, PAL has a total workforce 6,901
In 2019, 18M meals were loaded for the flights 75000
Traffic Revenues (₱ in millions) 9,512.9
Total Comprehensive Loss (₱ Billions) 10.20

16. Salamat