PAL says it will suspend Seoul-Los Angeles flights
PAL says it will suspend Seoul-Los Angeles flights
MANILA (AFP): Philippine Airlines (PAL) said Saturday it will
cancel flights to Los Angeles via Seoul from Sept. 1 because of
aircraft restrictions imposed by U.S. aviation authorities.
The announcement came two days after the Philippines' national
flag carrier said it was scrapping flights to New York from
September 2 because of "staggering" losses resulting from the
Federal Aviation Administration restriction imposed in 1995.
A PAL statement said however that direct daily flights from
Manila to Los Angeles would continue.
Despite the signing of an aviation treaty between Manila and
Washington for an "open skies policy," the FAA in 1995 imposed a
category two rating on the Philippines.
This means that any Filipino carrier wanting to increase
flight services to the United States cannot do so unless it wet-
leases planes from a carrier authorized by a category one country
like the United States.
When PAL introduced the Manila-New York and Seoul-Los Angeles
flight in 1995, the U.S. government banned the airline from using
its own planes and required it to wet-lease aircraft from a U.S.
carrier, World Airways.
PAL said it had suffered "staggering" losses from this
arrangement because it had to pay for the aircraft, crew,
maintenance and insurance costs and even the salaries of pilots
flying these leased planes.
"The U.S.- imposed category-two restriction serves to benefit
only the U.S.- designated carrier and forces the Philippine
carrier into an insoluble catch-22 situation," PAL said in a
statement last week.
No restrictions have been imposed on U.S. carriers in the
Philippines.
PAL, controlled by ethnic Chinese tycoon Lucio Tan, said
Friday it posted an unaudited 502.85 million peso (US$16.8
million) net loss in the three months to June, compared to a 148
million peso profit in the same period last year.
Revenues rose 13.8 percent from a year earlier to 8.97 billion
pesos in the period, it said in a statement.
The airline said operating expenses rose 23 percent, mainly
due to "higher lease charges and advertising and publicity
expenses," while other expenses also climbed.
The airline has been losing for the past 10 years and hopes to
break even in 1999.