Why didn't PAL purchase the Boeing 747-8 Intercontinental?

Philippine Airlines was an operator of Boeing 747 for 35 years. Despite that, why didn't they consider to operate the latest version of the jumbo jet, the 747-8 Intercontinental? The 747-8 is indeed a very beautiful aircraft, way more beautiful than the superjumbo Airbus A380-800. It has a range of 15,000km. It can fit 467 passengers in a 3-class configuration. Why didn't PAL even consider this?

Photo credits: KD Koronakis
In truth, Philippine Airlines DID study the possibility but found it not fit for the airline today despite them operating 747s in the past. Presently, PAL's largest aircraft is the Boeing 777-300ER while the American aircraft manufacturer is pitching their upcoming 777-9X.

There are a lot of factors to consider when choosing an aircraft for the fleet. These include but are not limited to fuel efficiency, price, configuration, maintenance costs, range, cockpit commonality, payload, an airline's present destination, future destinations, airport facilities, and utilization rate. Airlines also consider the passenger profile wherein we have to know what the passengers want, and this includes scheduling of the flights. Another factor is route network. As much as possible, airlines do want to maximize every route, whether the hub would be used as a transit point or a point-to-point hub. There are actually a lot more factors but here are the basic factors as to why PAL feels that the 747-8 Intercontinental doesn't fit the requirement.

First and foremost, fuel is the largest expense of an airline, accounting to about 30%. Let us start there. An aircraft's fuel economy is the very first thing to be considered, and we are looking at fuel burn here. The lower the fuel burn, the better.
Photo credits: KD Koronakis
Let us compare both the Boeing 777-300ER and the 747-8I. The former has a fuel burn rate of 8.49kg/km on an 11,000km sector carrying 365 seats. This equates to 2.91L/100km. The latter consumes 10.54kg/km on an 11,000km sector carrying 467 seats, equating to 2.82L/100km. One may say that the fuel burn of a 747-8I is higher but it carries more passengers. Well that's exactly it, the aircraft has to carry that much passengers in order for the airline to recuperate the higher fuel costs. Not all the time, PAL gets a consistent high load factor. Low season proves otherwise. It will be too risky for PAL to operate a huge aircraft with that number of seats knowing that they cannot be filled up all the time. The higher the load factor, the better.

The Boeing 747-8I is equipped with 4 GEnx-2B67, versus the 777-300ER's twin GE9-115BL turbofan engines. Today, ETOPS certified twin-engine ultra long-range aircraft are the preference of almost all airlines such as the Boeing 777, Airbus A350, Airbus A330, and Boeing 787. The world's largest passenger aircraft, the Airbus A380, was deemed as the future of air travel but that is far from happening already as their operators slowly begin to retire them from service to the point that Airbus ended its sale. There is even no second hard market for the A380 as foreseen by Emirates, the world's largest operator of the A380. Indeed, having two engines is easier on the pockets versus four as maintenance costs are also higher on the latter.

Let us now look at utilization. The more an aircraft is utilized, the better. Airlines hate ramp queens. Instead of becoming an asset, they turn into liabilities. If Philippine Airlines were to have 747-8I, they will indeed be flying these to the United States and Europe. Flying them only to the United States and Europe will make them underutilized though, so they need to be flown to other destinations like Asia and Oceania. Yes we may think that instead of operating two Airbus A330s to Hong Kong, PAL can simply operate just one Boeing 747-8 flight. The question now lies on how will the market respond to lesser frequencies. Many of PAL's passengers do interconnect to other domestic destinations from an international flight, and ease of transfer is also a factor that attracts passengers. Having less frequencies may cause passengers to wait longer hours in the transit hub due to less choice of flight times which may end unsound for them. This may result to passengers taking a low-cost airline with multiple frequencies for both international and domestic routes. Simply put, having more frequencies utilizing smaller aircraft is more sound for PAL's passengers than utilizing big aircraft with less flights frequency. Example, two LAX-MNL flights in a day utilizing Boeing 777-300ER and Airbus A350-900 is more sound than just one Boeing 747-8 flight as it gives passengers more choices. Load factor is another thing to consider if PAL would use a jumbo to short hop destinations just to fully utilize the aircraft. Again, fuel economics.

There are actually a lot of factors why PAL fleet planners do not really see the 747-8I as the aircraft that will fit the requirements of the airline and another factor we see here is future aircraft to be made available in the market. The passenger version of the 747-8I looks bleak with only 36 of them servicing the airlines versus its freighter version. With the upcoming Boeing 777-9X which can carry 395 passengers in a 3-class configuration, it is very unlikely that airlines will even consider reviewing the 747-8I.

Looking at PAL's direction, we do see them operating the Boeing 777-9X and the Airbus A350-1000 as the workhorse for their ultra long-haul flights in maybe the next 10 years. The airline will not let go of Boeing, there will always be a Boeing in PAL's fleet and it will definitely be a wide-body aircraft.

Want a clue? Check out the fleet of Cathay Pacific and see how similar it is to PAL's. Both CX and PR got rid of their 747s. Both don't like the A380, nor did they go for the 747-8I (Cathay Pacific operates freighter versions of the 747-8). Presently, their largest aircraft is the Boeing 777-300ER. After CX orders the Airbus A350-900, PR follows. CX's first A350 commercial flight is HKG - MNL, whereas PR's A350 first revenue flight is MNL-HKG. Both didn't go for the 787 and rather stayed with the A330-300. Currently, CX also flies the A350-1000 and has an order for the Boeing 777-9X. Keep an eye on PAL. The only huge difference between the fleet of both is that PAL operates single-aisle aircraft like the Airbus A321NEO. In reality, PAL's direct competitor is not Cebu Pacific, it is Cathay Pacific!

So will PAL no longer take-in jumbos? Based on our analysis, it is unlikely that they will. Their next large Boeing is most likely a 777X, but we will only see orders after it starts flying and after Emirates gets the very first aircraft. As for now, we can all hope and look forward to the Airbus A350-1000, if PAL fleet planners give it the go signal.

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