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Philippine Airlines Marketing Strategy

Philippine Airlines is the flag carrier of the Philippines. It aims to provide safe, reliable, and cost-effective air travel. However, it has faced financial difficulties in recent years, recording losses from 2018-2019. The COVID-19 pandemic has further impacted the airline, reducing passenger traffic to near zero and forcing workforce reductions. Moving forward, Philippine Airlines aims to pursue strategies to increase market penetration and product development, targeting both domestic and international routes as travel restrictions ease. Ensuring passenger safety will also be a priority as the airline works to rebuild operations amid the ongoing pandemic.

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Lester Mojado
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3K views10 pages

Philippine Airlines Marketing Strategy

Philippine Airlines is the flag carrier of the Philippines. It aims to provide safe, reliable, and cost-effective air travel. However, it has faced financial difficulties in recent years, recording losses from 2018-2019. The COVID-19 pandemic has further impacted the airline, reducing passenger traffic to near zero and forcing workforce reductions. Moving forward, Philippine Airlines aims to pursue strategies to increase market penetration and product development, targeting both domestic and international routes as travel restrictions ease. Ensuring passenger safety will also be a priority as the airline works to rebuild operations amid the ongoing pandemic.

Uploaded by

Lester Mojado
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
  • Executive Summary
  • Situation Analysis
  • Objectives
  • Strategies
  • Tactics
  • References

Philippine

Airlines
MARKETING
PLAN
Submitted to:
Sir Edwin Agujetas

Submitted by:
Lester D. Mojado
BSTM – 3rd Year
Executive Summary

Philippine Air Lines also known as PAL, is the flag carrier and national airline of
the Philippines, headquartered in the Philippine National Bank Financial Center in
Pasay City. Philippine Airlines maintains aircraft with the highest degree of
airworthiness, reliability and presentability in the most cost-effective manner; and
conduct and maintain safe, reliable and cost-effective flight. It continues to achieve on-
time performance on all flights it operates, as well as providing safe, on time, quality and
cost effective in flight service for total passenger satisfaction.

Philippine Airlines is performing well above average in the Philippine airline


industry. It significantly indicates that the company has a strong internal position. This
means that PAL has an above-average-ability to respond to external factors that could
affect the operations of the company. Also, PAL has a strong competitive position in the
market with rapid growth thus; it needs to use its internal strengths, take advantage of
external opportunities, overcome internal weaknesses, and avoid external threats to
develop a market penetration and market development strategy. This can include
product development, integration with other companies, and acquisition of competitors.
On the other hand, PAL still has to improve itself with regards to the critical success
factors.

Philippine Airlines carried 1.73 million domestic passengers on 2018, up from


1.26 million passengers in 2017. Meanwhile, international passenger traffic grew 10.3
percent in 2018 to 26.86 million from 24.37 million in 2017.  Of the total, domestic
airlines carried 14.43 million passengers, while foreign airlines flew 12.42 million
passengers.  PAL was the number one airline in the international market with 7.44
million passengers last year, up from 6.88 million passengers in 2017.  Cebu Pacific
came second with 5.02 million passengers last year, up from 4.74 million in
2017. Philippines Air Asia and PAL Express flew 1.72 million and 250,977 passengers,
respectively.
The biggest challenge of airlines is the absence of revenue, from 1 million
passengers in January for PAL, to about zero in April. Even before Covid-19, PAL has
already been undergoing financial difficulties. Its holding firm recorded a 147-percent
jump in its net loss to P10.6 billion in 2019, from a P4.3-billion loss in 2018. It was the
third year of losses for the pioneering flag carrier. Those losses, along with lowered
revenue due to Covid-19, forced the airline to cut up to a third of its workforce, or
around 2,700 jobs, as the aviation sector continues to suffer from pandemic-driven
travel curbs. The Southeast Asian nation's carriers, which halted operations in mid-
March as it is imposed one of the worlds’ strictest and longest coronavirus lockdowns,
are slowly ramping up operations. The collapse in travel demand and persistent travel
restrictions on most global and domestic routes have made retrenchment inevitable.
PAL is running less than 15 percent of its normal number of daily flights eight months
after the Philippine government imposed travel curbs.

Recommended strategy for Philippine Airlines is Product development strategy


this includes providing more services to attract the customer as well as improving the
products and services that they offer to gain more profit and to satisfy the customers.
Many airline companies offer lower fares to gather customers. I suggest that PAL focus
on differentiation by making their customers experience the “class” of flying to remind
them the pleasure of taking flight in the skies. This strategy will require extensive
employee training in proper etiquette and quality service, to ensure the portrayed brand
image lines up with the experience of customers. Second to our priority is increasing the
number of salespersons, increasing advertising expenditures, offering extensive sales
promotion items, or increasing publicity efforts to enhance market share especially for
the local flights.

In order for the Philippine airlines to hold and maintain its position in the industry
the company should pursue strategies focused on increasing market penetration and
product development. It should also maximize revenue generation in passenger and
cargo sales through increased yields by diversifying market segments and efficient
management of seat inventory and cargo space. It will also likely begin the
reinstatement of trunk domestic routes and depending on travel restrictions, possibly
international markets. Targeting foreign business travelers for conference, work or
training and foreign tourists.

Passengers will also be given options to make them feel more comfortable when
flying. Giving them good options for safe travel. Airplane cabins should offer choices
with social distancing for passenger’s choices and safety. The CAB [Civil Aeronautics
Board] will not allow airlines to raise prices. PAL should work within the current fare
levels, charging different prices for promo and for regular seats in different cabins. The
goal is to fly both economically and safely.

Situation Analysis

Philippine Airlines provides a customer centered services with innovative facilities


that strengthen the company’s total image. It offers services towards global excellence
and provide safe, on time, quality and cost effective in-flight service for total passenger
satisfaction. The company’s human resources is hospitable, approachable, caring and
friendly that easily response to the needs of its customers. They are fully committed to
the goals and objectives of the company. Through diverse destinations the company
continues to augment its market share on the airline industry in the Philippines. It brings
you the appropriate destinations that customers want without sacrificing effort, time and
money. The rates offered by the Philippine Airlines are considered competitive and
attractive to its target market. The fare is wise enough to correspond to the services and
facilities that it offers. The company continues to conduct & maintain safe and reliable
flight operations.  The welfare and protection of the passengers is one of its priorities
that is why they maintain a descent records with regard to the security of its
passengers. PAL will be 79 years in existence in February 2011, it is considered to be
one of the oldest domestic airlines in the country and is named as the “National Airlines
in the Philippines”. Being in existence for so many years the company has positioned
itself as one of the leading airlines in the Philippines.
The airlines acquires new aircraft and flights to meet the demands of its
passengers that is why it has higher maintenance cost compared to other domestic
airlines. Due to pandemic, the flag carrier operator saw its passenger revenues for the
quarter go down by 80% to P6.30 billion. The company’s cargo revenues declined
23.5% to P1.84 billion, ancillary revenues dropped 87.5% to P338.25 million, and
revenues from its other business segments decreased 52.1% to P2.05 million. The
company lacks innovative promotion and marketing efforts that could maintain and
attract new passengers. Compared to other leading domestic airlines, PAL’s promotion
and marketing effort is considered weak.

Since PAL offers international destination, an increase of international market will


probably increase its revenues. PAL may increase its destinations domestically or
internationally depending on the existing demand of passengers available. It has been a
big trend for large companies to have a research and development department. PAL
airlines may have a R&D department that will develop new programs and strategies for
the company Due to advancement of the technology nowadays the company may utilize
it as one of its competitive advantage to other domestic airlines. Development of new
technologies changes the existing culture of the airline industry such as in booking,
ticketing, and reservations. People use internet worldwide and a great way of
communicating is through the web, utilizing the internet could expand the reach of PAL
to its potential passengers. This could help the company to attract new customers and
update the current situation of the company. Environmental awareness has increased
due to the effects of the COVID-19 that threaten the lives of many people. The Airline
industry could innovate planes that are environment safe and friendly to respond the
need for passenger’s safety. Providing safety measures like temperature checks and
sanitation at all times.

COVID-19 has significant impact on the airline industry. Global economic


downturn means less demand for air travel that lead to a possible loss for the airline
industry. There has been a stiff competition in the airline industry in the Philippines.
Moreover, threats also increase due to the emerging substitutes and new entrants. New
regulations for the airline industry could possibly hamper its operations. Thus, these
may lead to a decrease in the industry’s revenue. Fortuitous events such as
earthquakes, volcanic eruptions, weather disturbances, pandemics and other diseases
may impede the company’s operations. Increasing problems due to COVID-19 can lead
to a decrease in travel operations of Philippine Airlines due to strict implementation of
rules before travelling.

OBJECTIVES

1. To accommodate the needs of the people for better transportation, security and
other related services.
2. To ensure the safety of passengers and crews before and after flight.
3. To bring back the employees that were affected by the cost-cutting measures.
4. To create a department preferably a Research and Development Department
that would be responsible for generating innovative concepts and ideas to cope
up the revenue loss.
5. To improve the company’s effectiveness in promotions and efforts.
6. To be involved in the activities of the society that would contribute for a better
society and safe environment.
7. To invest in an digital technology that will easily detect those who have
symptoms of COVID-19 and to ensure the safety of passengers.

STRATEGIES:

A. Services

 Safety
Mandatory wearing of face masks and face shields. Mandatory temperature
checks, use of foot baths, and disinfection/sanitation facilities. Mandatory physical and
social distancing and minimum contact at all times at the airport and on board the
aircraft.  Philippine Airlines shall do its best to observe social distancing measures
inside the aircraft, subject to space availability. Family members and individuals
travelling together as part of the same household may still choose to be seated
together. Mandatory public safety announcements. Strict compliance on safety
procedures in handling of (suspected) ill passengers on board, which include keeping
the last three rows of the plane vacant as isolation area. Regular sanitation and
disinfection of airline facilities and equipment. Daily first aid stocks available on board
the aircraft.

 Text Center for reservations only

Due to the advancement of technology many discoveries and inventions has


been contributed to the world to meet the wants of many people. One of the technology
output is through the invention of mobile phones and other communication devices. The
company could use a Text center for reservations only that provides a 24/7 services via
SMS/call to continuously serve its customers by answering their queries and questions.
In this way, passengers and crews can avoid person to person communication.

 Provide a PAL SHUTTLE BUS

To enhance convenience and customer service, PAL may provide a shuttle bus
that will bring passengers especially the OFW’s who are going to quarantine from the
airport to their chosen hotels within Pasay, Makati and Manila areas for a fixed price per
person. This is available to all PAL passengers who will stay at hotels after their flights
ensuring that there will be sanitation before entering the bus and strict implementation
of social distancing.

B.      Promotions

 Advertisements
PAL could use the Internet through social media for advertisements, for the
exposure of their promos and events. Giving discounts to loyal customers and vouchers
to first time passengers. PAL has been named among the Top 10 safest airlines amid
the COVID-19 pandemic and is strictly implementing "new normal" health and safety
protocols to ensure that passengers are protected as they travel with PAL. Rebooking
will be free if made 7 days prior to departure and must be on the same booking class.

 Billboards

As a way of advertising products the company could put up billboards along places that
are centrally located at the metropolis like in Luzon, specifically Pasay and Makati,
Cebu City for Visayas and Davao City for Mindanao with images showing that they are
safe to travel with Philippine Airlines.

C.  People

 Recognition of Outstanding Employees

As a way of giving back to the company’s employees for their hard, excellent and
dedicated work, PAL should bestow incentives to the appropriate individuals who
deserve this type of recognition. This can boost the employees’ morale and encourage
them to have better performance. 

 Research Team

Develop a team that can provide ideas on how Philippine Airlines can recover
from their revenue loss due to pandemic. Creating programs that can help bring back
the workforce of PAL.

D.      Positioning

 New Tagline
The tagline that will emphasize customers are assured of safe world class
services that will satisfy them. The company will be sensitive to the needs of the
customers and respond to those needs with accuracy and brilliance. As the most trusted
aviation company, PAL continues to maintain safe, reliable and cost-effective flights.

TACTICS

 Provide masks, shields and alcohols before entering the airlines. To strictly
implement the COVID protocols.
 Investing into the latest technology. To provide customers’ needs by upgrading
online services and improving 24/7 services via SMS.
 Investing into shuttles/private cars. Offer additional services by giving the
passengers the convenience of having a private bus/car that will transport to their
hotels within Metro Manila for an additional charge of Php 200 per person.
 Develop new advertisements and promos. Offer 10% discounts at different
seasons in various packages as their promotion.
 New image on billboards. To increase awareness on the “New Normal Flight” of
Philippine Airlines.

 Seek out and retain staffs and crews to boost their morale and encourage them
to have better performance despite of the pandemic.
 Hire a Research Team. To develop a program that will gain again the trust of the
loyal passengers to boost again the sales of the airline.

 “With us, you are Safe”. Creating a new tagline to bring back the trust of
passengers and ensuring them that they will have a virus free and safe flight.
REFERENCES

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%201.73%20million,1.26%20million%20passengers%20in%202017.
[Link]
coronavirus/[Link]
[Link]
AL_Strategizing_for_the_Future_of_Asia's_Pioneer_and_Sunniest_Air_Transporter
[Link]
[Link]
q1-pain/745045/
[Link]
cushion-pandemics-impact-on-operations
[Link]
unveils-safety-measures/
[Link]

Common questions

Powered by AI

The COVID-19 pandemic drastically affected Philippine Airlines' operations and financial standing, with passenger revenues plummeting by 80% in a quarter . The pandemic forced PAL to retrench up to a third of its workforce due to severe travel restrictions and decreased demand for air travel . The airline operated at less than 15% of its normal daily flights eight months post-lockdown, highlighting its struggle to maintain operations amid the pandemic-induced downturn . These financial challenges were compounded by existing losses pre-pandemic, emphasizing the need for strategic cost-control measures .

Philippine Airlines can leverage its brand recognition and historical significance by emphasizing its long-standing reputation as the national airline of the Philippines, existing for over 79 years . This historical value can be utilized in marketing campaigns to enhance customer trust. By adopting a customer-centric approach and offering superior in-flight services that emphasize safety, reliability, and quality, PAL can strengthen customer loyalty . Emphasizing safety through strict COVID protocols and innovative promotions, such as loyalty discounts and rebooking flexibility, can also attract repeat customers . Introducing a new branding tagline focusing on safety and world-class services can further solidify its market presence and connect emotionally with passengers .

Philippine Airlines faces challenges maintaining a competitive position due to increased competition, the potential for new entrants, and the introduction of substitutes in the airline industry . External threats also include evolving regulations and environmental concerns impacted by COVID-19 . To address these challenges, PAL should continue focusing on differentiation by enhancing the customer experience, such as providing premier flying services and ensuring safety measures . To maintain competitiveness, PAL may also expand both domestically and internationally based on demand, leveraging increased market opportunities from its status as the national flag carrier . Investing in innovative promotions and new technologies could further help PAL maintain its competitive edge and adapt to evolving market dynamics .

Establishing a Research and Development (R&D) department could significantly enhance Philippine Airlines' strategic objectives by fostering innovation and enhancing adaptive capabilities . An R&D department can develop new programs to recover from revenue losses caused by the pandemic by creating efficient operational strategies and innovative customer-oriented services . It can aid in identifying emerging trends and devising competitive responses to market demands, thus improving product development and differentiation . Additionally, an R&D team can work on integrating new technologies in operations, ensuring PAL remains competitive by leveraging technological advancements in passenger and cargo management . By aligning innovation efforts with strategic goals, R&D could improve operational efficiencies and contribute to achieving long-term financial sustainability and market share growth .

Customer-centric innovation is crucial for Philippine Airlines to maintain competitive edge by offering differentiated, value-added services that meet evolving consumer expectations . By focusing on personalization in-flight services and enhancing comfort measures, such as offering customized in-flight seating arrangements and improved sanitation practices, PAL can attract customer loyalty . Efficiently utilizing technological advancements like digital reservation systems and contactless service options aligns with customer preferences for safety and convenience amid the pandemic . Additionally, fostering feedback mechanisms can drive continuous improvement and innovation in service delivery, ensuring alignment with customer needs and market trends . Such innovation sustains competitive differentiation through customer satisfaction, thereby potentially increasing market share and improving financial outcomes .

Improved marketing and promotion efforts could aid Philippine Airlines' financial recovery by increasing brand awareness and customer engagement, leading to higher sales volumes . By leveraging social media and internet-based platforms, PAL can enhance its reach and efficiency in communication, ensuring timely and engaging promotions . Developing compelling advertising content, including safety protocols and special offers, such as rebooking flexibility and loyalty discounts, can attract new and returning customers . Strategic billboard placements and recognizing employee contributions can enhance community presence and internal morale, indirectly contributing to enhanced service quality . Repositioning efforts using targeted advertising and differentiated branding can highlight PAL's value proposition and help reclaim market share lost during the pandemic downturn .

Philippine Airlines should address environmental sustainability by innovating to create eco-friendly operations, which could involve using more fuel-efficient aircraft and implementing strict waste management protocols . On the health front, the airline needs to ensure passenger safety amid COVID-19 by enforcing rigorous health protocols, such as mandatory mask-wearing, social distancing, and regular disinfection of facilities . Introducing technology to monitor and detect health symptoms could reassure passengers and improve trust . Sustainability efforts should align with global standards, actively participating in environmentally focused initiatives and reporting progress transparently. Moreover, creating sustainability partnerships and engaging with stakeholders to improve corporate responsibility can assist PAL in maintaining social and regulatory compliance . Addressing these aspects proactively positions PAL as a responsible leader in the airline industry, potentially improving customer loyalty and attracting environmentally-conscious passengers .

The product development strategy for Philippine Airlines carries several potential benefits, including revitalizing customer interest and improving competitive positioning through enhanced service offerings that focus on customer experience differentiation . This strategy can tap into new market segments, especially aiming at business travelers and tourists, which could significantly boost revenues once travel restrictions ease . However, the associated risks include the potential high cost of extensive employee training and potential misalignment between service expectations and delivery if the portrayal of premier service levels is inconsistent . Further, maintaining a balance in pricing strategy to avoid alienating price-sensitive customers is crucial, especially with the CAB regulating fare levels . Ensuring marketing and communication effectively convey the revamped service value will be vital to overcoming these risks, emphasizing consistent quality and reliability .

Technology plays a crucial role in enhancing customer service and operational efficiency for Philippine Airlines. By utilizing digital platforms, PAL can offer services such as a Text Center for reservations, which provides 24/7 service and minimizes the need for person-to-person communication . This technological adaptation would improve customer service experience and operational efficiency by streamlining communication and helping manage resources better. Furthermore, investing in digital technology to detect COVID-19 symptoms will ensure passenger safety, addressing current health concerns and potentially increasing customer confidence in flying with PAL . The advancement in booking and ticketing systems through internet use could significantly extend PAL's market reach and attract new customers, providing an operational edge over competitors .

Philippine Airlines should focus on market penetration and product development strategies. This could include differentiating their services to enhance customer experience, such as training employees in proper etiquette and quality service to uphold the brand's image . Additionally, increasing advertising expenditure, offering extensive sales promotions, and targeting foreign business travelers and tourists can enhance market share . To address financial challenges, PAL can diversify market segments and manage seat inventory and cargo space more efficiently . They should also maximize revenue generation in passenger and cargo sales by charging different prices for promo and regular seats while working within current fare levels .

Philippine Airlines MARKETING PLAN Submitted to: Sir Edwin Agujetas Submitted by: Lester D. Mojado BSTM – 3rd Year
Executive Summary Philippine Air Lines also known as PAL, is the flag carrier and national airline of the Philippines, headq
The biggest challenge of airlines is the absence of revenue, from 1 million passengers in January for PAL, to about zero in A
reinstatement of trunk domestic routes and depending on travel restrictions, possibly international markets. Targeting fore
The airlines acquires new aircraft and flights to meet the demands of its passengers that is why it has higher ma
regulations for the airline industry could possibly hamper its operations. Thus, these may lead to a decrease in the i
Mandatory wearing of face masks and face shields. Mandatory temperature checks, use of foot baths, and disinfection/sanitatio
PAL could use the Internet through social media for advertisements, for the exposure of their promos and events. Giving disco
The tagline that will emphasize customers are assured of safe world class services that will satisfy them. The compa
REFERENCES http://driftwoodjourneys.com/philippine-airlines-flag-carrier-of-the-philippines/ (http://driftwoodjourneys.com/ph

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