Gulf Air’s additional Philippine flights, a midnight deal?
While all of you are busy campaigning online or offline for your candidates, there’s a midnight flight that’s not being noticed. You have to thank these journalists for keeping an eye on them, like Neal Cruz on As I See It.
And if you’re currently doing an mba, behind this drama presents a good strategic management discussion. Of course, you might have to include busines ethics if indeed this is a midnight deal. Read on and you’ll know why.
What’s the current chika? It is about Bahrain’s Gulf Air adding extra flights to the Philippines.
Bahrain’s Gulf Air already has 14 flights a week to Manila. They want it increased to 21 flights per week. According to the article, the Philippine negotiators are in a hurry to sign the deal before they leave office this June, daw.
What do you say? Swak sya na midnight flight, di ba?
The article says: the additional flights is of no benefit to the Philippines, instead, it could destroy the viability of Philippine carriers. The fact na an-liit-liit nang Bahrain, whose population eh 490,000 lang, bakit daw mega-ask sila for more flights?
Imposible naman daw na its for the Overseas Filipino Workers because there are only about 21,000 doon dahil nga the present 14 flights already translates to 210,000 seats a year. Eh kahit na daw mag-reunion pa ang mga OFW na to inside the plane, sobra sobra pa ang flights to accommodate them all in a year.
Imposible naman daw na it’s the tourists because the number of Bahraini tourists in the Philippines are negligible.
So, ano? Ano daw ba talaga Madam Auring?!
According to the paper? Its the lucrative European and Middle Eastern routes.
Gulf Air has existing flights from various European and Middle Eastern cities to Asian cities, including Manila, and vice versa. With a big number of seats available, Gulf Air will have enough seats for passengers that it can poach from other airlines, passengers that should normally go to Philippine carriers. Gulf Air attracts passengers by offering abnormally low fares. It doesn’t matter if its fare rates make no business sense because it is subsidized by its owners. The airline’s ultimate goal is to eliminate competition. Gulf Air and other Middle Eastern airlines have been very successful in cornering the Philippine market. In 1997 when Gulf Air had only one weekly Bahrain-Manila flight, the Philippines was a major destination for Europeans. There were eight airlines flying from Europe to Manila, offering 39 flights a week. But as Middle Eastern airlines made inroads in the Philippine market, one by one the European carriers abandoned Manila. This year, even as Gulf Air flies 14 times a week, there is only one European airline remaining (KLM) offering just seven flights per week. Expect KLM to pack up and leave the Philippine route if Gulf Air gets 21 flights per week. With no direct flights from Europe, the alternative is the circuitous route to be offered by Gulf Air that includes a stopover in Manama. This will have an impact on Philippine tourism and business. Without direct flights, passengers wanting to fly from Europe to the Philippines will have to make a “transit connection”—getting off the airplane at a hub airport like Bahrain in the middle of the night, halfway through a long journey—to wait a few hours before boarding another plane bound for Manila. Would you do this if you are a German, Dutch, British or French tourist? Will you endure a stopover in the Middle East, and pay more for it, just to visit the Philippines, when you can more easily take cheaper nonstop flights to other tourist havens like Thailand, Singapore or Hong Kong? Of course not. The Philippines could become uncompetitive as a tourist destination. The same can be expected of European businessmen. They will consider in their business decisions the long, inconvenient and expensive route to and from Manila. At the outset, the Philippines is already at a disadvantage as a business destination because it is two to four hours farther from Europe than Malaysia, Thailand, Singapore, Hong Kong and China. Adding more hours for transit connection will be the last straw for these European investors who are likely to scratch the Philippines from their investment destinations. With no clear benefits to the Philippine economy and tourism, and with the threat that the additional flights will pose to Philippine carriers, why are our negotiators so eager to renegotiate the RP-Bahrain air agreement? This would be the fifth What’s the rush? Are our outgoing negotiators providing for their future?
air negotiations with Bahrain in eight years.
Read the rest of this story written by Neal Cruz: RP-Bahrain air talks another midnight deal?
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reynz is one Uragon and a Filipino-American, has many years of public accounting & auditing, broadcast investments, housing tax credits and equity investments as his background. Based in the US, he maintains his personal and humor blog at reyna elena dot com. A graduate of Aquinas U, he went to GWU and Temple U in the United States.
Not sure how much a direct flight from europe to other South East Asian countries pero middle eastern airlines are usually cheap. Kaya nga ang daming sumasakay sa kanila eh kasi ang mura-mura nila. Kahilt mag-stop over na lang yong iba kung mas malaki naman ang kamurahan. Sa Qatar Airways nga pag galing sa Europe, daming pasahero going to SEA. Dati nga noong 1 flight per day lang sa Doha-Manila, ang hirap mag-book ng flights dahil laging fully book sa mga european tourists.
In the end cheaper flight pa rin ang preferred ng marami. While some people prefer direct flight – kung much expensive naman – hindi rin effective na pang-attract ng tourist. Ang turista kasi value for money pa rin ang hanap. Anyway, maganda naman sked ng middle eastern airline – maiksi lang ang mga lay-over nila.
and i think yan ang argument nang author. the fact na subsidized sila, so they can offer very very low price which is an unfair advantage sa mga ka-kompetisyon. ang eventuality nito, baka gumib-ap ang Philippine carriers because they would not even be able to compete.
Perhaps it’s time to reshape the way we do business in the Philippines to be competitive with the rest of the world… which in turn means more lucrative job opportunities for business and management experts like you, Ateng. Psst, pengeng libreng ticket if ever ha, hehehehe.
Well, in a way, if you look at it, there’s Cebu Pacific, there’s Asian Spirit, I mean, these budget (or are they?) airlines won’t be able to compete and grow with the likes of Gulf Air who obviously have like a black hole of monies on their reserve.
Regardless of who owns Cebu Pacific or Asian Spirit, the government must protect yong fair field in competition eh pano na ako? Reyna Airlines is coming up pa naman, hirap kamo lumipad nang parating walis!
PAL has no flights to middle east and europe – pero meron silang code share flights sa Qatar Airways to Doha. Mas affected dito ang ibang airlines pero the article was saying – wala ng direct flight to europe so ano pa yong papataying business.
I don’t know how airlines priced their fares pero it’s typical for any airline to offer cheap fares pag hindi direct flight. Dito for example, emirates vs. qatar airways going to manila, minsan nag-eemirates talaga ang iba kasi umaabot ng $400 ang difference ng flight to Manila. Ganun din sa mga katabing countries, they take QA kasi much cheaper than direct flights. And if you are a family of six (6), that’s big savings. Can’t really say if that pricing is because they are heavily subsidized. But the feedback from my colleagues from Europe and US, mas maganda daw ang mga middle eastern airlines kesa sa mga US airlines.
“wala ng direct flight to europe so ano pa yong papataying business.”
effective nga kasi ang business strategy nung Gulf Air eh. but what’s behind this strategy is what? bakit gusto nilang mag-dominate sa air skies given na andami na nilang pera and subsidized pa sila nang government nila? right? that’s the bigger question. an sabi kasi sa article – or at least i’m reading na wez na nila kelangan ang pera. as in – ok, is this political? religious? hahaha! i honestly doubt if this is still business in so far as Gulf Air is concerned
It is business. Bago lang naka recover ang Gulf Air from big losses. This company has responsibilities to its investors the same way our elected officials have responsibilities na protektahan at isulong ang interest nating mga Pilipino. I will not blame this company, I will point a finger to our elected officials who failed to protect our interest…and the people who support incompetent officials.
It reminds me of WalMart strategy. Walmart wants to dominate the retail area so it engages every competition in price war. Eh diverse ang Walmart kaya kahit ibenta nila ang groceries nila ng palugi, may pangontra silang other items… And they can do this hanggang sa malugi at di kayanin ng ka kumpetensya at bumigay na lang. Then they can do what they want.
The concerned officials of our country should have forseen this long time ago.
True, and Bahrain is the poorer relatives of Kuwait, Qatar, UAE and Saudi. Paubos na rin oil nila so they are shifting to other business.
Sana noon pa, na-protect yong other airlines.
Gulf Air (GF) has its hub in Manama, Bahrain. Previously, there were flights originating from its GCC co-owner countries. Abu Dhabi-Manila, Muscat-Manila, Doha-Manila.
Since the other co-owners states opted to pull-out of the venture and operated their own national carriers, Bahrain was left with no option but to seek out lucrative routes on its own. Bahrain-Manila turnaround is a thriving route due to OFW patronage. Not because they prefer GulfAir, but out of employer policies imposed.
GF code shares with PAL (PR) out of Bahrain. To what percentage is unclear. Presumably, that was the best deal PR can cut with GF as Bahrain has put a premium on landing rights at Bahrain International Airport which PR refused to pay. But even if PR somehow subscribed to the landing rights, very minimal passengers would go the extra mile to fly with PR, we all know know how PR FAs regard our lowly OFWs.
European carriers opted out of Manila layover because of economics. Long ago Manila had its exotic come-ons for the Euro travelers and businessmen. Now its negligible because of you know what. And I dare say, Dick Gordon had somehow managed to arrest that decline in interest about Manila. Only to abandon it for a “loftier goal”.
Let’s face it, the world is changing. Our megalomania with the west and Europe is staring us in the face with an abandoned eye. Asia is on a renaissance. Time to place a higher regard to peoples closer to our lineage.
The west and its great grandchild is wobbling at its fat greed. Time to look at a leaner, meaner Asia.
“we all know know how PR FAs regard our lowly OFWs”
-Duh? And they think being FA is glamorous? Seriously…I have high respect for anyone who works so hard pero kung minamaliit ng FA ang mga OFWs – siguro they should look at themselves! Maganda lang figura nila pero hindi glamorous ang work nila.
“we all know know how PR FAs regard our lowly OFWs”
Natawa naman ako dito hehehe! I’m not ignorant about Flight Attendandants in terms of how much they earn and benefits and all. We happen to have several friends in the industry and believe you me, ang salaries nang Flight Attendants are not what people think they are.
Like in any industry where you work, there are advantages and disadvantages and one of the biggest perks of cours being an FA is to travel for free (although you iba you have to pay the tax and a minimal fee). Other than that, we all have the same problems and a lot more commonality than differences. Kaya kung sino man ang nag-sasabing mas mataas sila sa mga OFW, I believe it’s a defense mechanism, dahil I know, there are a lot more OFW’s earning $100k plus a year compared sa mga FA’s.