The Philippines has been known as a hub of Southeast Asia up until the mid-1960s. With Philippine Airlines as the country’s major flag carrier, many countries and airlines wanted to be like the Philippines. Unfortunately, some events led to the downfall of the tourism and aviation of the country thus leading to the country’s current situation: a laggard in tourism and aviation.

Before the start of this paper, definition of terms would be provided for hub, laggard, tourism and aviation. The National Aeronautics and Space Administration defines hub as an airline's base of operations. An airline's hub is at an airport that houses a large number of its aircraft each night and is the origin of a large number of the airline's connecting flights. (National Aeronautics and Space Administration, 2011)

The Chartered Institute of Marketing defines laggard as those who are last to adopt a new product or service. (The Chartered Institute of Marketing, 2011)

The United Nations World Tourism Organization defines tourism as the activities of people travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited. (United Nations World Tourism Organization, 2011)

NASA also defines aviation as the operation of heavier-than-air aircraft also considered to be the design, development and manufacture of aircraft. There are three types of aviation: general, commercial and military. (National Aeronautics and Space Administration, 2011)

The Philippine Airlines, known before as Philippine Airways, Inc., started its operation on February 26, 1941 with a starting capital of Php 500,000. It was established through the joint efforts of Juan M. Elizalde, Andres Soriano, Former Senator Ramon Fernandez, Schultz and Ernestto von Kauffmann. The airlines competed with Iloiloi-Negros Air Express Co., Inc. (INAEC)... [continues]

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