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) with its Beech Model 18 NPC-54 from Manila to Baguio and from Baguio to Manila.
Through the help of the government, PAL increased its capital to Php 1,000,000. Alongside with that, the government became the largest stockholder of the company with thirty-four (34) percent of shares.
By July 31, 1946, PAL became the first Asian airline which operated across the Pacific through the use of a Douglas DC-4 from Trans-Ocean Airline to fly between Manila and Oakland that took 41 hours to complete.
After that milestone, continuous increases in the capital of the company have occurred. PAL bought more aircrafts and more destinations like Europe have been added to their list of services. PAL became the first Asian airline to operate to Europe and so more and more airlines in the Southeast Asian region look up to PAL.
But amidst all of the achievements made by PAL, the country still lagged behind other Asian countries. Foreign countries like the US and Germany establish airlines in other Asian countries which offer better services compared to PAL.
PAL, being the first Asian airline and got nothing to base its ideas from, hired its own staff, cabin attendants, service personnel, maintenance staff and other needed people to make the airline operate as smooth as possible. Many of the money that should be used to make their services and aircrafts better went to the training of their staff and to their salaries. From that, foreign airlines learned how to utilize their resources. They opted to outsource some of their employees therefore using less amount of money for training and such.
A couple of problems have shaken the state of PAL and the country and tested its strength. Things like the suspension of PAL’s international operations due to economic issues, the continuous accidents involving the aircrafts of PAL in a single year, the Martial Law, the assassination of Benigno “Ninoy” Aquino, Jr., the numerous coup d’états during the term of former President...
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