SWOT Analysis

on the

Philippine Airlines Mabuhay Miles Frequent Flier Program

Strengths

1. Managing a fleet of thirty-two modern wide-bodied and narrow-bodied passenger aircraft

makes the Philippine Airlines a confident national airliner for the Philippine nation.

The fleet consists of these types of aircraft

 5 Boeing 747-400 [comprises 4 747-4F6s and 1 747-469M]

 4 Airbus A340-313X
 8 Airbus A330-301
 8 Airbus A320-214 (further 9 on order + 5 options + 2 on lease))
 0 Airbus A319 (further 2 on lease)
 4 Boeing 737-300 [comprises 2 737-3Y0s, 1 737-332 and 1 737-33A]
 3 Boeing 737-400 [comprises 2 737-4Y0s and a 737-4S3]

2. Standing 65 years in service, the Philippine Airlines is well deserved to run its own Mabuhay
Miles program.

3. Philippine Airlines’ partnership with Air Philippines creates a domestic and international
market for the Mabuhay Miles program.

4. Strong interpersonal relations and the ability to communicate effectively with Filipinos
guarantee a substantial market for the Mabuhay Miles program enticing more Filipinos to join
and take advantage of its offerings.

5. The continuous inflow and outflow of Filipino tourists, overseas Filipino workers (OFW), and
foreign Filipino immigrants creates a fixed market for the Mabuhay Miles program.

6. Having various levels of Mabuhay Miles membership caters various needs to all passengers.
(Base, Elite, Premiere Elite and Million Miler are the levels of membership)

7. The Mabuhay Miles program can be enriched or availed through other program partners (i.e.
IATA member).
8. Earning Mabuhay Miles (which is the essence of the program itself) is not limited to frequent
passengers of the airline and its partners but is extended to members who avail of the non-flight
options (services by partners e.g. Car Rental, Travel insurance etc…) and to those who wish to
purchase Mabuhay Miles through a monetary conversion.

9. Free membership eases the usual membership hassles and fees incorporated by competitors.

Weakness

1. A fleet of thirty-two aircraft may not be enough to support the constant number of Filipino and
other nationalities traveling inbound and outbound of the Philippines.

2. The Mabuhay Miles program is very dependent and focused on acquiring Filipino passengers,
thus creating a limited market.

3. Incidents and accidents in its 65 years of service has tainted the Philippine Airlines’ quality of
service.

Incidents and Accidents are as follows…

 On January 24, 1950, a Douglas DC-3 crashed in Iloilo.

 On March 30, 1952, a Douglas DC-3 crashed in Loakan Airport in Baguio upon takeoff.

 On January 14, 1954, a Douglas DC-6 crashed in Leonardo Da Vinci International Airport in Rome while
attempting to land in heavy turbelence, which led to an engine fire.

 On November 23, 1960, a Douglas DC-3 crashed in Nichols Field in Manila upon takeoff due to poor
weather conditions.

 On December 22, 1960, a Douglas DC-3 crashed in Mactan-Cebu International Airport in Cebu upon
takeoff after a failure of the number one engine.

 On March 2, 1963, a Douglas DC-3 crashed in Davao due to a premature descent.

 On February 21, 1964, a Douglas DC-3 crashed in Marawi City.

 On June 29, 1966, a Douglas DC-3 crashed in Sagalyan.

 On February 28, 1967, Philippine Airlines Flight 345, a Fokker F-27 Friendship, crahed in Mactan-Cebu
International Airport, in Cebu during landing due to an aft center of gravity condition resulting from
improper loading.

 On July 6, 1967, Philippine Airlines Flight 385, a Fokker F-27 Frienedship, crashed in Bacolod.

 On September 12, 1969, a BAC 1-11 crashed short in Nichols Field, in Manila on the runway upon landing.
  On April 21, 1970, Philippine Airlines Flight 215, a Hawker Siddeley HS-748, crashed in Nichols Field, in
Manila after a bomb exploded in the rear cargo section.

 On April 21, 1973, a Hawker Siddeley HS-748 crashed in Patabangan, after a bomb exploded during the
flight.

 On February 3, 1975, a Hawker Siddeley HS-748 crashed in Nichols Field in Manila after a fire developed
in the number two engine shortly after takeoff. It was also due to crew error in their inability to deal with a
standard emergency.

 On May 23, 1976, a BAC 1-11 crashed in Zamboanga City when hijackers detonated a number of hand
grenades in the cabin. 10 passengers and 3 police officers on the ground were killed.

 On June 26, 1987, a Hawker Siddeley HS-748 crashed into terrain in Baguio while attemtpting to land in a
moonsoon, although the crew knew about the adverse flying conditions.

 On December 13, 1987, a Shorts 360-300 crashed in Maria Cristina Airport in Iligan.

 On July 21, 1989, a BAC 1-11 crashed in Ninoy Aquino International Airport in Manila when the aircraft
overran the runway while landing, impacting several vehicles on an adjacent roadway.

 On May 11, 1990, a Boeing 737-300 suffered an explosion in the center fuel tank in Ninoy Aquino
International Airport, in Manila while preparing for takeoff. The fire and smoke engulfed the aircraft before
it could be completely evacuated.

 On December 11, 1994, a small bomb exploded below the seat of a Japanese businessman on Philippine
Airlines Flight 434. The businessman perished, but none of the aircraft's other 293 passengers and crew
were killed. The Boeing 747-200 landed safely. Investigators later found that Ramzi Yousef, a terrorist
suspected of being a part of Al-Qaida, planted the bomb there to test it out for a terrorist attack he was
planning, Project Bovina. The plan was foiled after an apartment fire in Manila led investigators to the
laptop computer and disks containing the plan.

 On March 22, 1998, Philippine Airlines Flight 137, an Airbus A320, crashed and overran the runway of
Bacolod City Domestic Airport, in Bacolod, plowing through homes near it. No one of the passengers and
crew died, but many were injured and three on the ground were killed.

 In 2000, Philippine Airlines Flight 812, en route from Davao to Manila, was hijacked by a man with marital
problems. The hijacker was pulled out of the aircraft by a flight attendant and used a parachute in escaping,
with none of the other passengers and crew being injured or killed. The hijacker died when his parachute
failed to deploy.

4. The privatize business environment of Philippine Airlines create an unmoderated control by

the government on its occurring policies and programs (Mabuhay Miles program inclusive).

5. Not all members are informed on methods of acquiring Mabuhay Miles.

6. Passenger Age statistics run from

5% Age 1-16
20% Age 17-29
30% Age 30-45
45% Age 45-65
Therefore showing a 75% feasible market for the Mabuhay Miles program, the 25% left should
be inclusive to insure a 100% feasible market based on age group statistics.

Opportunities

1. A partnership with domestic competitors would give the Mabuhay Miles program an increased
local membership and create a dominative atmosphere around the Philippine Airlines.

2. A partnership with international airlines would give the Mabuhay Miles program an increased
international and local membership.

3. A paralleled coherence with other competitors would create mutualistic benefits for the
Mabuhay Miles program rather than a competitive rule. This will shift the programs core
intentions of attracting customers to attracting other airline carriers, thus producing an evasive
lead against competition itself.

4. Acquiring personnel from various ethnic backgrounds and nationalities would create a
diversity which could set the Mabuhay Miles program free of its limited/restrained membership
and constant dependence on the Philippine market.

5. Acquiring more flight destinations would mean an increase on Mabuhay Miles usage and
membership.

Threats

1. Regional competition threats (namely China Airlines and Japan Airlines) could produce a
decline on Philippine Airlines passenger numbers and as a result, a decline also in Mabuhay
Miles program usage.

2. Passenger comfort and convenience offered by other airlines sways current and possible
Philippine Airlines passengers and Mabuhay Miles members.

3. Disruptive foreign relations by the Philippine government affect the Philippine Airlines’ travel
destinations and Mabuhay Miles memberships.

4. An emergence of cheaper rates by competitors captures the fixed market of the Mabuhay
Miles program.

5. Globalization threatens the Mabuhay Miles program as other airlines would take an evasive
lead against the Philippine Airlines.