Two major Asian flag carrier have announced the termination of flights to the Saudi Arabian city of Riyadh, as rising oil prices force them to look a higher yield markets. Philippine Airlines (PAL) is to gradually reduce capacity on its Manila – Riyadh route before suspending flights at the end of March. From January 30, the four-times weekly service has been reduced to three flights per week, and will fall to just twice weekly from next week. Its last flight is scheduled to operate on March 31. During the final month of operation the airline will also use an Airbus A330-300 rather than a Boeing 747-400, further reducing capacity.
The market to Jeddah and Riyadh from the Philippines is sizeable with between 1.1 million and 1.8 million locals thought to now be working in Saudi Arabia. PAL had held a 25 per cent share of an O&D market of approximately 280,000 for the year ending November 2010 but with strong competition from Saudi Arabian Airlines the notoriously low yields have been falling even further, and it is believed that the airline may have been priced out of the market.
Meanwhile, Malaysia Airlines, which was due to inaugurate a Kuala Lumpur – Riyadh service from June 3, has confirmed that it has also dropped its plan to serve the Saudi Arabian city. This route was originally due to start in November 2010 but the carrier cancelled the launch and deferred start-up until June this year. It already offers a regular Kuala Lumpur – Jeddah service so will continue to serve the Middle East country, but it is believed that an alternative use has been found for the aircraft originally allocated to the Riyadh route, where yields are stronger.
NOTE: Schedule data extracted from Flightbase for week commencing January 14, 2011; Traffic data extracted from IATA BSP system for the year ending November 2010.
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