Lucio Tan, the owner and Chairman of Philippine Airlines (PAL) was faced with a problem. Despite unacceptable levels of profitability, higher levels of passenger boardings for the summer of 1997 indicated that a sharp increase in staffing levels was required. Faced with this request from his management team, Mr. Tan, having heard of some effective consulting work carried out by Renoir Consulting in the Philippines, asked Renoir to conduct an assessment of his Manila operation.
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Airline competition in southeast Asia is fierce, with some of the best airlines in the world competing for market share and the high yield business travelers. Chief amongst that competition for Philippine Airlines is Singapore and Thai airlines. Their vastly superior on time performance helped them to dominate the higher yield business market, forcing PAL to scramble for the lower end leisure and contract worker markets.
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