Philippine Airlines is banking of PAL Express to enable it to wrest back market leadership in the domestic market. PAL president Jaime Bautista said that by end March next year, market share of PAL will be back to 50 percent.

Interviewed at the sidelines of the National Employers Conference at the Manila Hotel where he was panel speaker yesterday, Bautista said the budget airline launched last month will give it the agility to land in small airports and pick up additional 1 million passengers.

PAL Express flies to routes that cannot be serviced by PAL and Air Philippines, the flag carrier's low-cost airline.

PAL currently corners 42 percent of the domestic passenger traffic while Cebu Pacific has a slightly bigger share of 45 percent. Air Philippines has 11 percent.

"It's possible PAL alone can be number one by March next year with a market share of 50 percent," Bautista said.

Compared to CEB's aim of growing passenger traffic by 30 percent this year, Bautista sees traffic for PAL alone to grow by 15 to 20 percent.

Bautista said PAL Express has shown strong market acceptance since its inaugural flight last May 5. from Manila to Caticlan, gateway to Boracay. Caticlan was previously served by Air Philippines.

He said the unit would open on Monday its Cebu hub from where it will fly to various points in Visayas and Mindanao such as Iloilo, Davao, Tacloban, Davao, Bacolod ; Tacloban and Zamboanga. It would also start flying the Manila-Busuanga route on Monday.

Bautista said PAL Express would initially serve 22 inter-island routes particularly, including some provincial points currently without air service or underserved by other players.

PAL, which flies to 41 domestic destinations outside Manila, is in the thick of refleeting.

Bautista said the airline is expected to take delivery of four more aircraft this year on top of the two Airbus 320s delivered April 8. Next year, it would acquire several units of Boeing 347s.

In his remarks at the conference hosted by the Employers Confederation of the Philippines, rising fuel costs and fierce competition continuously threaten the airline's bottomline.

PAL has increased the surcharges on domestic flights in Luzon and Visayas by P100 from P930 to P1, 030 and by P150 for Mindanao from P1, 180 to P1, 330.

PAL will also increase fuel surcharge for international flights by $15 to $20.