After starting operations at the Nielson Airport in March 1941, Philippine Airlines (PAL) began competing with the Iloilo–Negros Air Express (INAEC), which had been plying domestic routes since 1933.However, the outbreak of the Second World War on December 8, 1941, disrupted the operations of both airlines. INAEC planes were destroyed on the ground in Iloilo, while PAL planes were used by the military for supply deployment and personnel evacuation.
The owners of INAEC revived their company under the name Far Eastern Air Transport Inc. (FEATI), which began operations on November 16, 1945, just two months after the war. Meanwhile, PAL resumed commercial operations at Nielson Airport on February 14, 1946, with First Lady Esperanza Osmeña gracing the occasion. This signaled the resumption of the competition between PAL and INAEC/FEATI.
As the competition heated up, there ensued a “fare war” between the two. Not long after, however, the Philippine government intervened. In November 1946, the government, after signing an air treaty with the United States of America, appointed PAL the country’s official flag carrier. By December 3 of the same year, PAL began flying to San Francisco.
The government’s move proved disastrous to FEATI. On May 13, 1947, FEATI was bought by, and merged with, PAL. That same date marked PAL’s first flight to Madrid, making it the first Southeast Asian airline to fly to Europe.
On February 14, 1946, First Lady Esperanza Osmeña thanks flight stewardesses Ruby Williams and Elaine Smith,
during a ceremony at Nielson Airport. This marked PAL’s resuming operations after World War 2.
By September 1, 1948, PAL had become the only domestic scheduled airline in the country. It was during this time that the Philippine government acquired a major share of the airline, through the National Development Company (NDC). The NDC was the investment arm of the government, whose mandate was to develop, finance, and implement “projects that are vital to the sustainability of the government’s structural reforms and economic policies.”
“Company History.” INAEC Aviation Corporation. http://www.inaec.com.ph/history.html. February 14, 2012.
“Corporate Profile.” National Development Corporation. http://www.ndc.gov.ph/index.php?option=com_content&view=article&id=2&Itemid=2. February 14, 2012.
Public Relations Department, Philippine Airlines. Wings for a Nation: A History of Philippine Airlines 1941-1982. Manila: 1983.