Philippine Airlines (PAL) will do away with the first-class seats in its flagship fleet of aircraft to maximize cabin space and improve margins, reports said on Nov. 3.

The flag carrier's Boeing 747-400 fleet will be reconfigured and have only two classes, Business or Mabuhay class and Fiesta or Economy class, Philippine newspaper Business World reported.

"That's part of our strategy to give more passengers the chance to experience higher seat classes," Business World reported, quoting PAL Vice-President for Corporate Communications Rolando Estabillo.

The renovation of the four B747 aircraft, which started in late September, is expected to be finished by the second half of next year. It is the first major renovation of the fleet since the aircraft were bought in 1993.

The company uses its B747s on transpacific flights between Manila and destinations in the United States West Coast, including Los Angeles and San Francisco in California.

The new cabin will have 42 business class seats, or 10 seats more than before. The economy class remains at 383 seats. First-class roundtrip tickets cost about US$3,000 each. Business-class tickets are under US$2,000, while economy seats go for about US$1,000.

"The first-class area is rarely ever filled. Who can afford first class?" Estabillo said.

Other international airlines like Hong Kong-based Cathay Pacific have done the same, trying to attract more passengers with a bigger business class, he added.

Airlines have been trying to cut costs and attract passengers in the face of rising oil prices for the most part of the year and shrinking margins. PAL posted a 74-percent decline in profits to US$30 million in the fiscal year ending in March 2008, according to the report.