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FORMED IN 1988 AND STARTED OPERATIONS IN 1996. HQ QUEZON CITY. LOW-COST, DOMESTIC & REGIONAL, PASSENGER & CARGO, SCHEDULED & CHARTER, JET AIRPLANE SERVICES.
AIRLINES OPERATIONS CENTER
DOMESTIC ROAD, PASAY CITY
1301 METRO MANILA, PHILIPPINES
The Philippines (the Republic of the Philippines) was established in 1898, covers an area of 300,000 sq km, its population is 72 million, its capital city is Manila, and its official languages are Filipino, Tagalog, and English.
JANUARY 1996: OWNED BY CHINESE TYCOON, JOHN GOKONGWEI (JG SUMMIT HOLDINGS).
5 DC-9-32'S (JT8D-9A), EX-GARUDA INDONESIA (GIA), LEASED BY AUSTRALIAN AIRCRAFT SALES . +6 BY END OF 1996.
JULY 1996: APPLIED FOR INTERNATIONAL SERVICES TO GUAM, HONG KONG, JAKARTA, KUALA LUMPUR, MACAU, SEOUL, AND TAIPEI.
LOOKING AT POSSIBILITY OF 4 MD-83'S. CURRENTLY FLIES 5 DC-9-30'S, 102 PASSENGERS (PAX), ON "NO-FRILLS" SERVICE TO CAGAYAN, CEBU, DAVAO, ILOILO, AND TACLOBAN. 65% LF (LOAD FACTOR).
AUGUST 1996: REMOVAL OF GALLEYS GIVES 119 PASSENGERS.
TRANSPACIFIC SERVICES ARE ENVISIONED, WITH WIDE BODIES IN LATE 1997.
MAY 1997: 3 DC-9-32'S (47069; 47070; 47071), EX-AIR CANADA (ACN).
AUGUST 1997: NOW SERVES CEBU, ILOILO, CAGAYAN DE ORO, AND DAVAO WITH 8 DC-9-32'S. WANTS TO EXPAND INTERNATIONALLY, BEFORE APRIL 1998, TO KUALA LUMPUR, JAKARTA, BANGKOK & OTHER SE ASIA DESTINATIONS WITH 2 WIDE BODIES, 165 - 200 PASSENGER.
DECEMBER 1997: 1 DC-9-32 (47266), EX-AIR CANADA (ACN).
FEBRUARY 1998: ACCDT: (CEB) DC-9-32 (47069) CRASHED INTO A VOLCANO ON APPROACH TO LANDING AT MINDANAO, PHILIPPINES = ALL 5 (FC)-(CA)/99 PASSENGER FATALITIES, NEAR CAGAYAN DE ORO. CONSIDERED AS A CONTROLLED FLIGHT INTO TERRAIN (CFIT).
THE GOVERNMENT GROUNDS DC-9 FLEET.
APRIL 1998: REGULATORY AUTHORITY OK'S 3 OF 7 DC-9'S FOR OPERATIONS.
628 EMPLOYEES (INCLUDING 45 FLIGHT CREW (FC) & 109 MAINTENANCE TECHNICIANS (MT)).
MAY 1998: NEW SERVICES: 5 MANILA - CEBU, 1 CEBU - DAVAO, 5 MANILA - DAVAO, 3 MANILA - CAGAYAN DE ORO, 3 MANILA - TACLOBAN, 2 MANILA - BACOLOD, & 1 MANILA - KALIBO.
JUNE 1998: THE GOVERNMENT GIVES OK FOR INTERNATIONAL OPERATIONS TO INDONESIA, MALAYSIA, SINGAPORE, AND THAILAND.
AUGUST 1998: 2 MILLIONTH PASSENGER CARRIED IN 2 YEARS OPERATIONS.
SEPTEMBER 1998: CEBU PACIFIC AIR (CEB) IS ANGRY AT THE GOVERNMENT, WHO HAVE BROUGHT IN 5 A330'S TO OPERATE DOMESTICALLY FROM CATHAY PACIFIC (CAT), FOLLOWING THE COLLAPSE OF PHILIPPINE AIRLINES (PAL).
1 +1 ORDER DC-9-32.
OCTOBER 1998: 1 DC-9-32 (47353), EX-AIR CANADA (ACN).
DECEMBER 1998: 2 DC-9-32'S, EX-ADRIA AIRLINES (ADR) (47239; 47570), PACIFIC VIRGIN HOLDINGS LEASED, TO COOPESA (COO), COSTA RICA, FOR "D" MAINTENANCE CHECK.
FEBRUARY 1999: TO ZAMBOANGA.
MARCH 1999: 3RD ANNIVERSARY!
APRIL 1999: 628 EMPLOYEES.
JULY 1999: PLANS FOR CHARTER FLIGHTS TO GUAM, AND EXPAND SERVICES
REGIONALLY TO SINGAPORE, MALAYSIA, & THAILAND IN 1999.
CONSIDERING +2 727-200'S.
OCTOBER 1999: 2 DC-9-32'S (47485, EX-AIR CANADA (ACN) & 47734, EX-TWA), BOUGHT FROM TRITON AVIATION SERVICES (TIA), "D" MAINTENANCE CHECK BY (PEMCO).
NOVEMBER 1999: PLANS TO BUILD MAINTENANCE HANGAR IN CEBU FOR HANDLING 2 NARROW BODY AIRPLANES.
DECEMBER 1999: RECEIVES (AQS) 9000/121, AND (ISO) 9002, QUALITY
JANUARY 2000: 1999 = 4 MILLION PASSENGERS.
MARCH 2000: 4TH YEAR ANNIVERSARY!
APRIL 2000: 803 EMPLOYEES (INCLUDING 80 FLIGHT CREW (FC), 110 CABIN ATTENDANTS (CA), & 155 MAINTENANCE TECHNICIANS (MT)).
SITA: MNLRZ5J. (http://www.cebupacificair.com).
DC-9-32 (47734, RP-C1540), TRITON (TIA) LEASED, EX-(TWA).
JUNE 2000: COMPONENT REPAIR & OVERHAUL FOR 12 DC-9-30'S TO SCANDINAVIAN AIRLINES (SAS).
10/4 ORDERS 717-200'S FOR REGIONAL ROUTES TO SINGAPORE AND JAKARTA (JANUARY 2001), TO REPLACE DC-9'S WITH 30% FUEL SAVINGS AND LOWER MAINTENANCE COSTS. WITHIN 1 YEAR, PLANS 1ST INTERNATIONAL ROUTE.
JULY 2000: PHILIPPINE AIRLINES (PAL) DOMESTIC MARKET SHARE DROPPED FROM 79% IN 1996, TO 50% IN 1999, 63% LF (LOAD FACTOR); TO CEBU PACIFIC AIR (CEB)'S 24%, 64% LF; & AIR PHILIPPINES (PHP) 22%, 58% LF.
AUGUST 2000: 1ST 6 MONTHS CARGO = 10 MILLION KG.
FEBRUARY 2001: DUE TO WEAK ECONOMY, HAS SHELVED PLANS TO ACQUIRE 717-200'S. MAY ADD SOME MD-80'S.
MARCH 2001: 5TH YEAR ANNIVERSARY!
APRIL 2001: 803 EMPLOYEES (INCLUDING 80 FLIGHT CREW (FC), 110 CABIN ATTENDANTS (CA), & 155 MAINTENANCE TECHNICIANS (MT)).
FROM MANILA TO 10 DESTINATIONS, AND FROM CEBU TO 5.
JUNE 2001: THE GOVERNMENT AWARDS ROUTES TO USA, JAPAN, CHINA, TAIWAN, SINGAPORE, INDONESIA, MALAYSIA, AND THAILAND.
3 ORDERS 757-236'S LEASED, FOR FLIGHTS TO HONG KONG, AND TAIPEI, WITHIN 90 DAYS (OCTOBER 2001).
SEPTEMBER 2001: 960 EMPLOYEES.
OCTOBER 2001: SERVICE TO HONG KONG. CEBU - DAVAO (DC-9, 3/WEEK).
757-200, PEGASUS (PSS) LEASED. DC-9-31 (48143), EX-US AIR (USA).
JANUARY 2002: 2ND 757-200 DELIVERY. TO BE USED FOR SERVICE TO SINGAPORE.
FEBRUARY 2002: DESIGNATED AS 2ND FLAG CARRIER OF PHILIPPINES. HAS 33% DOMESTIC MARKET SHARE. TO SEOUL.
April 2002: 948 employees (including 85 FC; 122 CA; & 190 MT).
Owners/Shareholders: J G Summit Holdings (49%).
Main Base: Manila (Ninoy Aquino International) airport (MNL).
August 2002: In November 2002, to Singapore (daily). Currently applying for approvals for service to Taipei, and Guangzhou (757).
September 2002: 3rd 757-236 (25597) delivery.
November 2002: To Singapore (daily). In 2003, to China, Taiwan, and Japan.
DC-9-31 (48117, RP-C1544), ex-US Airways (USA), delivery.
December 2002: 1 757-236ER, Boullioun (BOU) leased, to increase capacity from Cebu and Davao.
January 2003: Cebu/Subic - Seoul (weekly).
1 DC-9-31 (48116, RP-C1543), Airgroup leased.
March 2003: DC-9-31 (48115, RP-C1542), Finova (GRB) leased.
September 2003: DC-9-32 (48132, RP-C1545), bought from AirGroup.
2002 = 1.19 Billion (RPK) (TRAFFIC) (+29.3%); 1.7 Million passengers (PAX) (+8.9%).
2002 TOP WORLD AIRLINES TRAFFIC (RPK) (Billions):
193 (SAP) 1.29; 194 (AZR) 1.27; 195 (WUH) 1.24; 196 (MAK) 1.20; 197 (CEB) 1.19; 198 (OMR) 1.19; 199 (BEE) 1.19; 200 (ARK) 1.17; 201 (SKM) 1.13; 202 (LUX) 1.10; 203 (ACE) 1.09.
April 2004: 1,173 employees (including 104 FC, 151 CA, & 210 MT).
September 2004: Current domestic network extends to 19 destinations.
12 orders (September 2005) A319's (CFM56), 150Y & 2 orders A320's (CFM56), 168Y, to replace its 18 DC-9's & 3 757's.
January 2005: Memo of Understanding (MOU) with Singapore Airlines (SIA) Engineering Company for line maintenance, technical ramp services, and light maintenance at 13 airports in the Philippines.
April 2005: 1,356 employees.
May 2005: 1st & 2nd A320-214's (2419, RP-C3240; 2439, RP-C3241), (CIT) (TCI) leased, delivery.
September 2005: A319-111 (2556, RP-C3189), delivery.
October 2005: A319-111 (2586, RP-C3190), delivery.
December 2005: 2 A319-111's (2625, RP-C3191; 2638, RP-C3192), deliveries.
January 2006: Cebu Pacific (CEB) announced it plans to inaugurate nonstop service from Oloilo to General Santos City. (CEB) will operate a daily flight using its A320.
February 2006: The Philippine government has decided to build an international airport at Barangay Alobo in Albay province. The airport development has an initial budget of PHP3.4 billion/$65.5 million and is expected to be completed in 7 years.
April 2006: 757-236 (24370), ex-Air Slovakia (SLO) returned to Pegasus (PSS), leased to Girjet (GIR).
May 2006: Cebu Pacific (CEB) will inaugurate non-stop service from Manila to Laoag on June 8th. (CEB) will operate 3x-weekly on Tuesdays, Thursdays & Saturdays, using an A319.
June 2006: 2 A319-111's (2786, RP-C3193; 2790, RP-C3194), deliveries.
July 2006: Cebu Pacific Air (CEB) will become the 2nd tenant of Singapore Changi airport's Budget Terminal. Singapore aviation officials granted (CEB) approval to operate flights to Changi beginning in late August. Tiger Airways (TGR) was the 1st customer to operate at the Budget Terminal, which opened 4 months ago.
(CEB) will add 1 flight each on its Manila - Tacloban, Tagbilaran and Cagayan de Oro routes. Starting August 17th, service will rise from 14x- to 21x-weekly for Manila - Tacloban and Cagayan de Oro, while Manila - Tagbilaran will increase from 7x- to 14x-weekly. (CEB) will inaugurate nonstop service from Manila to Legaspi City on August 17th. (CEB) will operate a daily flight using an A319. (CEB) will resume non-stop service from Manila to Singapore on August 31st. (CEB) will operate a daily flight using an A319/A320.
2 A319-111's (2821, RP-C3196; 2831, RP-C3195), deliveries.
August 2006: A319-111 (2852, RP-C3197), delivery.
September 2006: Cebu Pacific Air (CEB) is a low-cost, scheduled, domestic carrier operating from Manila and Cebu.
Employees = 1,361.
(IATA) Code: 5J - 203. (ICAO) Code: (CEB) (Callsign - CEBU AIR).
Parent organization/shareholders: J G Summit Holdings (100%).
Alliances: Asian Spirit.
Main Base: Manila Ninoy Aquino International Airport (MNL).
Hub: Cebu airport (CEB).
Domestic, Scheduled Destinations: Bacolod; Butuan; Cagayan de Oro; Cebu; Cotabato; Davao; Dumaguete; Iloilo; Kalibo; Manila; Puerto Princesa; Roxas City; Subic Bay; Tacloban; Tagbilaran; & Zamboanga.
International, Scheduled Destinations: Hong Kong; & Seoul.
A319-111 (2876, RP-C3198), delivery.
October 2006: Cebu Pacific (CEB) inaugurated nonstop service from Manila to Genera Santos City. (CEB) now operates a daily flight using an A319.
(CEB) inaugurated nonstop service from Cebu to Clark and now operates a daily flight using an A319.
(CEB) will inaugurate non-stop service from Manila to Kuala Lumpur on November 30th and will operate 4x-weekly on Tuesdays, Thursdays, Saturdays, & Sundays using an A319. (CEB) will inaugurate non-stop service from Manila to Bangkok on December 14th and will operate 4x-weekly departing Manila on Wednesdays, Thursdays, Saturdays, & Sundays, and Bangkok on Mondays, Thursdays, Fridays & Sundays using an A319.
January 2007: Airports of Thailand approved the use of Don Muang Airport (DMK) for domestic flights with no international connections beginning in March, according to press reports. Don Muang was to have been closed to commercial traffic in September, when the new Suvarnabhumi Airport opened for business. The "Bangkok Post" said reopening (DMK), which now handles only charter flights, would give airport officials "flexibility" to solve problems at the new facility.
A320-214 (2994, RP-C3242), delivery.
March 2007: Cebu Pacific Air (CEB) will operate additional daily frequencies from Manila to Legaspi, Davao, Cagayan de Oro, Bacolod and Iloilo through June 12 on A319s or A320s.
(CEB) signed up for 10 more A320s with options and purchase rights on an additional 10. (CEB) placed an initial order for 12 A320 family airplanes in September 2004 and took delivery of the last of that order this month. (CEB) has been phasing out its fleet of DC-9-30s and 757s. The order is worth $1.3 billion. Firm airplanes will be delivered in 2010 to 2012 with options arriving in 2011 to 2013. (CEB) will take short- and medium-term leases on A320s to fill its need over the next 3 years, adding 3 to 4 airplanes each year. If all options are exercised on yesterday's order, (CEB) will be operating 32 Airbus (EDS) airplanes by 2013, doubling its annual passenger load to 10 million. It currently flies 10 A319s and 4 A320s to 20 domestic and 7 international destinations.
May 2007: Cebu Pacific Air (CEB) ordered 6 72-seat ATR 72-500s plus 8 options in a deal worth >$250 million, the manufacturer said. The airplanes will enable (CEB) to operate into more Philippine airports that are restricted by shorter runways. President & (CEO) Lance Gokongwei said the order "is a continued manifestation of (CEB)'s commitment to bring air travel closer to more Filipinos and to bring them to more destinations which we cannot operate to at the moment."
The 1st 2 airplanes will arrive early next year with deliveries, if all options are exercised, continuing through 2012. It is ATR's 1st sale in the Philippines. The manufacturer said it has received orders for 27 new airplanes this year, some of which have not been announced.
(CEB) currently operates 14 A320 family airplanes and ordered 10 more, plus 10 options last month.
June 2007: Cebu Pacific (CEB) said it plans to launch service from Manila to Shanghai, Guangzhou, Xiamen and Macau in September and October with fares that are -85% lower than those currently available on the routes. Daily flights to Shanghai and Xiamen will begin September 12 and 26 respectively. 4x-weekly, Guangzhou service will launch October 10 and 3x-weekly, Macau service the following day.
August 2007: Cebu Pacific (CEB) is now the leading domestic airline in the Philippines in terms of passengers carried, according to new data released by the country's Civil Aeronautics Board. It carried 2.26 million passengers from January to June, compared to Philippine Airlines (PAL)'s 1.98 million. (CEB) also attained an 84% LF load factor, up +12% on last year, compared to 80% LF and 72% LF for its nearest competitors. While the domestic market jumped +24% in the 1st half, (CEB)'s domestic passenger count leaped +72%. According to Candice Iyog VP Marketing & Product, (CEB)'s continuous growth in market share and load factor can be attributed to its fleet expansion, aggressive pricing and active search for and opening of new domestic routes. (CEB) recently committed to 20 A320s and up to 14 ATR 72-500s to add to its fleet of 14 A319s. On the international front, it is operating to 8 destinations and is about to commence services to Shanghai, Xiamen, Guangzhou and Macau.
October 2007: A320-214 (3272, RP-C3244), (GEF) leased.
December 2007: Cebu Air, which operates Low Cost Carrier (LCC) Cebu Pacific Air (CEB), was approved to launch an Initial Public Offering (IPO) by the Philippine Securities and Exchange Commission, "XFN" reported. Cebu Air plans to sell as many as 72 million primary shares and 63.4 million secondary shares at a maximum price of PHP95/$2.26 each, which it said could raise PHP12.5 billion.
Cebu Pacific Air (CEB) will launch 3x-weekly, Cebu - Bangkok flights on April 6. The Thai capital will be its 6th international destination from Cebu.
(CEB) ordered +4 more ATR 72-500s, converting options from an earlier order and bringing its firm commitment to 10 of the type. It still holds 4 options. (CEB) said only about one-third of the Philippines' 75 airports can accommodate its A319/A320 fleet. The 1st 72-seat ATR 72-500 turboprop will enter service to Caticlan February 29. Cebu (CEB) will take delivery of 6 ATRs next year, and 4 in 2009. An additional 4 A320s added next year will lift its fleet to 25 airplanes by year end. It also said it will increase its 3x-weekly, Manila - Macau service to 4x-weekly on January 13 and daily on June 6.
February 2008: ATR 72-212A (779, RP-C7250), delivery.
March 2008: A320-214 (3433, RP-C3245), (CIT) Group (TCI) leased, and ATR 72-212A (784, RP-C7251), delivery.
April 2008: Cebu Pacific Air (CEB) will launch a 4th daily, Manila - Hong Kong flight on June 30.
Navitaire reached a deal with Cebu Pacific Air (CEB) for provision of its New Skies hosted reservation services and SkyPrice revenue management system.
Gary Kingshott, resigned his position as (CEO) of JetLite (SAQ), India, to become a Senior Consultant at Cebu Pacific Air (CEB). Philippine laws bar foreigners from taking on the title of (CEO) at local airlines.
A320-214 (3472, RP-C3246), (CIT) Group (TCI) leased.
May 2008: Cebu Pacific Air (CEB) will operate 4x-weekly, Cebu - Macau from May 8, and 3x-weekly, Manila - Kaohsiung, beginning June 7.
A320-214 (3487, RP-C3247), (CIT) Group (TCI) leased.
September 2008: Cebu Pacific (CEB) continues to expand rather than retreat despite market turmoil. (CEB)’s latest route is Manila - Osaka, which will operate 3x-weekly, starting in November. Osaka is (CEB)’s 1st destination in Japan, which only recently liberalized access to its markets (those except Tokyo anyway). Though culturally-homogenous, Japan doesn’t have a large population of foreigners, but it does host a sizeable number of Filipino workers.
(CEB) will open a flight base at Manila Clark in November with initial markets served being Hong Kong; Singapore; Macao; and Bangkok. (CEB) already operates bases at Manila's main airport, and in Cebu and Davao.
December 2008: Cebu Pacific Air (CEB) took delivery of its 6th ATR 72-212A (842, RP-C7255), ex-(F-WWEH). It also operates 10 A319s and 9 A320s.
January 2009: Cebu Pacific Air (CEB) transported 683,204 passengers in December, a one-month record for the airline. It said it will add frequencies on flights from Manila to 11 domestic destinations by March "despite the weak economic forecast for the country," increasing the number of weekly domestic flights 16.6% to 1,252. (CEB) expects to take delivery of 1 A320 family airplane and 2 ATR 72-500s by March. Frequencies to Shanghai, Kuala Lumpur, and Macau also will increase during March.
(CEB) transported 6.7 million passengers in 2008, up +23% from the prior year, and expects 9.3 million in 2009, as it adds 3 A320s and 3 ATR 72-500s to its fleet. It now flies to 15 international and 27 domestic destinations, with 5 new domestic airports to be added in the coming months. President & (CEO) Lance Gokongwei said Cebu was "able to successfully convince more Filipinos to travel by air, despite economic uncertainties" by offering all-inclusive fares and discounts for passengers declining to check luggage.
(CEB) will operate 3x-weekly flights from Cebu to Cotabato beginning January 10 and to Dumaguete from January 12. Frequencies to Tacloban, Ozamiz and Iliolo will be increased in the coming weeks.
(CEB) soon will take delivery of a 7th new ATR 72-500 and launch flights from Manila to Catarman and Virac (each 4x-weekly) on February 14 and Calbayog and Cauayan (each 3x-weekly) on February 18. It also will increase service from Manila to Naga and Busuanga.
2 A320-214s (3762, RP-C3249; 3767, RP-C3250), and ATR 72-212A (847, RP-C7256), deliveries.
March 2009: Cebu Pacific (CEB) became the only carrier to fly between its namesake city, Cebu and Siargao, a beach city popular with surfers.
(CEB) won approval from the restrictive Japanese government to remove surcharges on its Manila - Osaka route.
June 2009: At the Paris Air Show, Cebu Pacific (CEB) signed an agreement for 5 A320s, upping its total orders for the type to 15. The newly ordered airplanes are scheduled for delivery from 2013. The initial batch of 10 A320s is scheduled for delivery between 2010 and 2013.
September 2009: Cebu Pacific Air (CEB) earned a +PHP1.82 billion/+$37.1 million profit in the 1st half of 2009, putting it on course to improve upon the -PHP15.7 million loss suffered in 2008.
Half-year revenue rose +21.3% year-over-year to PHP11.39 billion, as (CEB) took delivery of A320s and ATR 72-500s and added routes, frequencies and capacity.
"We are very happy that despite the economic recession and the dynamic changes in foreign exchange and fuel costs, we remain a profitable and financially strong airline," VP Marketing & Distribution Candice Iyog said. "Our low-cost carrier (LCC) strategy has made more and more people utilize air travel for business (C) and leisure (Y) travel. We will continue to offer our value fares and convenient routes."
(CEB) currently operates 21 A319s/A320s and 8 ATR 72-500s to 32 domestic and 14 international destinations. It will take delivery of 17 Airbus (EDS) and 2 ATR airplanes through 2013.
February 2010: Rockwell Collins announced that Cebu Pacific Air (CEB) chose it to provide a full suite of communication, navigation and surveillance systems as baseline equipment for the airline's 15 new A320s and 5 options. (CEB) chose the MultiScan Hazard Detection System, which was recognized with Air Transport World (ATW)'s Aviation Technology Achievement Award. Additionally, (CEB) selected the ADF-900, DME-900, HFS-900D HFD Radio, GLU-925 MMR, VHF-2100 HSMM Data Radio and VOR-900 VHF Omnidirectional Range Receiver.
March 2010: The European Commission (EC)'s 13th update of its list of airlines banned from operating within the European Union (EU)'s borders includes all carriers from the Philippines and Sudan, as well as Iran Air (IRN). Philippine Airlines (PAL) currently operates to 5 North American destinations but neither it nor its affiliates fly to Europe, while Iran Air (IRN) does serve the continent.
The (EC) said it "acknowledges the recent efforts launched by the competent authorities to reform the civil aviation system in the Philippines" and that (PAL) and Cebu Air (CEB) have taken measures. However, it said it would "follow the principle of precaution" and impose a full operating ban. Sudan, the (EC) said, was guilty of "persistent noncompliance with international standards in the area of oversight." Ramp checks of Iran Air (IRN) airplanes serving the (EU), along with "serious incidents and accidents suffered by the carrier and insufficient oversight from the authority over the past year," led the (EC) to ban certain airplanes from operating. It said it plans a visit to Iran "over the next months" to verify safety oversight. It did not indicate which airplanes are banned.
The (EC) lifted some restrictions on (TAAG) Angola Airlines (ANG) and Air Koryo (KOY). Air Koryo (KOY), banned since March 2006, will be allowed to operate 2 specially equipped airplanes into the (EU), while (TAAG) (ANG) will be allowed to fly to any (EU) destination "under certain strict conditions with specific airplanes." Other Angolan airlines remain banned. The commission said it is "closely monitoring" airlines from Albania and Egypt. The blacklist still includes Ariana Afghan Airlines (AFG), Siem Reap Airways International (SRA), Silverback Cargo Freighters (VRB) and all airlines from 17 countries, including Indonesia.
April 2010: Cebu Pacific Air (CEB) ordered 7 more A320s, bringing its outstanding orders for the type to 22, which will be delivered beginning in October and continue through late 2014. "This will enable us to have the largest fleet of A320 family airplanes in the Philippines and the 2nd-largest in SE Asia, allowing us to offer our trademark low fares to even more Filipinos," President & (CEO) Lance Gokongwei said. The additional airplanes will bring (CEB)'s A320 fleet to 43 by 2014.
June 2010: Cebu Pacific Air (CEB) noted that it is now the Philippines' largest airline based on number of passengers flown on domestic and international routes. According to Civil Aeronautics Board data, (CEB) flew 2.45 million total passengers in the 1st quarter, nearly +110,000 more than Philippine Airlines (PAL), which carried 2.34 million system wide during the period. (CEB) became the No 1 domestic carrier last year when it captured just >50% of the market and it held a 51% domestic share in the 1st quarter.
VP Marketing & Distribution Candice Iyog said (CEB)'s "consistent focus and commitment to offering the lowest fares for value service continues to pay off. We expect to grow even more in the coming years as we take delivery of more brand-new planes, which we will use to expand our capacity, increase frequencies and fly to more local and foreign destinations." (CEB) plans to take 22 A320s between October 2010 and 2014, bringing the number of A320s it operates to 43. It also operates 8 ATR 72-500s. In 2009, it flew 8.8 million passengers, up +31% year-over-year. It forecasts that it will carry 10 million this year and 15 million by 2013.
August 2010: As Philippine Airlines (PAL) buckles under labor pressure, Low Cost Carrier (LCC) rival, Cebu Pacific (CEB) is adding frequencies to a large number of destinations this fall, including Singapore, Jakarta, Kuala Lumpur, Seoul, Taipei, and Kota Kinabalu. That’s in addition to launching new service from Manila to Brunei
later this month and Manila to Beijing next month, as previously announced.
Cebu Pacific (CEB) will receive +3 more A320s this year.
September 2010: China's vacation playground (the island of Hainan) is removing visa requirements to encourage tourists to visit the province at the southern tip of the country. Provincial Government Director Qu Jianmin said Canada is 1 of 26 countries whose nationals will be able to enter China through Hainan without a visa. "Just buy a ticket and visit" Qu said.
A new route into Hainan became a possibility when Filipino low-cost carrier Cebu Pacific (CEB) signed a Memo of Understanding (MoU) with Haikou Airport to open a route from Clark Airport in Manila to Haikou via Macao. "This is the 1st stage," said Alexander Lao (CEB)'s Director Revenue & Pricing. "The Hainan government is helping us lobby Beijing to enable us to fly via Macao. We have the airplane ready to go but it is dependent on us being able to stop in Macao. Hainan is optimistic this will happen."
Hainan has seen rapid expansion of tourism to its 1500 km of tropical coastline, with many of the 22 million visitors coming from Russia, Japan, Korea and the rest of China. Over the past 5 years international flights have increased from 5 to 61, with the number of airlines growing from 5 to 38.
October 2010: Cebu Pacific (CEB) announced that it completed 1 of the country’s largest initial public offerings (IPO), raising PHP23.3 billion/$539 million prior to exercise of an over-allotment option. (CEB) also claimed it was the “largest international low-cost carrier (LCC) (IPO) offered globally to date.”
(CEB) said it sold 186.6 million shares, or 30.4% of total outstanding shares, to investors in the Philippines and abroad, priced at PHP125 ($2.91) per share. Proceeds from the offering primarily will be used for airplane acquisition and it will take delivery of 22 A320 airplanes by 2014.
Cebu (CEB) is now the Philippines’ largest airline having surpassed Philippine Airlines (PAL) in the 1st quarter in terms of passengers carried with a total of 2.45 million, outpacing (PAL) by 110,000 passengers. (CEB) said it achieved +29.4% revenue growth in the 1st half of 2010 with a load factor of 85.4% LF, on-time performance of 89.4% and a net income margin of 21.2%. (CEB) flies to 33 domestic and 16 international destinations.
January 2011: Cebu Pacific Air (CEB) now has 49% share of Philippine domestic traffic (RPK)s and 14% of Philippine international traffic.
A320-214 (4574, RP-C3263), delivery, ex-(D-AVVJ).
March 2011: Lufthansa Systems (LHS) signed a 5-year contract with Cebu Pacific (CEB) to provide its Flight Management System (FMS).
May 2011: Cebu Pacific (CEB), now the Philippines’ largest airline, flew >2.8 million passengers in the 1st quarter to March 2011, up +12% over the year-ago quarter. According to (CEB) VP Marketing & Distribution Candice Iyog, (CEB) is on track to achieve its 12 million-passenger target for 2011, up +14% from the 10.5 million passengers carried last year.
“We attribute this 1st-quarter growth to flight frequency increases to key international markets, brought about by the additional capacity from our new A320s,” said Iyog, noting, “Our 15th A320 was delivered just last January, increasing our fleet size to 33 airplanes.”
The major driver in the growth was international traffic, which was up +32%. (CEB) flew 672,456 international passengers from January to March 2011, compared to 511,178 passengers flown in the year-ago period.
(CEB) doubled its Manila - Incheon services to 2x-daily in January and added +3 additional flights to its Manila - Bangkok services, making it a 10x-weekly service from February. (CEB) achieved an 87% LF load factor from January to March, an increase of +4% points year-on-year.
June 2011: Cebu Pacific (CEB) signed a Memo of Understanding (MOU) with Airbus (EDS) to purchase 30 A321neos and exercise options for 7 current model A320s. The 37 airplanes, valued at $3.8 billion at list prices, will be delivered between 2015 and 2021 and are in addition to 18 A320s that will begin delivering in the 2nd half of this year with the last of the group slated to arrive in 2014.
(CEB) said the A321neo order, if finalized, would represent "the largest single airplane order ever made by a Philippine carrier." The (MOU) also includes 10 A321neo options. (CEB) currently operates a fleet comprising 25 A320 family airplanes and 8 ATR 72-500s.
(CEB) said it has not made an engine selection on the A321neos.
Cebu President & (CEO) Lance Gokongwei said, "These 220-seater airplanes will be a real 'game changer' for Cebu Pacific (CEB) because the A321neo will have a much longer range. We will be able to serve cities in Australia, India and Northern Japan, places the A320 cannot reach. The airplane will reduce our unit cost per seat to a level that cannot be achieved flying A320s." (CEB)'s network comprises 33 domestic and 16 international destinations.
July 2011: Cebu Pacific Air (CEB), now the largest airline in the Philippines, said it signed 6-year operating lease agreements with Dublin-based (RBS) Aviation Capital for 2 new A320 airplanes, which will be delivered in March 2012.
(CEB) said this will be on top of 27 A320s to be delivered from September until 2016, and 30 A321neo airplanes to be delivered from 2017 - 2021. The A321neos will be a 1st of the type to operate in the Philippines.
(CEB) currently operates 10 A319s, 15 A320s and 8 ATR 72-500s. Of the 15 A320s, 9 are under operating lease agreements.
August 2011: Cebu Pacific Air (CEB) will fly its 30 new A321neo airplanes across its expanding pan-Asian network, which includes 34 domestic and 16 international destinations, including Osaka, Seoul Incheon, Beijing, Jakarta, Bangkok, and Singapore.
September 2011: The following is an "Airline Weekly" publication article on the state of airlines in the Philippines: Not long from now, the remarkable AirAsia (ASW) will launch its latest joint venture (JV): AirAsia Philippines. In doing so, it enters a market with both promise and peril, one that’s already a theater of war between a high-flying Low Cost Carrier (LCC) and a struggling legacy carrier. To be sure, the Philippines has its problems as far as airlines are concerned. It’s hardly a wealthy country, with 1 in 4 people living on <$1.25 a day, according to the World Bank.
Infrastructure, including airport infrastructure, is underdeveloped. Transparency International ranks it 134 out of 178 on its corruption perceptions index, tied with Nigeria and Bangladesh. Investment is low, income inequality high and tax collection weak. Among (ASEAN) nations, Thailand, Singapore and Malaysia receive far more overseas tourists. Terrorist threats keep visitors away from parts of the country’s south. Safety concerns dog the country’s aviation sector. And the Philippine economy certainly wasn’t helped by the crisis in Japan, its 2nd largest trading partner after the USA.
All true, yes. But that’s not the whole story. If the Philippines was all bad news, AirAsia (ASW), for one, wouldn’t be so eager to enter. Nor would carriers as diverse as Cathay Pacific (CAT), Korean Air (KAL), Emirates (EAD) and Delta (DAL) be such active players in the market. And nor would the home-grown (LCC) Cebu Pacific (CEB) be as successful as it’s been. Indeed, the Philippines offers big opportunities for airlines (opportunities they are increasingly exploiting. Much of this opportunity is linked to the country’s flourishing if still underwhelming tourist sector. Last year, >3.5 million people visited the Philippines from other countries, +17% more than in 2009 and +12% more than in 2008, the previous peak year.
Naturally, this growth is fueled by fast economic expansion throughout East Asia, fast enough to send arrivals up another +12% in the 1st half of 2011 (despite the Japan crisis and despite a massive -21% (y/y) drop in tourists from Hong Kong following an incident last summer in which eight Hong Kong tourists died in a Manila bus hijacking. Government officials expect 3.7 million visitor arrivals this year and roughly double that in the next 5 or 6 years.
Helping their cause are the country’s relatively low prices (hotel costs are notably cheap, for example) and tourist draws like spectacular beaches and Spanish colonial cities. The visa regime is relaxed, airport fees are relatively low and NE Asians in particular can’t seem to get enough of the country. Visitors from Japan are actually up +6% (y/y) so far this year despite the tsunami, and visitors from mainland China are up a bullish 17%. The volume of Taiwanese visitors is also way up, as are inflows from Australia and Singapore. Domestic tourism is growing too. But no country sends more tourists to the Philippines than Korea, the country’s largest source market by far. Koreans come to beach resorts like Boracay and Puerto Princesa, and at least as enthusiastically to attend English language schools in cities like Cebu and Baguio.
The warm-weather Philippines is also a popular retirement spot for Koreans. The USA, unsurprisingly, is the country’s number 2 source of visitors, reflecting the large number of Filipinos living in the USA. Of all foreign born residents of the USA, in fact, only Mexicans and Chinese are more numerous.
This raises another unique aspect of the Philippines that’s of great interest to airlines: the enormous number of overseas Filipino workers (OFWs) scattered throughout the world, most notably in North America and the Arabian Gulf. By some accounts, roughly a 10th of the entire Filipino population works abroad, contributing vital low-cost labor to their host countries and just as vital remittance money to their home economy. >1 million (OFW)s work in Saudi Arabia alone, many in the oil fields.
There are plenty of Filipinos back home too. The country’s total population is approximately 100 million, making it the 12th most populous country in the world and second in the (ASEAN) region behind Indonesia. What’s more, the nation consists of >7,000 islands, meaning heavy reliance on air travel. In addition to the capital Manila, centrally-located Cebu as well as Davao in the south are population and economic centers in their own right. And unlike much of the (ASEAN) region, major airports like Manila Aquino, Manila Clark and Cebu are within narrow body range of NE Asian mega-cities like Tokyo, Beijing, Shanghai, and Seoul. Indeed, this is one major reason (along with the country’s large, mobile population and tourist potential) why Malaysia-based AirAsia (ASW) is establishing its new base at Manila Clark.
The Philippine economy has some bright spots too. Last year, it grew +7%, its highest figure in more than three decades. It was only mildly impacted by the recent global recession and might grow as much as +5% this year according to government estimates (it helps that many Filipino workers are employed in countries with booming oil exports). The new Aquino administration is inviting companies like Singapore’s Changi Airport to invest in infrastructure and attempting to improve the country’s fiscal health by pushing for greater tax compliance. One sector that’s thriving is call center outsourcing, with many USA companies, including several airlines like United (UAL), hiring Philippine companies to handle customer service inquiries. The Philippines is now trying to develop capabilities to handle calls from the USA and elsewhere for Spanish speakers.
For many years, the Philippine market, for all its ups and downs, was largely in the grip of Philippine Airlines (PAL), a carrier with a long history of union disputes and financial trouble. It emerged from a long stay in bankruptcy 4 years ago and did manage to make money in the 12 months to March 2011, earning a +$73m net profit and a 4% operating margin thanks to the economic boom that benefited nearly all airlines in the region. In the most recent April-to-June quarter, however, it slipped to a -$11 million net loss and negative -2% operating margin. One big problem: the USA (FAA)’s 2008 safety downgrade of the Philippines, which prevents (PAL) from deploying its new 777-300ERs to markets like Honolulu, Los Angeles, San Francisco and Las Vegas. Nor can it add new USA routes until the (FAA) removes the country’s category 2 safety status, and nor can it fly to Europe until the European Union (EU) removes Philippine carriers from its own safety blacklist. In the meantime, (PAL) is outsourcing non-core activities (prompting union strikes and resulting flight cancellations), launching new routes like Delhi, working with Sabre to upgrade its Information Technology (IT) systems and perhaps entertaining the notion of joining an alliance. It’s also been busy evacuating Filipinos from Middle Eastern and North African hotspots. (PAL)’s greatest nemesis now stems from the home market it once dominated. Cebu Pacific (CEB), which first launched in 1996 but became a (LCC) only in 2005, now commands a leading 45% domestic market share, compared to 24% for (PAL), or 43% including its low-fare Airphil Express (PHP) affiliate. (CEB)’s 2010 Initial Public Offering (IPO) capped off a year in which its operating margin reached an outstanding 20%, among the best in the world, although profits have cooled a bit so far this year. It’s now the only (ASEAN)-based (LCC) serving the giant Beijing and Shanghai markets and has a unique ability to serve both NE Asia and the (ASEAN) region with narrow bodies, in its case A320s and A319s. In 2008, it purchased ATR turboprop airplanes to tap domestic airports with short runways, and this year, it placed orders for A321neos. (CEB) gets 11% of its revenues from ancillaries, 48% of its bookings from its popular website and gives AirAsia (ASW) a run for its money when it comes to clever marketing (it recently won international attention for a YouTube video showing its flight attendants dancing the safety drill to a Lady Gaga tune.
In many markets, (LCC)s have played a pivotal role in taking people off of buses and onto airplanes. In the Philippines, Cebu Pacific (CEB) has taken people off of sea ferries and onto airplanes, driving strong domestic air travel growth that averaged about +10% a year during the last half of the 2000s. But it’s now growing even faster internationally, most recently launching a Manila - Busan route. It’s now eying Tokyo, Nagoya, and Bali, presenting more potential headaches for (PAL).
The low-cost carrier (LCC) phenomenon is spreading throughout the Philippines not just with Cebu Pacific (CEB) and AirAsia (ASW), whose Malaysian unit already serves Manila Clark from both Kuala Lumpur and Kota Kinabalu. SEAir, another Philippine carrier, is partnering with Tiger Airways (TGR), which itself flies from Singapore to Manila Aquino, Cebu, and Davao. Jetstar (IMU) is also in the mix, with Manila Aquino non-stops to Singapore and Darwin. So are Korean (LCC)s including Jeju Air (JJA) and the Korean Air (KAL) and Asiana (AAR) affiliates Jin Air (JIN) and Air Busan (ABN), respectively. When AirAsia Japan, Jetstar Japan and Peach start flying, the Philippines might be on their radar. And China’s Spring Airlines (CQH) could have markets like Manila and Cebu in mind as well, especially following a recent "open skies" policy adopted by the Philippine government, covering markets outside of Manila anyway. Zest Airways, (RIT) formerly known as Asian Spirit, is another Philippine carrier now serving many domestic cities from Manila Aquino while also linking Shanghai, Seoul, Busan, and Taipei nonstop to Kalibo, a gateway to the popular Boracay Island, and Seoul to Cebu as well.
The growing dynamism of the Philippine market doesn’t stop with (LCC)s, however. (OFW) traffic is a low-yielding but high volume prize for full-service long haul airlines like Singapore Airlines (SIA) and especially Cathay Pacific (CAT), which offer (OFW)s and tourists alike an alternative to Philippine Airlines (PAL). Ranked by capacity (ASK)s flying into and out of the Philippines, Emirates (EAD), Etihad (EHD), Qatar Airways (QTA) and Saudi Arabian Airlines (SVA) are the country’s 4 largest foreign airlines, carrying planeloads full of (OFW)s. Gulf carriers have in fact driven (PAL) from a number of Gulf markets in recent years, while adding insult to injury by poaching many of its pilots (FC) and other skilled workers. Korean Air (KAL) and Asiana (AAR) are of course big players in the Philippines, as are other East Asian carriers. 3 USA airlines serve the market too: Delta (DAL) from Tokyo Narita and Nagoya; Hawaiian (HWI) from Honolulu, and United (UAL) from Guam.
For all of this airline activity, however, the Philippines still has a long way to go before reaching its potential (and in some ways even catching up to its past). (KLM) is now the only European carrier serving the country, with Air France (AFA), British Airways (BAB), Lufthansa (DLH) and Swiss (CSR) all having left. Tourism remains fragmented, with many destinations scattered throughout the country and arguably under-promoted (Boracay just doesn’t have the same global name recognition as competing destinations like Singapore, Bangkok, Phuket and Bali). None of the country’s airlines are airline alliance members. And the World Economic Forum recently ranked the Philippines 94th world wide in its travel and tourism competitiveness index. Not good!
But AirAsia (ASW)’s upcoming landing marks a promising step forward. Even if Cebu Pacific (CEB) proves the Manny Pacquiao of this boxing match, the fight itself is a good sign that low fares are here to stay, and that the Philippines will yet become the red-hot market its potential suggests it could be.
A320-214 (4852, RP-C3264), ex-(D-AUBM) delivery.
October 2011: Cebu Pacific (CEB)'s longest international route, Manila - Beijing, is now a year old; 42,000 passengers were flown in this 1st year.
(CEB) launched 3x-weekly, Iloilo - Cagayan de Oro A319 service and daily, Zamboanga - Tawi-Tawi A319 service.
2 A320-214s (4861, RP-C3265; 4870, RP-C3266), EX-(D-AUBO & D-AUBR), (GEF) leased.
January 2012: Cebu Pacific (CEB)'s latest new China route is Manila - Xiamen; (CEB) will also increase frequencies to Beijing.
(CEB) will consider starting long-haul low-cost services if it sees strong demand for certain point-to-point routes. "We are looking at the opportunity," (CEB) President & (CEO) Lance Gokongwei said. "There are certain point-to-point markets we would have to look at. The Middle East has 2.5 million Filipinas; the USA has 4 million Filipinas. These are quite underserved. "Gokongwei said (CEB) will go ahead only if it can achieve a sustainable unit-cost advantage and potentially make money for its shareholders.
"I need to be personally convinced that there is a market, and I think there is a market only if you are very selective about which routes you go into with this," said Gokongwei. "Once we feel that we have the capability to do so, we will."
(CEB), which operates A320-family airplanes and ATR 72-500s, has orders for the A321neo. It has not ordered any wide bodies, which will be needed for long-haul operations, but Gokongwei said there have been discussions about them. "As part of our business plan, we need to know the operating cost of all airplanes. So we've had discussions about wide bodies with all the major suppliers," Gokongwei said.
If (CEB) goes ahead, the long-haul low-cost operation is likely to have a separate management team. This would be similar to Singapore Airlines' subsidiary, Scoot (SCT), and AirAsia X (ASX), an associate of Malaysian low cost carrier (LCC) AirAsia (ASW). "It is difficult to do because whenever you bring in new airplanes, it adds complexity. You need management and technical capability, the distribution channels are important," Gokongwei said.
"It can enhance the brand, just like what AirAsia X (ASZ) has done for AirAsia (ASW), but it adds complexity. So if you want to do it, you need to make sure you have completely different teams. Don't confuse the management by having them do both," Gokongwei added.
3 A320s to be delivered in the 1st quarter.
February 2012: Cebu Pacific (CEB) will launch long-haul services in the 3rd quarter of 2013. (CEB) will lease up to 8 A330-300s and offer low-cost services to Australia, the Middle East, parts of Europe, and the USA, said Alex Reyes (CEB)'s VP Commercial Planning.
The A330-300 airplane carries 295 people up to 5,650 nautical miles/ 10,500 km, with a 3-class layout.
Its fares will be up to -35% lower than other airlines, and as much as -80% lower when Cebu Pacific (CEB) offers promo fares, giving Filipinos the chance to fly directly to destinations in these cities instead of taking multiple stops and connecting flights, he added.
(CEB) currently operates a fleet of A319s and A320s on short-haul routes within the Philippines and around the region.
(CEB) a unit of Philippine conglomerate JG Summit Holdings Inc, competes with Philippine Airlines (PAL). The long-haul plans will put it in competition against flag carrier (PAL), although (PAL) does not fly directly to the Middle East or to Europe.
It follows Malaysia's AirAsia X (ASX) and Singapore-based, Qantas (QAN) associate, Jetstar Asia (JSA) in offering long-haul, low-cost services from SE Asia. Both operate A330s. Scoot, a subsidiary of Singapore Airlines (SIA), will begin long-haul, low-cost operations out of Singapore in the middle of 2012 using 777-200s.
(CEB) (CEO) Lance Gokongwei said that long-haul, low-cost services were on the cards. He said that there will be a separate management team for (CEB). "It is difficult to do because whenever you bring in new airplanes, it adds complexity. You need management and technical capability. The distribution channels are important." "It can enhance the brand, just like what AirAsia X (ASX) has done for AirAsia (ASW), but it adds complexity. So if you want to do it, you need to make sure you have completely different teams. Don't confuse the management by having them do both," Gokongwei added.
March 2012: Cebu Pacific (CEB) launched its 2nd route to Vietnam on March 17 when (CEB) began operating 2x-weekly services between the country capitals Manila (MNL) and Hanoi (HAN). (CEB), which already serves Ho Chi Minh City in Vietnam, is the only operator on the route. (CEB) previously served Hanoi in 2008, but the Vietnamese capital has at no other point in time been connected with the Philippines until now.
June 2012: SEE ATTACHED "AIRWAYS" COVERAGE - - "CEB-2012-04 - UPDATE-A/B/C/D/E."
July 2012: Cebu Pacific Air (CEB) now serves 52 domestic routes and 28 international routes.
(CEB) has announced plans to open a 4th base in the Philippines at Iloilo International airport (ILO). According to "Airline Route," it will base an A320-200 there from November 8 and introduce new routes to General Santos Buayan (GES), Hong Kong Chep Lap Kok International (HKG), Puerto Princesa International (PPS) and Singapore Changi International (SIN) airports. It already currently serves the airport with domestic flights from Cagayan de Oro Lumbia (CGY), Cebu Mactan International (CEB), Davao Francisco Bangoy International (DVO) and Manila Ninoy Aquino International (MNL) airports.
Cebu Pacific Air (CEB) announced plans to provide in-flight connectivity via OnAir on its A330 fleet starting in 2013. (CEB) also has the option to install Wi-Fi on its fleet of A320s, for short haul flights, in the next phase.
Once Internet OnAir is in service, (CEB) passengers will be able to access the Internet during flights and make calls using Voice Over IP applications, using their Wi-Fi enabled personal electronic devices, such as Android phones and tablets, iPhone, iPad, BlackBerry and laptops. (CEB)’s A330 fleet is scheduled to have Wi-Fi installed mid-next year, in time for (CEB)’s initial deployment of long haul services. (CEB)’s A330 fleet, planned for introduction in the 3rd quarter 2013, will allow (CEB) to provide direct, non-stop flights to regions within the A330’s 11-hour flying range including the Middle East, Australia, parts of Europe and the USA.
(CEB) currently operates 10 A319s, 20 A320s and 8 ATR 72-500s. Between 2012 and 2021, (CEB) will take delivery of +22 more A320s and 30 A321neos. In 2013, (CEB) will take delivery of 4 A330 wide bodies to launch its long haul operations in the same year.
“We are very happy to provide our guests with the convenience of online connectivity while in-flight. (CEB) can now engage passengers through innovative web-based solutions that will further enhance their flying experience with us,” said Candice Iyog (CEB) VP Marketing & Distribution.
“(CEB) is OnAir’s 1st low-cost, long-range Wi-Fi client in Asia. As the air transport market develops, we expect to see more (LCC)s operating long-haul routes and there is no doubt they will want to provide connectivity,” said Ian Dawkins (CEO) of OnAir.
Cebu Pacific (CEB) will sell its entire A319 fleet of 10 airplanes to Las Vegas, Nevada-based Allegiant Travel Company (WJE), according to a statement made to the Philippine Stock Exchange. Deliveries will begin in March 2013 and continue over 15 months.
The 6-year-old A319s are (CEB)’s oldest and smallest jet airplanes.
“The time is right to trade up to bigger, brand new A320 airplanes,” (CEB) President & (CEO) Lance Gokongwei said. “Between now until 2014, Cebu Pacific (CEB) will be taking delivery of 15 brand new A320 and 4 A330 airplanes. (CEB) is likewise exploring options to advance the delivery of A320 orders scheduled for delivery between 2015 to 2016."
(CEB)’s fleet expansion plan allows for demand growth and greater efficiency.
(CEB) will launch long-haul services in the 3rd quarter of 2013 with delivery of up to 8 A330 airplanes, which means it could serve markets such as Australia, the Middle East, parts of Europe and the USA.
(CEB) will offer OnAir Internet service to passengers on its long-haul A330 fleet, slated to begin operations in the 2013 3rd quarter. (CEB) also has the option of installing Wi-Fi on its A320 fleet for short-haul flights in the next phase.
August 2012: Cebu Pacific launched 2 new routes out of Davao (DVO) on southern Philippines’ Mindanao Island on August 1. The Philippine low-cost airline now serves its latest, 6th base (Kalibo (KLO) in central Philippines) as well as Puerto Princesa (PPS) in the west of the country from Davao. Each of the 2 uncontested routes is operated 4x-weekly, on Tuesday, Thursday, Saturday and Sundays, with (CEB)’s 180-seat A320s. (CEB)’s VP Marketing & Distribution Candice Iyog, commented: “Starting today, 2 popular tourism destinations, Puerto Princesa and Boracay, will be within easy reach of Dabawenyos and vice versa. Providing accessibility across the Philippine islands continue to be 1 of (CEB)’s top priorities, and is evident in the rest of the new routes we are launching later this year.”
(CEB) will launch Cebu - Busuanga (3x-weekly) and Tacloban - Legazpi (3x-weekly) ATR 72-500 service on October 4 as well as 4x-weekly, Davao service to Butuan and Dipolog and 3x-weekly Tacloban - Iloilo ATR 72-500 service on October 5. It will also launch 3x-weekly, Zamboanga - Cagayan de Oro A319 service on October 20.
Cebu Pacific (CEB) plans to hire +200 new employees to support the 9 airplanes scheduled to join its fleet later this year and in 2013.
The Philippines’ largest carrier said among the new hires will be pilots (FC), flight attendants (CA) and ground support crew (MT). (CEB) will hold a recruitment fair next week. The additional airplanes will be a mix of A320s, A330s and ATR 72 turboprops.
(CEB) plans to add 5 new domestic routes in October and in November it is slated to launch flights from a new Iloilo hub to Hong Kong, Singapore, and the Philippine cities of General Santos and Puerto Princesa.
It currently connects to 32 domestic and 19 international destinations with a fleet of 39 airplanes.
(CEB) secured export credit agencies-covered financing from (KfW IPEX)-Bank and (SMBC) for the acquisition of 3 new A320 airplanes. All airplanes will be equipped with (CFM56) engines and will increase (CEB)’s total fleet to 41 airplanes. 1 airplane was delivered August 9 in Toulouse. The remaining airplanes are scheduled for delivery in October and November this year. (KfW IPEX)-Bank and (SMBC) are acting as joint Arrangers of the transaction, while (KfW IPEX)-Bank is also acting as Agent and Security Trustee.
September 2012: Cebu Pacific (CEB) will launch 2x-weekly, Cebu service to Bangkok (December 8) and Kuala Lumpur (December 9).
October 2012: Cebu Pacific (CEB) has launched 3 new domestic routes with its 72-seat ATR 72s. On October 4, (CEB) (the biggest carrier in the domestic market, connected Cebu with Busuanga airport (USU) in the west of the country with 3x-weekly. (CEB) also expanded out of Davao (DVO) in the south, launching 2 routes within the island of Mindanao; each 4x-weekly to Butuan (BXU) and Dipolog (DPL) airports.
Cebu Pacific (CEB) later launched services of the 330 km domestic route from Zamboanga (ZAM) to Cagayan de Oro (CGY) in southern Philippines. 3x-weekly A319-operated flights are now offered on the route, which was previously served by Philippine Airlines (PAL). As (PAL) restructures its network, (CEB) continues to explore the newly-arisen opportunities. Candice Iyog (CEB)’s VP Marketing & Distribution, said: “We have enough planes and more are coming this year and in the next few years to cover key local destinations and mount additional flights.” (CEB) has already announced the launch of further 3 domestic routes in October, while its international network is scheduled to expand in the last 2 months of 2012 and will include services from Iloilo to Hong Kong and Singapore; and from Cebu to Kuala Lumpur and Bangkok.
Cebu Pacific Air (CEB) has applied for authorization with the USA Department of Transportation to be allowed to launch scheduled services between Manila Ninoy Aquino International (MNL) and Guam International (GUM) using airplanes wet-leased from a USA carrier from April 2013. The Philippines are currently categorized by the USA Federal Aviation Administration (FAA) as a so called Category 2 country due to flight safety issues. As long as the country as a whole is not upgraded to Category 1 status, no new routes can be launched and no frequency increases by carriers from this country. In its application (CEB) has also indicated that if the Philippines are upgraded, it would plan to later add Saipan Francisco C Ada International (SPN) as another short-haul destination and to use its A330-300s to Honolulu International (HNL), Los Angeles International (LAX) and San Francisco International (SFO) once it starts its long-haul operations.
November 2012: Cebu Pacific (CEB) flew its 70 millionth passenger.
(CEB) expanded its presence in Iloilo (ILO), as it launched its 1st international flights from the airport serving the capital of Western Visayas. (CEB) now offers flights from Iloilo City to both Singapore (SIN), 3x-weekly as of November 9, and Hong Kong (HKG), 2x-weekly from November 8. All services will be operated using (CEB)’s fleet of A320s. (CEB)’s VP Marketing & Distribution Candice Iyog, said: “With these new routes, (CEB) affirms its commitment to provide connectivity to Iloilo and Western Visayas, by basing an airplane here, and making Iloilo 1 of the (CEB)’s operational hubs.”
As (CEB) prepares to enter the longhaul market with A330s in the 2nd half of next year, (CEB) continues to expand on the shorthaul international front as well. Its newest rote will be Manila to Denpasar on the popular tourist island of Bali. It will be (CEB)'s 20th international destination when its 2x-weekly service begins in March.
airphilexpress (PHP) is expected to receive some of the A330-300s recently ordered by parent, Philippine Airlines (PAL) allowing the carrier group to compete better with low-cost carrier (LCC)s Cebu Pacific Air (CEB) and Zest Air (RIT), which both also have long-haul ambitions. The A330-300s allocated to (PHP) will be operated in a single class configuration (400Y) targeting the labor travel market between the Philippines and the Middle East from as early as October next year.
December 2012: Cebu Pacific (CEB) added 2 international destinations to its network from Cebu Airport (CEB), and now offers flights to a total of 6 non-Philippine airports. On December 8, (CEB) commenced 2x-weekly services to Kuala Lumpur (KUL) in Malaysia, which it already serves from Manila with 2x-daily frequencies. On the following day, Cebu Pacific (CEB) returned on the 2,600 km route also from Cebu to Bangkok (BKK), which it previously operated between June and August 2008. Both new routes are offered with 2x-weekly frequencies using A320 family airplanes.
January 2013: Cebu Pacific’s (CEB) new low-cost long-haul unit plans to initially focus on Middle Eastern and regional markets as it works towards launching services with 436Y-seat, A330-300s by July 2013. Dubai will be (CEB)’s 1st long-haul route and will likely be followed by service to Abu Dhabi, Saudi Arabia and Kuwait in 2014. But (CEB) over the medium to long-term, also aims to use its new fleet of A330s to serve Australia and potentially Hawaii. The A330s will operate in an all Economy (Y) Class configuration with ">400 seats" with flights mainly targeting the large number of Filipino workers in the Middle East.
(CEB) will become Asia’s fourth low-cost long-haul carrier, joining Jetstar (IMU), AirAsia X (ASX) and Scoot (SCT). But (CEB) is implementing a different strategy with an all-economy (Y) product and focus on point-to-point traffic. This reflects the different dynamics of the Philippine market, particularly its large overseas population.
Allegiant Travel has canceled its proposed transaction to acquire 10 A319s from Cebu Pacific Air (CEB).
Allegiant (WJE) originally announced the transaction in July after signing a letter of intent (LOI) with (CEB), but canceled the order after failing to agree on several provisions involved in the transaction. "Unfortunately we were unable to come to terms on some of the economic provisions of the transaction and as we have demonstrated in the past, we will not purchase airplanes just for the sake of growth. Our disciplined approach in asset purchases is a core competency that we will not compromise,” said Andrew C Levy, President of the Allegiant Travel Company.
(CEB) took delivery of its 1st A320 equipped with Sharklets becoming the 1st operator of the new fuel-saving wing tip devices in the Philippines.
(CEB) operates an extensive domestic and international network covering 32 destinations in the Philippines and 21 business and leisure destinations across Asia.
February 2013: Cebu Pacific Air ((IATA) Code: 5J, based at Manila Ninoy Aquino International (MNL)) has announced plans to launch daily A330-300s on its existing routes from Manila Ninoy Aquino International (MNL) to both Seoul Incheon International (ICN) and Singapore Changi International (SIN) from July 15 replacing flights operated with smaller A320-200 airplanes on these routes. It had previously already announced Dubai International (DXB) as its 1st long-haul destination to be served from October 7 onwards.
March 2013: Cebu Pacific (CEB) inaugurated flights on its 2nd route from Manila (MNL) to Indonesia on March 16, and now connects the Philippine capital with 2x-weekly services to Denpasar (DPS) in Bali. Flights on the 2,700 km route are carried out using A319s in competition with Philippine Airlines (PAL)’s 3x-weekly services.
(HAECO) (CAT) won a contract from Cebu Pacific Air (CEB) to provide Engineering Services for its fleet of up to 8 A330-300s. It will provide (CEB) with Inventory Technical Management and Fleet Technical Management services.
April 2013: Cebu Pacific (CEB), enhanced its leading position in Philippines’ domestic market, as on April 15 it commenced operations between Cebu (CEB) and Camiguin (CGM). The 150 km route between the country’s oldest city and Camiguin Island, located in Bohol Sea, 10 km north of the Mindanao coast, is now served with 3x-weekly flights. The route brings back to life air connections to the island, as Camiguin’s only airport has been left unserved since October 2008, when SE Asian Airlines (SRQ) withdrew its operations.
June 2013: Cebu Pacific (CEB) has taken delivery of its 1st of 4 A330-300s (SEE PHOTO - - "CEB-A330-300 1ST - 2013-06"), which are being leased from (CIT) Aerospace (TCI). The A330-300 will be used to launch (CEB)’s new long-haul, low-fare operation.
The A330-300 will be configured in a 436Y-passenger, single-class layout. (CEB) will initially use the airplane on medium-haul regional routes, and will launch long-haul services to Dubai in October.
1 A340-343E (1420, RP-C3341), ex-(F-WWTR), (CIT) Aerospace (TCI), (AWAS) (AWW) leased.
(CEB)’s network covers 34 domestic and 22 international destinations across Asia. (CEB) has 47 A320 family airplanes on firm order, including 30 A321neos.
July 2013: Cebu Pacific Air (CEB) has signed operating lease agreements on 2 new A330-300s with USA-based lessor Intrepid Aviation (INL). The A330-300s will be delivered from 2014 to 2015, and will be powered by Rolls-Royce (RRC) (Trent 772B) engines. By 2015, (CEB) will operate a total of 6 new of the type.
(CEB) previously announced it will launch A330-300 long-haul operations with direct daily, Manila - Dubai services on October 7.
“With our A330 fleet strengthened by this lease agreement, we will continue exploring other regions we can serve, such as the Middle East, Australia, parts of Europe and the USA,” Cebu Pacific General Manager Long-Haul Division Alex Reyes said.
August 2013: Cebu Pacific Air (CEB) celebrated the launch of Manila to Phuket flights on August 16, (CEB)’s 4th route to Thailand, whereas the other 3 all serve Bangkok. Candice Iyog (CEB) VP Marketing & Distribution), Prasas Prasasvinitchai (His Excellency), Carmelo Arcilla (Ambassador Extraordinary & Plenipotentiary of the Kingdom of Thailand) and Antonio Jose Rodriguez, (CEB) VP Airport Services) commemorated the inaugural flight of the 3x-weekly route along with the cabin crew (CA)
SEE PHOTO - - "CEB-2013-08 - TO PHUKET."
The 2,580 km route is (CEB)’s 2nd service from Manila to Thailand, as it also serves Bangkok with 12x-weekly. The route has no competition and is (CEB)’s 4th service to Thailand. Candice Iyog (CEB)’s VP Marketing & Distribution said, “We are proud to be the 1st airline to offer direct services between Manila and Phuket, so more travelers can visit Phuket’s world-famous beaches. Similarly, foreign tourists now have the option to add Manila to their itinerary, after they visit Phuket.”
October 2013: Cebu Pacific Air (CEB), has launched daily flights from Manila (MNL), the capital of the Philippines, to Dubai (DXB). This is a route that Emirates (EAD) already serves with 3x-daily. This is (CEB)’s 1st true long-haul service, operated by its recently delivered A330s. (CEB) President & (CEO) Lance Gokongwei said during the flight launch ceremony, “When you, dear guests, land in Dubai later tonight, it will be aboard the first Philippine carrier to land in Dubai in 15 years. We proudly carry the Philippine flag in this historic moment. When we say we fly to where Filipinos are, we mean it. This was our mindset when we launched our 1st international flight to Hong Kong in 2001. This remains our mindset as we launch our 22nd international destination now.” Cebu Pacific (CEB)’s 47-strong fleet is comprised of 10 A319s, 27 A320s, 2 A330s and 8 ATR 72-500 airplanes. Between 2013 and 2021, (CEB) will take delivery of 15 more brand-new A320s, 30 A321neos, and 4 A330s.
December 2013: Cebu Pacific Air ((IATA) Code: 5J, based at Manila) (CEB) is looking to renew a permit that grants it access to the United States. In its application lodged with the USA Department of Transportation (DoT), the Filipino carrier stated that although it had yet to commence any flights to the USA under the exemption, it was seeking to renew its permit "so that service may begin without delay when appropriate." Cebu's exemption grants it rights to operate scheduled foreign air transportation of persons, property, and mail from the Philippines via intermediate points to Honolulu, San Francisco, Los Angeles Internatioal, Guam International, Saipan and four additional points in the USA on the condition that (CEB) engages in such operations under a wet-lease arrangement only. Though the Philippines has languished on the Federal Aviation Administration's Category 2 safety ratings since 2008, an (FAA) team was due in Manila in November to conduct a mini audit which locals had hoped, would result in an upgrade to Category 1. However, the inspection has since been postponed until January 2014.
(CEB) currently operates 48 airplanes and serves 15 countries, 57 destinations, on 97 routes and 342 daily flights.
A320-214 (5917, RP-C3279), ex-(D-AUBC), delivery.
January 2014: Cebu Pacific (CEB) will acquire 100% ownership of no-frills carrier Tigerair Philippines (SRW) as part of a strategic alliance between (CEB) and Singapore-based Tigerair (TGR).
The deal includes the 40% of Tigerair Philippines (SRW) owned by Tigerair (TGR) as well as the 60% stake owned by local partners, and is reportedly worth $15 million.
(TGR) said Tigerair Philippines (SRW) had been loss-making since the 40% stake was acquired in 2012 and expected to receive $7 million for the sale of that stake. (TGR) said, “Assuming the proposed sale had completed September 30, 2013, the estimated net loss arising from the proposed sale is -S$13.5 million/-$10.6 million.”
The strategic alliance will see (CEB) and (TGR) collaborating commercially and operationally on international and domestic air routes to and from the Philippines, harnessing synergies and efficiencies to enhance their network coverage, flight frequencies and customer service. The airlines will jointly market routes using code share and interline arrangements plus, subject to regulatory approval, will jointly operate common routes between Singapore and the Philippines.
Tigerair Group (CEO) Koay Peng Yen said: “Tigerair (TGR) and (CEB) share a vision for both airlines to join forces and create the largest budget airline network between Asia and the Philippines. This partnership with (CEB) is consistent with our asset-light strategy and builds upon our other alliances.”
Both carriers will brand themselves as partners in communication material, and both (TGR) and (CEB) websites will be used as sales and distribution platforms to market all routes operated by both carriers. They also expect to collaborate on other common destinations in Asia.
(CEB) President & (CEO) Lance Gokongwei said the strategic alliance “will allow both (CEB) and (TGR) to leverage on our extensive networks spanning from N Asia, (ASEAN), Australia, India, all the way to the Middle East.”
Tigerair Philippines (SRQ), which will initially continue to operate under the Tigerair brand, operates to 11 domestic and international destinations with 5 airplanes from bases in Manila and Clark. (CEB) has a fleet of 48 airplanes serving 24 international and 33 domestic destinations.
The two alliance partners said that by combining their resources, (CEB) would be able to provide services to high growth markets including Australia and India, while (TGR) would have access to (CEB)’s extensive network in the Philippines and N Asia. They said the arrangement “allows both airlines to deploy capital more efficiently.”
February 2014: Cebu Pacific Air (CEB)will use (AMOS) Maintenance Repair & Overhaul (MRO) software, and implementation is expected in about six months.
March 2014: The Philippine government plans to upgrade 12 airports, including Manila's dilapidated main international airport, as it seeks to attract 10 million foreign tourists by 2016 and help fuel one of Asia's fastest growing economies. 3 of the projects have a combined cost of up to 54.6 billion pesos/$1.22 billion, while costs for others are still being finalized. Half of the planned projects will be done through the Public-Private Partnership (PPP) scheme, Cosette Canilao, Executive Director at the agency overseeing the program said. Canilao also said operations and maintenance of these airports could be "bundled" into one tender, which will be offered to investors later this year.
Transportation Undersecretary, Rene Limcaoco said the government was looking at building a new terminal for the Ninoy Aquino International Airport (NAIA) in Manila, the Philippines' main gateway, which is also undergoing repair. The Puerto Princesa Airport on Palawan island, southwest of Manila, and Clark International Airport in Pampanga, north of the capital, are included in the list of gateways, which the government wants to modernize and upgrade. The planned upgrades will "ease our logistic costs, alleviate our traffic congestion and support the target of the department of tourism to achieve its 10 million tourists for 2016," Limcaoco said.
The Philippines attracted 4.7 million foreign tourists last year, 300,000 short of its goal, state data showed. President, Benigno Aquino wants to make the tourism sector one of the key drivers of the economy. The economy grew +7.2% in 2013, the 2nd fastest in Asia after China.
Rehabilitation of (NAIA) Terminal 1 will be completed by early 2015 at the latest, while the airport's Terminal 3 will be fully-operational in July this year, said Limcaoco. He also said the transportation department is sticking with its end of March target to award the 17.52 billion-peso/$391 million (PPP) contract for the Mactan - Cebu International Airport Terminal.
A330-343E (1495, RP-C3343), ex-(F-WWTO), (CIT) Aerospace (TCI) leased.
April 2014: The (FAA) has upgraded airlines in the Republic of the Philippines to a Category 1 rating, as it now complies with international safety standards set by (ICAO).
The country previously held a Category 1 rating until January 2008, when it was downgraded to a Category 2. According to the (FAA), a Category 2 rating means a country either lacks laws or regulations necessary to oversee air carriers in accordance with minimum international standards, or that its civil aviation authority (equivalent to the (FAA) for aviation safety matters) is deficient in 1 or more areas, such as technical expertise, trained personnel, record keeping or inspection procedures.
The (FAA) said the return to Category 1 status “is based on a March 2014 (FAA) review of the Civil Aviation Authority of the Philippines. With the International Aviation Safety Assessment Category 1 rating, the Republic of the Philippines’ air carriers can add flights and service to the USA and carry the code of USA carriers,” the (FAA) said.
The European Union (EU) lifted a ban on Cebu Air (CEB) of the Philippines under the latest changes to a list of unsafe carriers. The (EU) said "the gradual improvement in air safety in the Philippines" justifies letting Cebu Air (CEB) fly in the 28-nation bloc. The decision, 9 months after Philippine Airlines (PAL) won the same right, marks the 2nd scaling-back of a March 2010 (EU) prohibition against all Philippines-based carriers.
"When countries do what it takes to ensure the safety of their aviation industry, it is important that the (EU) recognizes these efforts," European Transport Commissioner Siim Kallas said in Brussels. This is the 23rd update of a blacklist first drawn up by the European Commission (EC), the (EU)'s regulatory arm, in March 2006 with >90 airlines, mainly from Africa. The ban covers passenger and cargo carriers from nations including the Democratic Republic of Congo, Equatorial Guinea, Gabon, Liberia, Sudan and Zambia.
May 2014: Philippine low-cost carrier (LCC) Cebu Pacific Air (CEB) has applied to the country’s Civil Aeronautics Board (CAB) to be designated as the official Philippine carrier to New Zealand.
The Cebu Pacific application, which is due to be heard in mid-May, follows the European Union (EU)’s decision to lift its safety ban on (CEB) in April, after the (FAA) upgraded the aviation authorities controlling the Republic of the Philippines to a Category 1 rating. All Philippine airlines had been banned from flying to (EU) destinations in 2010.
Cebu Pacific (CEB) is also requesting rights to operate up to seven flights a week under terms of a confidential memorandum of understanding (CMOU), signed between the Philippine and New Zealand governments in March, amending the existing air services agreement that was concluded in 2009.
The new (CMOU) allows for an increased number of flights between the two Pacific Rim nations, up from 3 to 21 flights a week. It also includes 5th freedom rights, allowing Philippine carriers the right to operate on to Australia and New Zealand carriers on ward rights to China.
The (CMOU) also allows for 3rd country code sharing for carriers from both countries.
(CEB) President & (CEO) Lance Gokongwei has reportedly said (CEB) now has long-haul aspirations and is eyeing services to Hawaii and Guam, as well as European destinations such as London, Paris and Amsterdam. He told the Philippines’ "ABS-CBN News" that (CEB) plans to grow its fleet by +50 more Airbus airplanes between now and 2021 to facilitate the expansion.
Cebu Pacific (CEB) took over total ownership of Tigerair Philippines (SRQ) earlier this year and is considering re-branding the carrier. It is understood to have applied to the (CAB) for regulatory approval to change its corporate name to "Go Air."
Sabena Technics (SAB) has signed a 5-year integrated services contract with Cebu Air (CEB). The Maintenance Repair & Overhaul (MRO) provider (SAB) will provide (CEB) with a range of solutions, including pool access, repair and overhaul of rotable components, for 8 ATR72-500s.
A330-343E (1527, RP-C3344), ex-(F-WWYO), (CIT) Aerospace (TCI) leased.
June 2014: Cebu Pacific (CEB) will operate direct flights from Manila to Sydney, Australia, and Kuwait in September, to serve Filipino expatriates and open more opportunities for tourism.
The new nonstop, Manila - Kuwait service will operate 3x-weekly from September 2, with the new nonstop Manila - Sydney service starting September 9 and operating 4x-weekly.
Cebu Pacific (CEB) said that “as the only low-cost carrier (LCC) offering this route,” it hoped “to stimulate travel both ways with this new service.” Both new routes will be operated using (CEB)’s Airbus A330-300 airplanes configured with 436Y all-economy class seats.
In the long-haul sector, (CEB) also operates direct flights between Manila and Dubai, and has applied to the Philippines Civil Aeronautics Board (CAB) to be designated as the official Philippine carrier to New Zealand.
July 2014: Cebu Pacific Air (CEB) has added another domestic route in the Philippines. On June 30th (CEB) introduced 3x-weekly (Mondays, Wednesdays, Fridays) flights utilizing its 72Y-seat ATR airplanes on the 285 km route between Cebu (CEB) and Tandag (TDG), the capital city of the province of Surigao del Sur. Jorenz Tanada, VP Corporate Affairs.
SEE - - "CEB-3-JORENZ TANADA-2014-06" said: “The addition of this 3x-weekly Cebu - Tandag service to our network reinforces our commitment to make it easy to travel around the Philippines. Before, the closest airport with commercial flights was Butuan, which is approximately 5 hours away from Tandag by land. Now, Tandag is just a 65-minute flight from Cebu.” Tandag in Surigao del Sur is the gateway to the Enchanted River, the Britannia Group of Islands, Cagwait Beach, Tinuy-an Falls and the surfing spot of Lanuza.
August 2014: Philippine low-cost carrier (LCC), Cebu Pacific Air (CEB) reported 2nd-quarter net income of +PHP3 billion/+$69 million, up significantly from the +PHP257 million, reported for the same period last year.
Total revenue for the quarter increased +33.7% to PHP14.95 billion year-over-year. 2nd-quarter passenger revenues grew +36.3% to PHP12 billion and average yield per passenger, was up +12.6%.
(CEB) VP Corporate Affairs Attorney, Jorenz Tañada said: “Cebu Pacific Air (CEB)’s net income growth in (Q2) 2014 was driven by increased passenger traffic backed by industry rationalization. Yields also increased, as we now fly longer sectors to more destinations, including Dubai and Japan. As we served more passengers, we also noted a significant increase in ancillary revenues.”
Passenger traffic grew +19.7% to 4.7 million, pushing load factor up +1.4% points to 88.2% LF for the quarter.
2nd-quarter (RPK)s increased +27.6% to 4.4 billion, while (ASK)s were up +28.3% to 5.2 billion, as average sector length increased. Ancillary revenues for the quarter grew +27.4% to PHP2.2 billion, driven by a +6.4% increase in ancillary revenue per passenger, and increased passenger numbers.
Looking ahead, (CEB) said forward bookings for the next 3 months show about +6% growth year-on-year, with some 24% of seats for the next quarter already sold.
The results include the operating statistics and financial results of Tigerair Philippines (SRQ), which Cebu Pacific (CEB) acquired earlier this year.
Cebu Pacific (CEB)'s net income jumped by +125%t to 3.18 billion peso in the 1st half of the year from 1.41 billion peso in the same period last year on the back of higher revenues.
Gokongwei-led Cebu Pacific (CEB) is seeking more seat entitlements for its flights to Hong Kong and Taiwan.
The budget airline has filed an application before the Civil Aeronautics Board (CAB) seeking the reallocation of additional entitlements of 1,260 weekly seats on its Clark to Hong Kong route and vice versa from unused seat entitlements previously allocated to other airlines.
(CEB) is likewise seeking the reallocation of additional entitlements of 1,237 seats for its Manila to Taipei route from seats under-utilized by Philippine Airlines (PAL).
Cebu Pacific (CEB) has daily services to Hong Kong via Clark and to Taipei via Manila.
The airline wants to buy more airplanes, as it plans to mount long-haul flights to Guam and Hawaii, following the upgrade of the country's aviation safety rating back to Category 1 last April.
Cebu Pacific (CEB) is also set to launch direct flights to Kuwait and Sydney by September.
(CEB)’s long-haul unit is entering a new phase of growth which will also see it evolve to pursue more transit traffic. (CEB) initially envisioned a pure low cost carrier (LCC) model for its long-haul low-cost unit, relying almost entirely on point to point traffic, but is now looking to build up connections, particularly to feed its new Manila - Sydney route.
In September 2014, Sydney and Kuwait will become (CEB)’s 2nd and 3rd long-haul destinations after Dubai, where its performance has improved in recent months, following a dismal start in the 4th quarter (4Q) 2013. (CEB)’s A330 fleet, which now consists of 4 airplanes with a 5th to be added by the end of August 2014, has until now been primarily used to upgrade short-haul routes.
The upcoming launch of services to Australia and Kuwait will be followed by Saudi Arabia in (4Q) 2014 and Hawaii in early 2015. Sharjah may also be launched in 2015 as (CEB) considers leasing additional A330s.
The following is the 1st part of a report on Cebu’s now 14-month-old wide body operation. This part focuses on the new Manila - Sydney route and connection opportunities beyond Manila. The 2nd part (immediately following below) will look at Cebu’s plans for Saudi Arabia and the prospects of a Sharjah service. It also examines the overall Philippines - (UAE) market, including (CEB)’s performance in Dubai.
(CEB) began operating A330s in June 2013, becoming the 4th (LCC) in the Asia-Pacific region with wide bodies after Jetstar (IMU), AirAsia X (ASX) and Scoot (SCT). Daily services to Dubai were launched in early October 2013, after an initial period of operating the 1st 2 A330s on regional routes.
Cebu Pacific (CEB) currently uses its A330-300 fleet for Dubai and several short-haul routes. Some frequencies from Manila to Singapore, Seoul, Cebu, and Davao are operated regularly with A330s. The A330 is also being used to fly to Tokyo Narita during select days for the peak northern summer season and has previously been used to serve Hong Kong during peak periods ((CEB) is unable to use the A330 regularly on the Manila Hong Kong route, due to bilateral capacity constraints, unless it reduces frequencies, which is not a sensible alternative, as slots at Hong Kong are at a premium, and (CEB) would like to maintain its current Manila - Hong Kong schedule of four daily flights).
(CEB) currently operates 4 A330-300s in single-class configuration with 436 seats. (CEB) is the only long-haul (LCC) with an all-economy (Y) configuration. Jetstar (IMU), AirAsia X (ASX) and Scoot (SCT) all offer a premium product, with (IMU) and (SCT) providing a recliner style seat and premium economy (PY)-like product, while (ASX) offers an angled lie-flat business (C) seat.
(CEB) still does not see a need to introduce a premium product as its target market is overseas workers. The Philippine market is extremely price sensitive with limited premium demand.
(CEB), however, is starting to recognize the value of feed. Its initial long-haul model envisioned relying on point to point traffic, with a focus on the Manila - Middle East market. This market consists predominately of Filipino workers and to a lesser extent, visiting friends and relatives (VFR), as (CEB)’s low fares stimulate more frequent visits by families living back in the Philippines, as well as more frequent trips home by the expatriates.
(CEB) for several years has offered a transit product, which, for an additional fee, offers a through check-in, including transfer of checked bags. But (CEB)’s overall portion of transit traffic is very low (<5%), including from wide body flights. (CEB) has no intention of migrating to an origin and destination pricing model, or starting to work with global distribution system (GDS) providers, initiatives that AirAsia X (ASX) has adopted in pushing up its transit traffic component to nearly 50%.
See related AirAsia X (ASX) report: "AirAsia X (ASX) drives 43% transit traffic at Kuala Lumpur's (KLIA) airport. Can Singapore (SIA) follow the same recipe?"
(CEB) plans to stick with a traditional sum of sectors, (LCC) approach in pricing connections. (CEB), however, is hybridizing to some extent, by promoting more connections between (CEB) flights and onto flights operated by other airlines.
(CEB) recently began interlining with Tigerair (TGR), its 1st interline partnership with another (LCC). It also recently worked with Middle Eastern (LCC), Air Arabia (ABZ) to promote connections beyond Sharjah, which it served for 12 weeks during the recent runway closure at Dubai, but not through a formal interline or Information Technology (IT) link.
(CEB) sees its Manila to Dubai route, which resumed in late July 2014 after the Dubai airport fully reopened, as continuing to consist nearly entirely of point to point traffic. But (CEB) is aiming to generate a larger portion of transit passengers on its new Sydney to Manila route, which it plans to launch on September 9th 2014, with 4x-weekly flights. The General Manager of (CEB)’s long-haul division, Alex Reyes said at the recent Australia Pacific Aviation Summit in Sydney, that (CEB) is particularly pushing connections to Hong Kong.
Sydney to Hong Kong is a large local market served with 5 daily non-stop flights, including 4 from Cathay Pacific (CAT) and 1 from Qantas (QAN). But the market has not grown over the past several years due to bilateral constraints.
The Sydney to Hong Kong market generally suffers from higher average fares than other large Sydney to Asia city pairs such as Singapore, Kuala Lumpur, and Bali, because it lacks a non-stop (LCC) option (Singapore, Kuala Lumpur, Hong Kong, and Bali are all top 10 international destinations from Sydney, based on current seat capacity).
Singapore Airlines (SIA) long-haul (LCC) subsidiary, Scoot (SCT) serves Singapore to Sydney, while AirAsia X (ASX) serves Kuala Lumpur to Sydney and Jetstar (IMU) serves Bali - Sydney. (ASX)’s new Indonesian affiliate (AWR) is also expected to launch Bali - Sydney service by the end of 2014.
(SCT) and (ASX) now offer a one-stop product in the Sydney to Hong Kong market, but routing passengers via Singapore or Kuala Lumpur is more circuitous than Manila. Currently, the fastest connections on AirAsia (ASW)/AirAsia X (ASX) from Sydney to Hong Kong is about 16 hours (with a layover in Kuala Lumpur of about 3 hours), while the fastest connection from Hong Kong to Sydney is about 14 hours (with a layover of only slightly >1 hour). (SCT) connections are generally longer, ranging from 15 to 19 hours (includes Singapore to Hong Kong flights operated by (SCT) and Scoot (SCT) partner, Tigerair (TGR)).
In comparison, (CEB) will offer a total journey time of about 12 hours in both directions (slightly <12 hours on Sydney to Hong Kong, and slightly >12 hours on Hong Kong to Sydney). (CEB)’s Sydney to Manila flight lands at Manila at 17:30, or 100 minutes before the last of (CEB)’s flights from Manila to Hong Kong. The 3rd of (CEB)’s 4 daily flights from Hong Kong, lands in Manila at 21:30, or just <3 hours before the new 00:15 departure for Sydney.
(CEB) is also offering an array of domestic connections at Manila, which will particularly be targeted at Australians going on holiday, because the main leisure destinations in the Philippines (such as the islands of Boracay and Palawan) can be only accessed by domestic flights. (CEB) is hoping to stimulate demand in the outbound Australian market (which grew by +25% over the last 2 years), although the Filipino worker and (VFR) segment is its main focus. (CEB) says there are about 170,000 Filipinos living in Australia, including about 70,000 in New South Wales, while in 2013, only 56,000 Australians visited the Philippines.
There are huge opportunities for the Philippines' emerging tourism sector to attract more Australians, particularly as lower fares make holidays in the Philippines as inexpensive as Bali. But there are likely more growth opportunities for (CEB) in carrying passengers beyond Manila (both Australians and N Asian residents).
Manila is geographically well positioned for connections between Sydney and N Asia, in addition to the obvious example of Hong Kong. Alex Reyes said there is a big opportunity to carry Sydney passengers beyond Manila and added: “We want to get people to hop to N Asia.” Alex Reyes singled out Beijing, Seoul, Shanghai, Taipei, and Tokyo, as well as Hong Kong. He pointed out that flight times from Manila to all these destinations are 2 or 3 hours less, compared to Kuala Lumpur.
SEE ATTACHED "CEB-2014-08 SYDNEY TO ASIA ROUTES."
Flight times from Singapore are similar given the close proximity of Kuala Lumpur and Singapore. As flight times from Sydney to Singapore, Kuala Lumpur, and Manila are similar, routings via Manila are more direct.
SEE ATTACHED "CEB-2014-08 INTERNATIONAL NETWORK."
But quick connections will only be available in both directions for Hong Kong. Beijing, Seoul, Shanghai, Taipei, and Tokyo are only served by (CEB) from Manila, with 1 daily flight or less, making it more difficult to offer a competitive product from a schedule perspective. AirAsia X (ASX) generally provides faster transit times, as it serves most of these destinations as well as Sydney with 2 daily flights. Among these 5 destinations, Scoot (SCT) currently only provides a 1-stop product in the Sydney to Taipei market.
(ASX) has become a major player in the Australia to N Asia market over the past year, as it has added a 2nd daily flight to Sydney, Melbourne, and Perth, providing a huge increase in capacity that could be not supported entirely by the Malaysian market and connections within SE Asia. The entrance of (CEB) adds even more (LCC) capacity in the Australia to SE Asia market, providing another increase, which once again, will require a significant share of connecting traffic to N Asia to be sustainable.
With the launch of services from (CEB), Australia will have all 4 long-haul (LCC)s from the Asia-Pacific region, with >100,000 weekly seats. This includes about 50,000 seats from Australia-based Jetstar Airways (IMU), which has roughly two thirds of its international capacity at its long-haul unit. There are also about 45,000 weekly short-haul (LCC) seats in the Australian international market operated by Jetstar Airways (IMU), Jetstar Asia (JSA), Indonesia AirAsia (AWR), and Tigerair (TGR).
(CEB) could still attract some price sensitive customers in the Sydney to N Asia, excluding Hong Kong market, who do not mind long layovers or stopovers in Manila in one direction. But the real volumes would come if and when (CEB) adds frequencies in its N Asian markets.
(CEB) has the setup in Manila to offer fast connections, but without the schedules, this will not be fully utilized. Alex Reyes said (CEB)’s integrated operation at Manila Terminal 3 enables connections in as little as 1 hour with through baggage.
Taipei, which is already a large connection market for the Australian long-haul (LCC) operations of (SCT) and (ASX), could particularly be attractive if (CEB) expands on the Manila to Taipei route. Currently, (CEB)’s only flight from Taipei arrives in Manila at 03:05, or 3 hours after the Sydney flight departs (requiring a 21 hour connection time), while from Sydney to Taipei, a transit time of just <5 hours is available. There are currently only 4 non-stop weekly flights from Sydney to Taipei, all on full-service flag carrier, China Airlines (CHI).
In the Sydney to Beijing, Shanghai, and Seoul markets, a long connection (15 to 20 hours) is similarly required on the return. Tokyo has about a 12 hour connection from Sydney, and about an 8 hour connection on the return. Connections to Japan could improve, as (CEB) has been expanding rapidly in the Japanese market since a new bilateral agreement last year opened up opportunities for Filipino carriers. (CEB) over the past year, has launched services to Tokyo Narita and Nagoya, while upgrading Osaka, which had been its only Japanese destination, to daily and is now seeking to take over 1 of the 2 daily flights to Haneda recently dropped by (PAL).
Narita is currently the only Japanese airport served non-stop from Sydney. The route is served only by full-service carriers, with Qantas (QAN) and Oneworld (ONW) Alliance partner, Japan Airlines (JAL) each operating 1 daily flight on the route. Jetstar (IMU) serves Tokyo from Cairns, the Gold Coast, and Melbourne with domestic connections at both ends, using (IMU) from the 3 Australian gateways (including to Sydney) and Jetstar Japan (JJP) from Narita.
Opportunities for (CEB) in the Sydney to mainland China market, which has emerged as a large target market for AirAsia (ASW), are more limited as (CEB) doesn’t have as large a network in China. It currently serves the three major Chinese cities (Beijing, Guangzhou and Shanghai) with less than daily flights, and has only one secondary destination (Xiamen, which is served with only 2 weekly flights). Growth in China is not likely at least for the short to medium term given the current state of relations between China and the Philippines.
But Hong Kong (and potentially other N Asia connections as Cebu’s schedule thickens) will clearly play a big role in (CEB)’s performance in the Sydney market and be a factor in potential expansion into other Australian markets. Alex Reyes said that since ticket sales for the new Sydney to Manila route began in mid-June 2014, bookings have been “quite good.”
(CEB) plans to increase Sydney from 4x- to 5x-weekly flights from December 2014. A further expansion to Australia is possible in 2015, but requires an expansion of the Australia to Philippines air services agreement.
The current bilateral is capped at 6,000 weekly seats, with 2,200 now allocated to (CEB) and 3,800 to Philippine Airlines (PAL). This cap applies only to Melbourne, Sydney, Perth, and Brisbane; Philippine carriers are free to serve other Australian airports with unlimited capacity.
(PAL) is expected to fully utilize its capacity allocation from December 2014, when it plans to upgrade Sydney from 4x-weekly to daily flights. Philippine authorities are keen to expand the bilateral, which would enable both Cebu Pacific (CEB) and (PAL) to expand. Alex Reyes said (CEB) is interested in serving multiple destinations in Australia.
With additional traffic rights, (CEB) could launch Melbourne as early as 2015, and upgrade Sydney to daily. (PAL) has said it is interested in launching non-stop service to Perth and Brisbane (Brisbane is now served 3x-weekly via Darwin, while Perth was also briefly served via Darwin in 2013).
(CEB) could also eventually serve Perth and Brisbane, but Melbourne is more likely in the near to medium term. (CEB) sees Perth as a potential destination for its future fleet of A321neos, as the market is likely too thin to support an A330. (CEB) does not believe the A321neo will have the range to serve Brisbane, although this could be re-examined after the new type enters service.
(CEB) however, 1st needs to build a sustainable business case in Sydney, which could prove to be challenging. (CEB) will have to overcome stiff competition and potential overcapacity on the Manila to Sydney route.
Qantas (QAN) serves Sydney to Manila with 4x-weekly flights while (PAL)’s recent decision to increase Sydney to daily, in response to (CEB)’s entrance, puts pressure on a market which has traditionally been relatively small, with large seasonal fluctuations. While (PAL) has been in Australia for decades, (CEB) is a relatively unknown brand in the Australian market.
Sydney has a relatively large Filipino population, but the community is not large enough to support 16x-weekly flights, except during peak travel periods such as Christmas and Easter. The 16x-flights will provide about 2,200 one-way seats, nearly double current capacity levels.
Transit traffic to N Asia should help, but (CEB) will face stiff competition in the Sydney to N Asia market from more established long-haul (LCC)s, particularly AirAsia X (ASX), which is now the 4th largest foreign carrier in the Australian market. (CEB) will need to increase frequencies in several key N Asia markets, in order to offer attractive connections from Sydney to cities other than Hong Kong.
To be competitive and build a sustainable operation in Australia, (CEB) may also have to consider adopting an origin and destination pricing model and pursuing stronger relationships with travel agents, including on line travel agents. (CEB) is entering the Australia to Asia market at a time competition is extremely intense, pressuring yields and load factors at all airlines. It will take a lot more than low fares and a low cost structure to carve out a profitable niche.
(CEB) is planning to grow its long-haul network from 1 to 6 destinations over the next 6 months. In addition to the already announced new destinations of Sydney and Kuwait, (CEB) is close to setting a launch date and beginning ticket sales for Dammam and Riyadh in Saudi Arabia.
(CEB) is also aiming to launch Honolulu in early 2015 and is keen to secure additional traffic rights to the (UAE), to enable the launch of Sharjah. Cebu Pacific (CEB) already serves Dubai, its only current long-haul destination, which is now performing relatively well following an extremely disappointing initial performance.
The forthcoming network expansion will provide the biggest test yet for (CEB)’s long-haul unit. In the 1st 14 months of wide body operations, (CEB) has mainly used its fleet of A330-300s to operate regional routes. This is the 2nd part of an analysis report on (CEB)’s now 14 month old wide body operation. The 1st part (above) focused on the Manila to Sydney route, which will be launched on September 9th, 2014, and connection opportunities beyond Manila. This 2nd part of the report looks at (CEB)’s plans for Saudi Arabia and the prospects of a Sharjah service. It also examines the overall Philippines to (UAE) market, including (CEB)’s performance in Dubai.
Cebu Pacific (CEB)’s 2nd long-haul destination will be Kuwait, which will be served with 3x-weekly flights from September 2nd 2014. Manila to Kuwait will be a unique route for (CEB)’s long-haul unit as it is the only route among its 1st 6 long-haul routes (including 5 that have not yet been launched) that is not currently served non-stop by any carrier.
The Manila to Kuwait market is now served on a 1-stop basis by several carriers, led by Emirates (EAD), Etihad Airways (EHD), and Qatar Airways (QTA). Cebu Pacific (CEB) is banking on Kuwait having a sufficient Filipino community to support a non-stop service. Kuwait does have a sizeable Filipino community (approximately 200,000), although it is smaller than the Filipino communities in (CEB)’s other initial long-haul markets (the (UAE), Saudi Arabia, Australia, and Hawaii).
(CEB) began selling Kuwait in July 2014 (at the same time as Sydney). Unlike the Sydney market, where (CEB) expects some outbound Australian leisure traffic, as well as a significant share of transit traffic, Kuwait will be virtually entirely, a point to point Filipino labor market.
(CEB) will be the 9th (LCC) serving Kuwait. But it will be the 1st (LCC) in Kuwait with long-haul services. (LCC)s currently account for about 30% of total seat capacity at Kuwait International Airport.
Kuwait-based Jazeera Airways (JZI) is by far the largest (LCC) in the Kuwait market and its approximately 14% share of total seat capacity makes it the 2nd largest airline in Kuwait after flag carrier, Kuwait Airways (KUW). (JZI) could emerge as a potential partner for (CEB), as its Kuwait base features 15 routes throughout the Middle East, Egypt, and Turkey. But at least for now, (CEB) is targeting the local Kuwait to Philippines market, and the approximately 200,000 Filipinos living in Kuwait, as well as their families residing back in the Philippines.
Saudi Arabia is also expected to be almost entirely a point to point market for (CEB), although there could potentially be an opportunity to work with Saudi (LCC) flyNas (NAZ). (CEB) has not yet set a launch date or begun tickets sales to Saudi Arabia, but has been preparing for the last year, to serve both Dammam and Riyadh.
Initially, Dammam and Riyadh were slated to be (CEB)’s 2nd and 3rd long-haul destinations after Dubai, with a launch anticipated in 1st half (1H) 2014. But (CEB) has encountered several delays in securing approvals from Saudi authorities.
The General Manager of (CEB)’s Long-haul DivisionAlex Reyes, said that the final approvals from Saudi Arabia should be secured shortly, allowing for a launch within the next couple of months. “We are about ready to push the button,” he said.
As passengers (or their labour contractors) in the Philippines to Middle East market typically make purchasing decisions with short notice, (CEB) believes it can launch Saudi Arabia within only a few weeks of starting ticket sales. (CEB) is initially planning to operate 3x-weekly flights to Dammam, as well as 3x-weekly frequencies to Riyadh. It will compete against Philippine Airlines (PAL) on both routes, which launched Manila to Dammam and Riyadh services in late 2013. (PAL) currently serves Riyadh with 4x-weekly A330 flights and Dammam with 3x-weekly A330 flights. Saudia (SVA) also serves the Manila to Riyadh market with 7x-weekly flights, and operates 3x-weekly flights from Manila to Dammam.
Cebu Pacific (CEB) has sufficient traffic rights to operate up to 7x- weekly flights to Riyadh and has unlimited access to Dammam, which has been designated by Saudi Arabian authorities as an "open skies" airport. (CEB) could also potentially use some of its 7x-weekly Philippines to Saudi Arabia rights for Jeddah, but earlier, ruled out Jeddah as it sees a larger market in Riyadh and Dammam. (PAL) also initially planned to serve Jeddah, but prior to launching services to Saudi Arabia in late 2013, decided to only enter the Dammam and Riyadh markets.
Alex Reyes said that Dammam, Riyadh, Kuwait, Sydney, and Dubai will use the equivalent of 3 A330s. That will leave the equivalent of 2 A330s for short-haul routes.
(CEB) plans to take its 5th A330-300 at the end of August 2014 (prior to the launch of Kuwait and Sydney). (CEB) sees leaving 2 airplanes for short-haul flights as ideal, given the success it has had over the past year in operating A330s on short-haul routes.
Alex Reyes said that (CEB) has discovered the A330 is efficient for shorter sectors, enabling (CEB) to lower its cost per seats in thick short-haul markets.
The 6th and final A330-300 from (CEB)’s current commitment with leasing companies is slated to be delivered in the 1st quarter (1Q) 2014. This A330 will support the launch of services to Honolulu, which Alex Reyes says will initially be served with 3x-weekly flights.
(CEB) is now working on securing (FAA) authority to operate flights into the USA. Previously the carrier was unable to even seek such authority as the Philippines had a Category 2 safety rating. Philippine authorities secured a Category 1 rating in April 2014, enabling Philippine Airlines (PAL) to pursue expansion and gauge changes in the USA market, and enabling (CEB) to begin preparations to enter the USA market. (CEB) and (PAL) are poised to expand in the USA, following the Category 1 upgrade
(CEB)’s 1st USA route will be Honolulu to Guam. (CEB) plans to launch Guam by the end of 2014 using its A320 fleet. Honolulu will take slightly longer to launch as (CEB) 1st needs to secure Extended range Twin-engine OPerationS (ETOPS) approval for its A330 fleet ((CEB) is not seeking (ETOPS) for its A320s, which will necessitate a slightly longer routing to Guam in order to meet diversion airport requirements).
While (CEB) is only committed to 1 additional A330 beyond the 5th airplane, it will take at the end of August 2014, the business plan for its long-haul unit has always envisioned a fleet of 8 A330-300s. (CEB) is now looking at potentially leasing +2 more A330s in 2015 (in addition to the 1 A330 already committed for (1Q) 2015), giving it a fleet of 8 A330s by the end of 2015.
The 2 additional A330s will enable further expansion of the long-haul network beyond Honolulu, which is expected to become (CEB)’s 6th long-haul destination after Dubai, Kuwait, Sydney, Dammam, and Jeddah. One option under consideration as (CEB)’s A330 fleet expands to up to 8 A330s in 2015, is Sharjah, which (CEB) served briefly from May 1st 2014 to July 20th 2014, during the runway repair project at Dubai.
Other new long-haul destinations, including South Africa, New Zealand, and Russia have been mooted but ruled out, as (CEB) is focusing on markets with large Filipino expatriate communities. The Middle East continues to be the main focus, as it has the largest overseas Filipino population outside North America, which is not within range of (CEB)’s A330s, with the exception of Hawaii (Of the approximately 4 million Filipinos residing in North America, about 350,000 live in Hawaii).
(CEB) does not want to rely significantly on in bound tourism, although in markets such as Australia, inbound traffic is being pursued (along with transit traffic) to help make the market viable. Sharjah is a more traditional (CEB) market, as it will cater to Filipino workers with the added benefit of being an (LCC) hub, enabling connections to destinations throughout the Middle East (as well as parts of Eastern Europe, Central Asia, and Africa) which have Filipino populations, but may not be large enough to support non-stop service.
Air Arabia (ABZ)’s Sharjah hub currently consists of almost 1,000 weekly flights to about 60 destinations. (ABZ) currently accounts for an overwhelming 83% of total capacity at Sharjah. In terms of seat capacity, (ABZ)’s Sharjah hub is about 4 times the size of Jazeera (JZI)'s Kuwait hub, and about double the size of flyNas (NAZ)’s hubs in Riyadh and Jeddah.
The Dubai hub of the Middle East’s other main (LCC), flyDubai (FDB), is about +50% larger than Air Arabia (ABZ)’s Sharjah hub. But a Cebu Pacific (CEB) - flyDubai relationship is unlikely, given (FDB)’s ties to Emirates (EAD), which competes against (CEB) in the Manila to Dubai market. (EAD) is also a large one-stop carrier in other Manila to Middle East markets (such as Kuwait and Saudi Arabia) that (CEB) is now preparing to enter.
Alex Reyes said (CEB) is now looking to add Sharjah on a permanent basis, to leverage the connection opportunities with Air Arabia (ABZ) as it was was pleasantly surprised by the transit traffic generated during its time in Sharjah. (ABZ) in particular, promoted connections to Manila from the Saudi Arabian cities of Dammam, Riyadh, Gassim, and Hail with one-way through fares starting at SAR1250/USD333, including checked bags and a meal.
(CEB) returned to Dubai International Airport in July 2014 after the recent completion of the runway renovation project. (CEB) is not considering moving its Dubai International flight to Sharjah (or Dubai World Central) and remains committed to Dubai, where its load factor has improved significantly after a dismal start. But it believes there is sufficient demand in the Philippines to (UAE) market to support separate services to both Dubai and Sharjah.
(CEB) originally was looking at supplementing Dubai with Abu Dhabi, but now sees more potential in Sharjah, partly because of the connection opportunities with Air Arabia (ABZ). There is also a sizeable Filipino community in Sharjah and in the part of Dubai that is close to Sharjah.
(CEB), however, 1st needs to secure additional (UAE) traffic rights, before a service to Sharjah can be added. (CEB) has long pushed Philippine authorities to adopt a policy of prohibiting Filipino carriers from loaning their traffic rights to (UAE) carriers. As part of code share deals, (PAL) over the years has been able to loan its traffic rights for the (UAE) to Emirates (EAD) and Etihad (EHD), which lacked the ability to expand, as they were fully utilising their own traffic rights.
(EHD) is no longer using (PAL) rights, but (EAD) is still using 7x-weekly traffic rights allocated to (PAL), to support 1 of its 3 daily flights to Manila. These rights are expected to be returned and could potentially be reused by (PAL) or partner (EHD) to expand in the Manila to Abu Dhabi market. If they are not reused by (PAL), the rights could be reallocated to (CEB).
The (UAE) also has been seeking an extended air services agreement with the Philippines. This could enable Emirates (EAD) to maintain 3 daily flights without having to use (PAL)’s rights for 1 of the flights, as well as potentially support a new service from (CEB) if it is unable to secure the Filipino carrier rights, now used by (EAD).
There are currently 28x-weekly flights allocated to both sides under the Philippines to (UAE) air services agreement. Of the 28x-weekly flights available to Filipino carriers in the (UAE) market, 26 are currently used, including 7n from (CEB) (to Dubai), 7 from (PAL) Express (PHP) (to Dubai), 5 from (PAL) (to Abu Dhabi) and 7 by (EAD) on behalf of (PAL) (to Dubai). Of the rights available to (UAE) carriers, 14 are currently used by (EHD) (from Abu Dhabi), and 14 by (EAD) (from Dubai).
There are currently no services from the Philippines to Sharjah or any other point in the (UAE). In the Philippines, all services to the (UAE) originate in Manila ((EAD) from October 2013 to April 2014) also operated one daily flight to Manila alternative Clark, which is an "open skies" airport. But demand from Clark is limited, and Emirates (EAD) is unlikely to return to Clark).
Operating 2 (likely daily) routes to the (UAE) seems rather ambitious, given the initial challenges (CEB) faced in the Manila to Dubai market. But (CEB) is confident it has overcome the initial setbacks and believes the Philippines to (UAE) market is growing rapidly and can support more (LCC) flights, particularly given the stimulation effect of low fares.
Alex Reyes says the total number of passengers traveling between Manila and Dubai has grown by +30% over the last year (includes passengers flying via other cities such as Hong Kong). Some of the growth was driven by stimulation, as lower fares in the market have enabled more frequent trips home for Filipinos, as well as visits from friends and family living in the Philippines.
The number of Filipinos working in Dubai and the (UAE) also has continued to grow more than anticipated. Dubai is now the largest outbound Filipino market, giving (CEB) confidence it can maintain a daily Dubai service, as well as add a 2nd destination in the (UAE).
Sharjah also offers connection opportunities, as (CEB) is keen to pursue an expanded and potentially more formal relationship with Air Arabia (ABZ). With Filipinos spread across the Middle East, using Sharjah and (ABZ) to serve the rest of the region is logical.
(CEB) has looked at other potential non-stop routes in the Middle East, including Bahrain, Oman, and Qatar. A more sensible approach would be to serve these and other smaller Filipino worker communities via Sharjah and not growing the Middle East network beyond 5 destinations (and 3 countries).
Cebu Pacific (CEB) is also confident recent improvement on its Manila to Dubai route, which Alex Reyes says is now “doing quite well,” shows more capacity to the (UAE) and Middle East can be supported. While (CEB) is keen to diversify its long-haul network with Australia and Hawaii, the Middle East remains the main focus of its long-haul strategy.
(CEB)’s average load factor on Manila to Dubai was a dismal 36% in the 1st month of operation, October 2013. But the load factor started improving in late November 2013, and after still struggling in (1Q) 2014, was >80% LF in April 2014, May 2014 and June 2014. (CEB) has not provided data on July, but it likely dipped due to low demand during Ramadan, despite a temporary reduction to 4x-weekly flights during the fasting month.
Alex Reyes is confident in the future success of the Dubai route as (CEB) has made adjustments in its sales and distribution approach, after learning about the nuances of the Philippines to Middle East market. While (CEB) was disappointed with the new initial performance, Alex Reyes points out new routes typically take a year to mature. For example, (CEB) had even lower initial load factors on some regional international routes launched in recent years (although obviously, the losses were significantly lower as they were shorter routes operated with narrow body airplanes).
(CEB)’s long-haul operation seems to have gotten over the hump, and is on the path to an improved performance. But it still faces huge challenges, and a relatively sceptical investment community.
(CEB)’s stock dropped by about -40% in the last 7 months of 2013 (the 1st 7 months of the A330 operation) as the new long-haul operation dented its profitability. The stock has recovered partially so far in 2014, but is still trading almost -30% below May 2013 levels.
Even with the Dubai route performance improving, (CEB) has not yet proven its version of the long-haul model can be successful. The adjustment to focus more on transit traffic, starting with the pursuit of North Asia connections on the Sydney to Manila route and to potentially be followed by a partnership with Air Arabia (ABZ) at Sharjah, should help. But (CEB) still has a long road ahead.
Australia will be particularly challenging as (CEB) faces stiff competition and potentially overcapacity, as (PAL) is increasing its Manila to Sydney service from 4x-weekly flights to daily in December 2014. Cebu Pacific (CEB) also plans to add a 5x-weekly frequency to Sydney from December2014, while Qantas (QAN) maintains its Manila service at 4x-weekly flights.
Honolulu will also be challenging from a competitive standpoint, as (PAL) is increasing Manila to Honolulu from 4x- to 7x-weekly flights ahead of (CEB)’s expected entry into the Hawaii market. (PAL)’s response thus far to (CEB)’s long-haul expansion has been extremely aggressive. (PAL) also launched Dubai and Abu Dhabi at about the same time as (CEB) entered Dubai, and also has launched Dammam and Riyadh, ahead of (CEB).
Virtually everywhere (CEB) has turned with its long-haul operation, (PAL) has fought back with new flights and requests for more traffic rights. But (CEB) is prepared to weather the storm. If anything, (PAL) is more likely to retreat, as questions again surface over (PAL)’s future ownership structure.
Already, the (PAL) Group has adjusted its Middle East expansion plan by deciding against taking another 5 A330-300s in single class configuration. Initially, 6 A330s from the group’s A330 order had been allocated to regional subsidiary (PAL) Express (PHP) for use on routes to the Middle East in 414Y-seat single class configuration. (PAL) Express (PHP) now operates only 1 A330-300, which it uses to compete against (CEB) on the Manila to Dubai route, but is no longer planning to expand this operation to other Middle Eastern markets.
(CEB)’s long-haul unit, clearly faces a critical juncture over the next 6 months as it launches 5 routes. How the 5 new markets perform and how well Dubai does in its 2nd year (as well as what happens with the (PAL) Group) will be key drivers in determining the pace of future (CEB) wide body expansion.
While the current business plan envisions only 8 A330s, a phase 2, featuring new generation wide bodies has always been a possibility (and a necessity if (CEB) is to keep up with Asia Pacific’s other rapidly growing long-haul (LCC)s).
Cebu Pacific (CEB) is now evaluating the A330neo, which AirAsia X (ASX) signed up for in July 2014 as the launch airline customer, with 50 commitments. (CEB) was already evaluating the A350, 787 and the 777X. The latter is still several years away, but would enable flights from Manila to the west coast of the USA, which have traditionally been (PAL)’s largest and most lucrative long-haul markets. (CEB) does not see the A350 or 787 as a possibility for California (as the variants that may have the range, are too small for (CEB)’s requirement) but could use either type or the A330neo to pursue growth to the Middle East and Australia and replace current generation A330-300s.
Cebu Pacific (CEB) certainly will have several options as it looks to grow its long-haul fleet and network. But 1st, it needs to get the basics right, and make sure it has the right long-haul, low-cost model for its market.
Adjustments will be necessary as the long-haul, low-cost sector is evolving rapidly, and the SE Asian market is extremely dynamic. (CEB) is now barely scratching the surface. (CEB) is still too new to the long-haul low-cost game, to determine if it will be a winner.
August 2014: A330-343E (1552, RP-C3345), ex-(F-WWKV), Intrepid Aviation Partners leased.
September 2014: Cebu Pacific Air (CEB) has been granted entitlements to operate 5 additional international routes by the country’s Civil Aeronautics Board (CAB). It has been designated as an official Philippine carrier to New Zealand, Myanmar, and Canada.
The new routes are for flights from Manila to Singapore, Myanmar, New Zealand, and Macau; and from Cebu to Hong Kong.
(CEB) has been granted 7x-weekly flights from Manila to New Zealand and 1,260 entitlements from Manila to Singapore, allowing (CEB) to upgrade its current daily Airbus A320 service to an A330.
The (CAB) also granted Cebu Pacific (CEB)’s opposition to extension of a code share agreement between Philippine Airlines (PAL) and Emirates (EAD) on the Manila to Dubai route, which is set to expire in October.
Cebu Pacific Air (CEB) has started a new long-haul service from Manila (MNL) to Kuwait City (KWI) on September 2nd and launches 4x-weekly, Manila to Sydney services on September 9. (CEB) began 3x-weekly (KWI) service on the 5,612 km route, using its A330-300s. No other carrier operates this route.
Cebu Pacific Air (CEB) will launch services from Manila to 2 destinations in Saudi Arabia in October. (CEB) will operate 3x-weekly between Manila and the Saudi capital Riyadh from October 1 using its new Airbus A330-300 airplanes with an all (Y)-economy configuration (436Y seats).
Then on October 4, (CEB) will begin 3x-weekly service between Manila and Dammam on Saudi Arabia’s east coast, also using the all-economy Airbus A330-300 fleet.
Both services offer the only nonstop flights between Manila and the Saudi destinations. (CEB) also operates a daily nonstop service between Manila and Dubai, and 3x-weekly nonstop service between Manila and Kuwait.
(CEB) General Manager Long-haul division, Alex Reyes said: “We have long wanted to serve the substantial population of Global Filipinos in the Kingdom of Saudi Arabia. With Dammam, Kuwait, Dubai and now Riyadh, (CEB)’s network in the Middle East is made wider. We offer the most number of seats on this direct route, so there are more affordable and faster flights home for the Global Filipinos working and living there.”
The Philippine Overseas Employment Administration estimates that more than >1 million Filipinos are based in Saudi Arabia,
SEE ATTACHED: "CEB-2014-08 - FILIPINO WORLD POPULATIONS" WHICH SHOWS 3.5 MILLION IN THE MIDDLE EAST.
(CEB) became the latest airline to enter the Australian air travel market with the introduction on September 9th of 4x-weekly flights on the 6,243 km route from Manila (MNL) to Sydney (SYD). Frequency will increase to 5x-weekly from December 10th using (CEB)’s high density 436-seat A330-300s. Competition comes from Philippine Airlines (PAL) and Qantas (QAN), who both already serve the route with 4x-weekly.
Cebu Pacific Air (CEB) may expand its network from its 2ndary hub in Cebu as a result of the airport’s growth plans. (CEB) said it supports the expansion of Mactan Cebu International Airport, and is “reviewing our network plans” with the aim of increasing passengers using the hub. Earlier in September, the airport authority announced it is raising passenger fees to support development.
The airport awarded a contract to Megawide Construction Corporation and India’s (GMR) Infrastructure in April, which will allow the partners to operate the terminal. Cebu Pacific (CEB) said the terminal can currently handle 4.5 million passengers a year, and expansion plans will boost capacity to eight million passengers a year.
Mactan-Cebu is an important part of the Cebu Pacific network. (CEB) has 27 routes from the airport covering 4 international destinations (Seoul, Pusan, Singapore, and Hong Kong) and also several domestic cities. This makes it (CEB)’s 2nd-largest hub, well behind Manila, but ahead of Clark Field, Kalibo, and Iloilo.
One new route from Mactan-Cebu that is likely to see additional capacity is the Hong Kong service, as the Philippines’ Civil Aeronautics Board recently granted Cebu Pacific (CEB) additional frequencies for this city pair.
(CEB) said it flew 3.3 million passengers from Cebu last year. In the second quarter, it reported a +14.75% year-on-year growth in passenger numbers from this airport. (CEB) operates a fleet of about 40 Airbus narrow bodies and 5 A330s.
Separately, (CEB) has started a trial of a wireless in-flight entertainment system marketed by Germany’s (KID)-Systeme GmbH. The company said (CEB) already offers wireless Internet connectivity on its airplanes, but the new system will allow entertainment content to be streamed to personal viewing devices. The trial will include 5 airplanes, presumably Cebu’s A330s, which are used on long-haul services.
Intrepid Aviation (INL) and (KfW IPEX)-Bank have closed a commercial financing transaction for 1 A330-300. The airplane was delivered August 30 and will be on an operating lease to Cebu Pacific (CEB).
October 2014: News Item A-1: Cebu Pacific Air (CEB) has added Saudi Arabia to its growing long-haul network. On October 1st (CEB) began 3x-weekly flights on the 7,789 km route from Manila (MNL) to Riyadh (RUH), competing with Saudia (SVA) (daily flights) and Philippine Airlines (PAL) (4x-weekly). This now becomes (CEB)’s new longest sector, surpassing the recently launched service to Kuwait, which clocks in at 7,612 kms. On October 4th, 3x-weekly flights on the 7,463 km route from Manila (MNL) to Dammam (DMM) were added. These again compete with (PAL) and Saudia (SVA), who both operate 3x-weekly flights as well. Both of these new routes will be flown by (CEB)’s A330-300s. Alex Reyes, General Manager Long-Haul, (CEB), said: “Cebu Pacific (CEB) will keep flying to where the Filipinos are. As we expand our operations in the Middle East, we are proud to offer even more Filipinos in the Kingdom of Saudi Arabia, the fastest, most affordable way to come home.”
News Item A-2: Tigerair Philippines (SRQ), which is now a fully owned subsidiary of Cebu Pacific Air (CEB), has launched 3 new routes from Manila (MNL). All of the routes will be served daily by (SRQ)’s A320s and include a service to Clark (CRK), a sector length of just 90 km. No other carrier serves this route, but the other new routes to Roxas (RXS) and Tagbilaran (TAG) are already served with 3x- and 8x-daily flights, respectively.
November 2014: While there has been a lot of attention on Cebu Pacific (CEB)’s recent long-haul expansion, (CEB) is also boosting its fleet of Airbus A320s to improve its short-haul network.
December 2014: News Item A-1: Emirates (EAD) says its third daily, Manila, Philippines flight is justified. (EAD) is hitting back at claims by Philippine carriers, that it is being allowed to operate too many flights in the important Philippines - Middle East market.
The United Arab Emirates (UAE) is seeking to hold a new round of bilateral air service agreement (ASA) talks with the Philippine Civil Aeronautics Board (PCAB) early next year.
The move follows the recent successful joint protest against United Arab Emirates (UAE) flag carrier, Emirates Airline (EAD) by Cebu Pacific Air (CEB) and Philippine Airlines (PAL), which resulted in the (PCAB) blocking (EAD) from selling unsanctioned Manila to- Dubai tickets after December 26.
The new talks, which would likely update and expand the last (ASA) made between the 2 countries in 2012, could be held as early as January 2015. It could seek to reinstate (EAD)’s blocked schedule, or maybe increase overall flight numbers on the highly trafficked migrant worker route.
However, (PAL) and (CEB) have both spoken out against any new (ASA) talks between the 2 countries, stating that they “reiterate our appeal against holding a new round of bilateral air negotiations with the (UAE) in the near future.”
The (PCAB) decision to block (EAD)’s 3rd daily flight, which was backed with a PHP 1.8 million/$40,000 fine on (EAD), which forced Emirates (EAD) to offer refunds or ticket transfers to passengers who had already booked flights after December 26, using “illegally sold tickets,” (CAB) Executive Director Carmelo Arcilla said.
February 2015: News Item A-1: Despite being sanctioned by the authorities for flight delays over the Christmas period, Filipino low cost carrier (LCC) Cebu Pacific Airways (Cebu) is planning to extend its flight schedules, primarily on international routes.
(CEB) is to start flights from its secondary hub at Mactan International Airport on Cebu to Tokyo Narita, and from Kalibo International Airport to Hong Kong.
The Kalibo - Hong Kong route will see 3x-weekly flights from March 2, and the Mactan - Narita route will fly 4x-weekly from March 26. Both schedules will use Airbus A320 airplanes.
The move to regional hubs away from the chronically congested Ninoy Aquino International Airport in Manila is part of (CEB)'s push to minimize delays at the country’s capital airport.
Over the peak Christmas period, (CEB) saw over >70% of its scheduled flights either delayed or cancelled, a situation the Department of Transportation & Communications spokesperson Jun Abaya described as “an appalling number.”
The Philippine Civil Aeronautics Board (CAB) consequently fined (CEB) PHP52.2 million/$1.2 million for the flight schedule interruptions, although (CEB) partly blamed external factors.
Nonetheless, (CEB) has applied to the Philippine Civil Aeronautics Board (CAB) for extra flight schedules to Italian airports, primarily at Milan and Rome, which had been allocated to national carrier Philippine Airlines (PAL), but which are currently unused. (CEB) is requesting seven slots be re-allocated to its airplane for the route.
If the (CAB) agrees with (CEB)’s request, this would give (CEB) its first European route, although it has strong existing network links to Asia and the Middle East.
News Item A-2: Cebu Pacific Air (CEB) says it has signed a forward sale agreement with USA budget carrier, Allegiant Air (WJE), Las Vegas McCarran) involving six A319-100s. Delivery of the airplanes to Allegiant (WJE) is scheduled to run from later this year through 2016.
"This agreement is in line with (CEB)'s efforts to continuously improve operational efficiency by replacing and upgrading our fleet with the larger, more fuel efficient, and longer range A321neo airplanes," Lance Gokongwei, (CEB) President & (CEO), said.
(CEB), which operates ten A319s on domestic as well as regional routes, has thirty A321neos on order from Airbus Industrie (EDS) with options for ten more.
For its part, (WJE) operates seven A319s with thirteen additional jets, formerly with easyJet (EZY), set to be acquired in due course.
News Item A-3: Cebu Pacific Air (CEB) currently operates 54 airplanes, to 18 countries, 62 destinations, 94 routes and 338 daily flights.
March 2015: News Item A-1: "Cebu Pacific Air (CEB) Completes A330 Long Haul Fleet" by (ATW) Adrian Schofield, March 10, 2015.
Philippine low-cost carrier (LCC) Cebu Pacific Air (CEB) is taking delivery of its 6th Airbus (EDS) A330-300 this week, completing current orders for the wide body aircraft type used to expand its long-haul network.
(CEB)’s last A330 is expected to arrive in Manila on March 11, on lease from Intrepid Aviation (INL). (CEB) had five A330s by the end of 2014, after receiving three airplanes last year. All of (CEB)’s A330s are leased.
Last year’s A330 deliveries allowed (CEB) to add flights to four destinations beyond Asia during a four-week span through early October. (CEB) primarily uses A330s on long-haul routes from Manila to Dubai, Sydney, Kuwait, and Riyadh. They are also deployed on selected flights to Singapore.
Not all of the long-haul routes that were added have been successful, however. (CEB) is suspending service to the Saudi Arabian city of Dammam, effective March 30, just under six months after launching the flight. Load factors on this route were poor, so (CEB) will redeploy A330 capacity to other routes where demand is stronger, Long-Haul General Manager & VP Commercial Planning, Alex Reyes said.
(CEB) intends to grow other long-haul markets, and is considering adding Australian destinations and frequencies. (CEB) has applied for more capacity rights for Australian service, and is also pressing the Philippine government to negotiate a new bilateral aviation agreement between the two countries.
News Item A-2: Several Asian low-cost carriers (LCCs) (including Cebu Pacific (CEB), Tigerair Taiwan (TTW) and Vietjet Air (VJE)) are pulling back from the region’s previous network expansion, concentrating instead on maximizing traffic on existing profitable routes.
Cebu Pacific (CEB) will introduce its fourth route to the Arab states with a 2x-weekly flight from Manila to Doha, Qatar. The 436Y all-economy Airbus A330-300 flights will start from June 4, and add to (CEB)’s existing Gulf States coverage to Dubai (UAE), Riyadh (Saudi Arabia), and Kuwait International. “It is [our] priority to maintain a strong presence in [established] regions, where we are able to reach a large population of Filipino communities,” (CEB), VP Commercial Planning & General Manager Long-Haul, Alex Reyes said.
Meanwhile, Tigerair Taiwan (TTW) plans to extend its existing north Asia coverage (which currently includes Macau and Kaohsiung) with a new route to Tokyo Narita. The service, which will use Airbus A320 airplanes, is set to launch in April. (TTW) has promised “definitely below market average” prices in a bid to boost load factors on the route.
Vietjet Air (VJE) is also reinforcing its current network with increased frequency on its services to Singapore. Beginning May 30, (VJE) will launch a second Ho Chi Minh City to its Singapore schedule. This will give (VJE) two return flights a day between the two cities, using Airbus A320s, and boost (VJE)’s route capacity to more than >5,000 seats a week.
April 2015: Cebu Pacific Air (CEB) will open a new Middle East route from Manila to Doha, Qatar from early June. The new, 2x-weekly 426-seat Airbus A330-300 service will take more than >9 hours from Cebu’s Manila hub at Ninoy Aquino International.
(CEB) said it wants to tap into the lucrative overseas Filipino workers (OFW) market, but will offer fares up to -50% lower than competitors, including Qatar Airways (QTA).
(CEB)’s VP Commercial Planning & Long-haul Operations General Manager, Alex Reyes noted that around 200,000 overseas Filipino workers currently live in Qatar. “Filipino expats can [now] fly home more often or their families can visit them in Qatar,” he said.
The new route will replace the recently axed Manila to Dammam, Saudi Arabia, service, launched in October last year. Reyes said poor load factor was the reason Cebu had canceled the route. “We decided to suspend services for now, as loads on the Dammam - Manila sector [were] poor,” he said.
Nonetheless, Cebu’s move into offering a standard low cost carrier (LCC) package on longer-haul routes using fuel-efficient wide body airplanes seems to be paying off on other routes.
Despite (CEB)’s seven-month-old Manila - Sydney service being around 12 hours in duration, with hot meals, baggage, wireless Internet, and exit-row seats all costing extra, (CEB) said it has taken around one-third of the route’s capacity in just seven months. “We have already managed to capture 30% of the market on the Manila to Sydney route, and look to further growth on [Middle East] routes too,” (CEB) Chief Executive Advisor, Gary Kingshott said.
May 2015: News Item A-1: Cebu Pacific Air (CEB) reported first-quarter net income of +PHP2.2 billion/+$50 million), up significantly from a +PHP164.2 million profit in the year-ago period. (CEB) said the results were due to “bullish income and passenger growth in key markets, lowest possible fares and network expansion.”
Revenue rose +20.7% to PHP14.2 billion, while expenses increased +1% to PHP11.4 billion.
Passenger revenues grew +22.2% to PHP10.8 billion and cargo revenues rose +13.6% to PHP772.5 million, compared to the same period in 2014. Ancillary revenues rose +17% to PHP2.6 billion.
First-quarter traffic rose +13% to 4.3 million passengers carried year-over-year, largely due to increased traffic on long-haul destinations such as to Dubai, Riyadh, Kuwait, and Sydney.
Fuel expenses fell -22% to PHP4.33 billion from PHP5.5 billion in the same period in 2014. “Our latest operating statistics affirm our objective to further grow inbound tourism by expanding our services to new destinations,” Cebu spokesperson, JR Mantaring said.
In the first quarter, (CEB) launched Kalibo - Hong Kong and Cebu - Tokyo international services, and its re-branded Cebgo (SRQ) subsidiary (previously Tigerair) launched Manila - Legazpi and Cebu - Puerto Princesa flights. The carrier will launch twice-weekly Manila - Doha and Manila - Qatar flights from June 4.
News Item A-2: Tigerair Philippines (SRQ), which was acquired by Philippine low-cost carrier (LCC) Cebu Pacific Air (CEB) in March last year, has been rebranded as "Cebgo."
(SRQ)’s new logo incorporates the Cebu Pacific (CEB) colors, to reflect (SRQ)’s relationship with its parent company.
Cebgo (SRQ) President & (CEO), Michael Ivan Shau said: “The new Cebgo brand clearly identifies us as part of the Cebu Pacific Air (CEB) group, and streamlines our operations further. Cebgo (SRQ) will continue to leverage (CEB)’s distribution channels and network, and work together to serve more guests,” he said.
Cebgo (SRQ) operates flights from Manila’s Ninoy Aquino International Airport Terminal 4 and Clark International Airport, flying to 16 domestic and regional destinations. Since its acquisition by Cebu Pacific (CEB) last March, the wholly owned subsidiary has made a rapid turnaround, narrowing its financial losses. In 2014, Cebgo (SRQ) carried 1.3 million domestic passengers, compared to 970,000 in 2013.
August 2015: News Item A-1: The Cebu Pacific Air (CEB) Group (made up of low cost carrier (LCC) Cebu Pacific (CEB) and its wholly owned subsidiary, Cebgo (SRQ)) posted a first-half net income of +PHP5.2 billion/+$112 million. This was an increase of +64% over the PHP3.178 billion earned in the year-ago period. Cebgo (SRQ) is formerly Tigerair Philippines.
The first half also saw the (CEB) Group revenues increase +10.4% year-on-year to PHP29.506 billion.
The two Philippine-based airlines carried more than >9.2 million passengers, with passenger revenues up +9.4% to PHP22.813 billion, and passenger numbers up +8.2% year-over-year. Seat load factor for the half-year was down -3.9 points to 81.8% LF.
Ancillary revenues increased +15% to PHP5.092 billion and cargo revenues grew +11.4% to PHP1.601 billion.
Operating expenses at PHP23.469 billion were -1.2% lower in (1H) 2015 than during the same period last year, largely due to lower fuel costs. However, the drop in fuel costs offset the costs associated with expanded long-haul operations, capacity increases in the form of new aircraft, and the weakening of the Philippine peso against the USA dollar.
Cebu Pacific (CEB) spokesperson, JR Mantaring said: The (CEB) Group’s notable (1H) 2015 passenger growth was driven by the launch of (CEB)’s operations in Narita, and new long-haul routes, including Riyadh, Sydney, and Kuwait; and the launch of additional domestic routes.”
The (CEB) fleet includes 10 Airbus A319s, 31 A320s, six A330s and eight ATR 72-500 aircraft. Between 2015 and 2021, the group will take delivery of seven more new Airbus A320s, 30 A321neos, and 16 ATR 72-600 aircraft.
News Item A-2: Cebu Pacific Air ((IATA) Code: 5J, based at Manila) (CEB) will begin transferring some of its domestic network to its Cebgo ((IATA) Code: DG, based at Manila) (SRQ) subsidiary, with effect from September of this year. According to "AirlineRoute," flights from Manila to Busuanga, Caticlan, and Naga will begin from September 25 onwards, while Laoag will switch from October 1.
Thereafter, effective October 1 through to October 26, Cebgo (SRQ) will begin operating the following flights out of Cebu: Caticlan, Dipolog, Siargao, Tacloban, Camiguin, Tandag, Butuan, Dumaguete, Iloilo, Legaspi, Ozamis, Pagadian, Surigao, Cagayan de Oro Laguindingan, and Bacolod.
Flights from Davao to Cagayan will also switch from early October onwards.
Formerly Tigerair Philippines ((IATA) Code: DG, based at Clark), Cebgo (SRQ) will be transformed into an all-turboprop operation following an order for sixteen ATR72-600s (with options for an additional ten) placed with Avions de Transport Régional (ATR) (Toulouse Blagnac) earlier this year.
September 2015: Philippines low-cost carrier (LCC) Cebu Pacific (CEB) will introduce three new international schedules to its Asian network in December 2015, flying to Japan, Singapore, and Taiwan.
(CEB) will introduce 3x-weekly Airbus A320 service from Ninoy Aquino International, Manila to Fukuoka on the Japanese route, currently only served by Philippine Airlines (PAL). The Cebu - Mactan International - Taoyuan (Taipei) service will also use the A320 on a 3X-weekly service, and will be the first regularly scheduled service between the two cities.
The new 2x-weekly, Singapore Changi - Francisco Bangoy International (Davao) route will compete with the only other service on the route operated by Singapore Airlines (SIA) regional full-service carrier SilkAir (SLK).
The new schedules underline Cebu (CEB)’s strategy of moving deeper into international markets in the north Asia market from regional Filipino hubs. It comes on the back of an increased number of Chinese passengers opting for (LCC) regional travel, buoyed by increased services from (LCC)s such as Scoot (SCT) and AirAsia (ASW).
Cebu Pacific (CEP) VP Marketing & Distribution, Candice Iyog said the new schedules will tap into the growth of inbound tourism in the Philippines. “We will continue to develop our Philippine hubs to offer fast, affordable flights to more travelers across our network,” she said.
Cebu Pacific (CEB), which saw a +64% surge in 2015 first-half profits, flies to 63 cities both regionally and internationally, and recently introduced services to Doha, Qatar.
November 2015: Cebu Pacific Air (CEB) has announced Guam International as its first destination in the USA with a 4x weekly service from Manila set to commence on March 15, 2016. Operations are on-board an A320-200. “Having Guam in our network sets us off on another expansion path across the Pacific. With the launch of Guam, we offer fares that are up to -83% lower than other airlines. Fares this low can only mean more tourists to both countries, more Filipinos visiting home, and more opportunities for everyone,” said (CEB) President & (CEO), Lance Gokongwei.
The Filipino low-cost carrier (LCC) was granted Extended-range Twin-engine Operational Performance Standards (ETOPS) clearance by the (FAA) in April, and said at the time it would be starting flights to Guam and Honolulu, Hawaii before year-end. The (ETOPS) certification has been complemented by the Civil Aviation Authority of the Philippines (CAAP) Extended Diversion Time Operations (ETDO) approval, which will allow Cebu to comply with long-haul operations out of the Philippines.
(CEB) said its entry into the under served, Manila – Guam market will add +1,440 weekly seats, thereby boosting connectivity between the two countries. (CEB) said it will add a +25% capacity boost to Manila - Guam with the new service, currently served by Philippine Airlines (PAL) and United Airlines (UAL). (CEB) has said it would also like to start flights to the USA mainland in the coming months to take advantage of the large Filipino population there.
With the announcement, (CEB)’s network will grow to 56 destinations, including cities across the Philippines, south-east Asia, China, Australia, and the Middle East.
(CEB) currently flies to, Bali, Dubai, Doha, Beijing, Sydney and Tokyo as well as 58 regional destinations with a fleet of 55 aircraft, including Airbus A320s, A330s, and ATR 72-500s to 19 countries, to 55 destinations, on 83 routes, and 305 daily flights.
December 2015: News Item A-1: Manila’s Clark International Airport is targeting a maximum passenger capacity of 16 million passengers a year by 2022, up from 4 million currently.
Construction work on Phase 1 of the PHP15 billion/$318 million project will start in 2016, according to Clark International Airport Corporation (CEO) Emigdio Tanjuatco III.
He said the new terminal would be “a welcome development for the whole Clark community as well as for the entire country.” It comes on the heels of complaints from carriers such as United Airlines (UAL) over repeated diversions and delays at Manila's Ninoy Aquino International Airport (NAIA).
Initial work, which is due for completion in 2017, will add facilities that will handle up to +3 million extra passengers annually, Tanjuatco said.
The airport said Phase 2 of the project will expand capacity to an additional 5 million passengers a year.
This is the 2nd development of the former US Air Force airbase, situated some 40 miles from central Manila. An $8.6 million upgrade of existing facilities was brought online in May, boosting current capacity to 4 million from 2.5 million passengers a year.
“We see Clark International Airport as a premier gateway," said Filipino Transportation Secretary, Joseph Emilio Abaya, adding the expansion of Clark is “part of the government’s development plans for the entire economic zone and region.”
News Item A-2: "Cebu Pacific set to Expand into Russia, Taiwan & (UAE) by Jeremy Torr, December 22, 2015.
The Philippines Civil Aeronautics Board (CAB) has granted Filipino low-cost carrier (LCC) Cebu Pacific Air (CEB) new schedule allocations to the United Arab Emirates (UAE), Taiwan, and Russia. The (LCC), which is looking to further expand its international network, said it will now be able to launch +7 more weekly flights from Manila’s Ninoy Aquino International Airport to any destination in the (UAE), in addition to its existing quota of daily flights between Manila and Dubai.
Cebu was also granted an expansion of its permits for Taiwan operations (currently limited to Taipei) with flights to Kaohshiung, plus new departure airports of Caticlan, Clark, Davao, Puerto Princesa, and Tagbilaran, in addition to its base at Cebu.
The (CAB) also approved 3x-weekly services to Russia’s Moscow and Vladivostok, following an upgraded air services agreement between Russia and the Philippines in August 2015.
Cebu spokesperson JR Mantaring indicated the new allocations would be taken up in the near future, noting the (CAB) had granted the new route permits to carriers (such as Cebu) that he said were “willing and able to utilize and operate flights.”
News Item A-3: Cebu Pacific Air (CEB) has introduced 3 new international routes from 3 different airports in the Philippines all on the same day, December 17. All 3 routes will be served with between 2 and 3 weekly frequencies and will be operated by (CEB)’s A320 fleet. 2 of the 3 routes are already served by other carriers, but the 1,666 km link between Cebu (CEB) and Taipei Taoyuan (TPE) is not operated by any other airline.
Routes as follows:
Cebu (CEB) to Taipei (TPE) A320 3x-weekly;
Davao (DVO) to Singapore (SIN) 2x-, vs SilkAir (SLK) 4x-;
Manila (MNL) to Fukuoka (FUK) 3x-, vs Philippine Airlines (PAL) 7x-.
News Item A-4: Cebu (CEB) (CEO), Lance Gokongwei recently announced (CEB)’s 1st flights to the USA with a Manila - Guam service, which will launch in March next year. He said the service would be the 1st step on “an expansion path across the Pacific.”
February 2016: The government of the Philippines has ratified the Association of Southeast Asian Nations (ASEAN) "Open Sky" Policy paving the way for the launch of unlimited flights between member states' capitals by designated carriers.
The "Open Skies" policy, also known as the (ASEAN) Single Aviation Market (ASEAN-SAM), aims to increase regional and domestic connectivity, integrate production networks and enhance regional trade by allowing airlines from all 10 (ASEAN) member states to fly freely throughout the region via the liberalization of air services under a single, unified air transport market.
Although "Open Skies" will open up capital cities to regional carriers, there will be a cap on the number of slots allocated airlines. In addition, there are restrictions for certain host countries which do not exist in other international open sky agreements. The allocation of Seventh freedom rights however, has yet to be tackled.
While the policy came into effect on January 1, 2015, only the Philippines and Indonesia had held out on its full implementation. Previously the Philippines had opened up all cities except Manila to fellow regional carriers on the grounds that the capital's airport was not capable of handling a surge in demand. For its part Indonesia has only opened Jakarta Soekarno-Hatta up to the confines of the agreement but has kept the rest of the country off limits.
March 2016: "More (LCC)s Expand to Philippine-Asia Pacific Region"
by (ATW) Jeremy Torr, March 15, 2016.
As low-cost carrier (LCC) (CEB) launches its 1st service to a USA territory, Japan-based (LCC) Vanilla Air (VNL) said it also intends to expand across the Pacific region. In addition, Philippine Airlines (PAL) has also announced a new Saipan - Manila service.
All the carriers are increasing services on the strength of expanding tourism numbers across the Pacific region, and the attraction of a low-key entry to USA jurisdiction through Guam and Saipan.
Guam tourism spokesperson Nathan Denight said the new (CEB) Airbus A320-based service offers a “new opportunity to further connect our island and serve as the gateway to Micronesia and other regions of the world.”
Describing its new Manila - Guam route as “another expansion path across the Pacific,” (CEB) confirmed it is committed to expanding operations across the region.
Concurrently, Philippine Airlines (PAL) (CEO), Jaime Bautista announced a new Saipan - Manila schedule to start from June 2016. The service will offer a 2x-weekly service using A320-200 aircraft (again a 1st to the Pacific USA territory for the airline, since it attempted a short-lived service to the island in 1990).
Also eyeing the Pacific market, Japan-based (LCC) Vanilla Air (VNL) plans to expand to destinations including Guam, Saipan and Cebu from its home base at Tokyo Narita. These will add to its current lineup of local destinations using “beyond rights,” by offering a one- or two-stop schedule via Southeast Asian countries. These could potentially include Singapore, Thailand, and Vietnam, from (4Q) 2016, if permissions are granted.
April 2016: News Item A-1: Cebu Pacific Air (CEB) reported a +PHP4.4 billion/+$93.6 million net profit in 2015, a fivefold increase over a +PHP85.3 million net profit in 2014.
An airline spokesperson, J R Mantaring said (CEB) had seen a significant growth in passenger numbers as part of the Philippines’ “dynamic market, growing exponentially in the last two decades,” along with overall expansion boosted by support from “airline regulators and stakeholders.”
Total group revenue rose +8.7% year-over-year (YOY) to PHP56.5 billion, helped in part by (CEB)’s improved presence in emerging markets and a “conservative” fleet expansion plan, that included the acquisition of five new Airbus A320 and A330 aircraft.
Operating profit more than doubled (YOY) to +PHP9.7 billion compared to +PHP4.2 billion in 2014, partly helped by a drop in flying operating costs by -20% (YOY) to PHP21 billion, with a significant portion of that due to lower fuel costs. However, (CEB) recorded a -PHP2.93 billion hedging loss due to the decline in dollar fuel prices. Overall group expenses were down -2.2% (YOY) to PHP46.8 billion and (CEB) saw a (YOY) increase in ancillary revenues of 19.6% to PHP10.4 billion.
During the (FY) 2015 period, (CEB) carried 18.4 million passengers, an increase of +8.9% from the 16.9 million passengers flown in 2014. However, load factor slipped -1% to an average of 83% LF, but this was offset by a significant drop of -19% in (CASK) to PHP1.88, and saw passenger revenue of PHP42.7 billion, an increase of +6.2% (YOY).
Bucking recent regional trends, (CEB)’s cargo revenues also rose by +10% (YOY) to PHP3.5 billion.
(CEB) flies to >60 cities across Asia, the Middle East, and Australia using a 55-strong fleet of Airbus A330, A320 and ATR 72 aircraft.
News Item A-2: >80 flights were canceled and at least 14,000 passengers stranded at Ninoy Aquino International Airport (NAIA) following a major power outage April 2 - 3.
The 5-hour power outage mainly affected the airport’s domestic Terminal 3. However, full operation of the terminal and all its support functions was not completed until around noon on April 3.
Low-cost carrier (LCC) Cebu Pacific (CEB) said that it had canceled at least 80 flights. Several other major carriers (including PAL Express, Tigerair Philippines, (ANA), Cathay Pacific (CAT), Delta Air Lines (DAL), (KLM), and Emirates Airline (EAD) all use Terminal 3.
An (NAIA) spokesperson said on local radio that at least 31 flights were delayed and 66 had been canceled due to the outage, but management authority Manila International Airport Authority (MIAA) has not given a full list of disrupted flights.
(MIAA) said the initial outage was caused by a problem at local substation belonging to local power authority, Meralco, and that it was working on measures to insulate its operational side from external factors such as the substation trip.
“Measures are now being worked out to make sure that a power outage does not occur again in the future,” it said.
News Item A-3: Recaro announced Cebu Pacific Air (CEB) as the 1st airline in the Asia-Pacific region to order the SL3510 seat model from Recaro Aircraft Seating for its 30 new Airbus A321neo aircraft.
May 2016: Allegiant Air (WJE) has agreed to purchase 4 additional Airbus A319s from Philippines-based low-cost carrier (LCC) Cebu Pacific Air (CEB). The aircraft are scheduled for delivery in 2017 and 2018.
(WJE) previously agreed to purchase 6 A319s from Cebu Pacific (CEB). (WJE) has taken delivery of 3 of those aircraft, with the remaining deliveries scheduled to occur later this year.
By the end of 2016, (WJE)’s in-service Airbus fleet will number 33, comprising 16 A320s and 17 A319s. (WJE) said it anticipates adding further aircraft commitments, as opportunities for new transactions arise. At the end of this year, (WJE) will have a total of 85 aircraft in revenue service.
“By the end of 2016, Allegiant (WJE) will be a majority Airbus (EDS) carrier, as measured by available seat miles,” Allegiant Travel Company (COO) Jude Bricker said. “This agreement to purchase additional aircraft from (CEB) is an important step in our long-term transition to a single fleet type.”
(WJE) said the younger A320 family aircraft will help to increase operational efficiency in the coming years and open up new growth opportunities by making longer routes and off-peak flying profitable.
June 2016: "Value Alliance: the Hubs, Focus Airports and Routes Where Alliance Members Might Gain Synergies", by (CAPA), June 20,2016.
Since the Value Alliance was announced in May 2016 as the 2nd low cost carrier (LCC) alliance, there has been industry interest about how and where the alliance can deliver synergies. The 9 initial members of the Value Alliance include (CEB), Cebgo (SRQ), Jeju Air (JJA), Nok Air (NKA), NokScoot (NSC), Scoot (SCT), Tigerair Singapore (TGR), Tigerair Australia (TAU) and Vanilla Air (VNL).
Tokyo Narita is the alliance hub with more service from Value members (five) than any other. But Asia's most popular airports for Value members are not where the alliance has a local member: Taipei and Hong Kong.
In terms of frequency, Manila and Bangkok Don Mueang have the most Value flights, reflecting their local membership there. The local Value member based at an airport typically dominates the hub, accounting for >90% of Value flights. That creates a strong feed network for other members but also (potentially) competition that may be too strong. Members overlap on only 6 routes so far and their combined frequency gives them a scale advantage against non-Value (LCC)s. Although it is premature to evaluate the effectiveness of the alliance (new members will join and existing members will grow) this analysis looks at where there are network opportunities for cooperation.
* Airports most frequented by Value Alliance are not member hubs.
There are services from 3 or more members of the Value Alliance at 15 airports in Asia. This includes Tigerair (TGR) and Scoot (SCT), which have the same ownership, but excludes Cebu (CEB) and Cebgo (SRQ), since (CEB) owns (SRQ). (TGR) and (SCT) are expected to merge, with only 1 brand surviving.
5 airports have services from 4 or more alliance members. The 2 most popular airports (Taipei Taoyuan (6) and Hong Kong (5)) are not local hubs for the Value Alliance. Three airports have services from 4 Value members: Hanoi, Osaka Kansai, and Tokyo Narita. Only Tokyo Narita is a Value hub (served by Vanilla Air (VNL)), although Osaka Kansai is a growing focal point for (VNL) and in time, will likely become a hub.
Taipei is home to 2 (LCC)s – Tigerair Taiwan (TTW) and V Air (VAX) (but neither is a member of Value (or of U-FLY)). Tigerair Taiwan (TTW) is 10% owned by the Tigerair Holdings but is not a member, and is expected to be wholly under control of the China Airlines (BEJ) Group, once the expected Tigerair (TGR)/Scoot (SCT) merger occurs. V Air (VAX) is owned by TransAsia (FSH) and has no partnership affiliations. TransAsia (FSH), a full service regional airline, is not a member of a global alliance.
It is not without coincidence that the most commonly served airports are in NE Asia. Taipei and Hong Kong are accessible from both SE Asia and northern NE Asia with narrow body aircraft, making the 2 airports accessible for all members. Only Jin Air (JIN) (not an alliance member) is a NE Asian wide body (LCC) operator, so NE Asia’s (LCC)s are restricted from flying deep into SE Asia.
In contrast, SE Asia has 3 wide body (LCC) operators that are belong to an alliance: Scoot (SCT), NokScoot (NSC) and Cebu (CEB). Cebu (CEB) can access NE Asia with narrow body aircraft, although it sometimes uses wide body aircraft on trunk/congested routes. There are services from 3 Value members at 10 airports, and all but 3 are Value member hubs.
* Measured by frequency, most services are at Value alliance member hubs.
This analysis next looks at the largest airports in the Value Alliance based on weekly frequencies. This analysis comprises the 21 largest airports (the 20th and 21st largest have the same number of frequencies). The 6 largest airports are all member hubs.
The 4 largest (Manila, Bangkok (DMK), Singapore, and Cebu) are significantly larger than the rest. Of the 10 largest airports based on member frequency, only 2 (Hong Kong and Taipei Taoyuan) are not member hubs.
* Largest Value Alliance airports are dominated by their members.
13 of the region's largest airports have >7 daily flights from alliance members. Each is dominated by its local alliance member. At the 2 largest (Manila and Bangkok (DMK)) the local alliance hub member operates 98% and 94% of all flights by the alliance. In other words, of all Value flights at Manila, Cebu (CEB) operates 98% at Manila, while NokScoot (NSC) and Nok (NKA) operate 94% of all Value flights at Bangkok (DMK).
A Value Alliance Member typically accounts for >90% of alliance flights at its home. 4 airports are around the 80% mark, while there is no Value Alliance member operating flights at Bangkok (BKK) (they instead operate out of Bangkok (DMK)).
* Value Alliance members overlap on 6 routes.
There is a possibility that the Value Alliance could help (LCC)s gain scale on routes, especially where due to infrastructure constraints ( slots, air traffic, bilaterals) organic growth may not be an option.
In the week commencing June 12, 2016 the Value Alliance members overlap on only 6 routes. This excludes overlap only between Scoot (SCT)/Tigerair (TGR) (owned by the same company and expected to be merged) and Cebu (CEB)/Cebgo (SRQ) (Cebu (CEB) owns Cebgo (SRQ)). (CEB) has the most overlap (4 routes) followed by Jeju (JJA) (3), Tigerair (TGR) and Scoot (SCT) (2) and then Vanilla Air (VNL) (1).
No route has >2 operators. The frequency split varies between relatively even and lopsided. As this analysis is focused on the opportunity to offer more flights, frequency (not seats) is considered. The use of wide bodies at Scoot (SCT), and sometimes Cebu (CEB), would alter a capacity share analysis.
* Value Alliance opportunity to link NE Asia with SE Asia.
The geography of east Asia means that (LCC)s cannot serve the entire region with existing narrow body technology, although (LCC)s in some markets can come close. The final analysis in this report considers the ability of the Value Alliance to link NE Asia with SE Asia, and vice versa.
6 of the members have routes between NE and SE Asia. Vanilla Air (VNL) operates wholly within NE Asia but is examining a Taipei base to use 5th freedom rights to fly to SE Asia. Cebu Pacific (CEB) has the greatest number of flights between NE and SE Asia. This is probably unsurprising given the Philippines' geographical position, which is more between the regions. Tigerair (TGR) and Scoot (SCT) have approximately 10 routes between the regions.
Evaluating the opportunity is complex: routes are often to points where there is no service from another Value member, or there is limited frequency, and it may not enable a same-day connection, or a connection within reason. Some connections would be circuitous. But as noted earlier, it is too soon to evaluate the opportunity for the alliance.
* Outlook: long haul operator, member with central geography, could bring opportunity but also competition.
The Value Alliance faces the same conundrum as full service alliances: adding members brings opportunities but also competition. A member that is more central between the regions (such as in Hong Kong or Taiwan) could enable more links and connection opportunities.
Alternatively, that member may prefer to serve points on its own. (As (CAPA) has previously recorded, some Value members are expected to work with HK Express outside the (LCC) alliance organizations). More long haul operations could mean that an airline gains access to the strong regional hub of a partner in a different part of Asia. Alternatively, this could preclude cooperation between other members.
The opportunities for the Value members today are varied, but they do exist. With time, the synergies within the alliance should become greater. Most critically, this is all being developed with minimal cost, unlike the high joining and membership fees of full service alliances. While the gains may not seem as significant, neither are the costs.
Conclusion: As (CAPA) has previously concluded of the alliance:
* Joining the Value Alliance should be an appealing option for Asia’s independent (LCC)s since the cost and risk of membership are small. At the May 16, 2016 launch event, executives representing the founding members stressed that the concept is to add incremental passengers without incurring additional cost or adding any complexities. The members said that they would not have joined, if they had not been able to retain their business models.
* The main objective is for each member to increase their brand awareness across Asia-Pacific. The main objective is for each member to increase their brand awareness across Asia-Pacific and augment their distribution network through cross-selling. The alliance members pointed out that most of their brands are not well known outside their respective home markets.
* The members expect that the alliance will only generate a small increase in their interline traffic volumes (at least in the initial phase).
* Interline traffic for most members is a very small part of their overall business (for some it has even been non-existent) and most members do not expect that interline traffic will ever account for a large share of their overall traffic.
* The Value Alliance essentially offers its members a nothing-to-lose alternative for attempting to increase transit traffic and attract passengers in new markets who are now flying with other airlines. Even if the alliance only brings each member a +1% incremental gain in passenger traffic, it can be deemed a success, given the limited cost and the simplicity of the new offering.
* Asia’s independent (LCC)s need to evolve and embrace new alternatives if they are to maintain their growth trajectory and succeed in an increasingly competitive marketplace.
July 2016: Cebu Pacific (CEB) has placed a firm order for 2 Airbus A330-300s, Airbus (EDS) said on July 29.
The new aircraft will expand (CEB)’s existing fleet of 6 A330s, which operate on long-haul services to the Middle East and Australia, as well on certain domestic and regional sectors.
“(CEB) has proven to be the right choice for our long-haul low-fare product,” (CEB) President & (CEO) Lance Gokongwei said. “The newly ordered aircraft will enable us to add more long-haul routes, including the launch of our 1st flights to the USA.”
Cebu Pacific (CEB) operates 49 Airbus aircraft, including 6 A330s and 43 A320 family single-aisle aircraft. In addition to the recent announced contract (CEB) has 32 A321neo aircraft on order. It is also a customer for ATR turboprops.
December 2016: Cebu Pacific (CEB) has confirmed it is still considering an order for new wide body aircraft that it could use for its 1st transpacific flights.
May 2017: News Item A-1: Cebu Pacific Air (CEB) added another domestic route on May 15. On this day (CEB) began 3x-weekly (Mondays, Wednesdays and Fridays) service between Cebu (CEB) and Busuanga (USU). The 467 km will be operated by CebGo (SRQ) using its ATR 72s.
Competition is provided by Philippine Airlines (PAL) which already serves the route daily with a Bombardier Dash 8-Q400. Cebu Pacific (CEB) now serves >30 destinations from Cebu of which just 5 are outside of the Philippines. (CEB) and CebGo (SRQ) account for 42% of scheduled seat capacity at the airport. This makes (CEB) the biggest carrier at the airport ahead of Philippine Airlines (PAL) (28%) and Philippines AirAsia (APG) (12%).
News Item A-2: Cebu Pacific (CEB) is withdrawing almost all of its Middle East flights because of rising competition on these routes. By early July, (CEB) will suspend services from Manila, Philippines, to Doha, Qatar; Kuwait City; and Riyadh, Saudi Arabia. This follows the decision by Philippine Airlines (PAL) to suspend its Manila - Abu Dhabi route in July.
News Item A-3: Cebu Pacific Air (CEB) started its 2nd new domestic route from Cebu (CEB) with the launch on May 16 of a 4x-weekly service to Cotabato (CBO). The 351 km route will be flown by CebGo (SRQ) using its ATR 72s. No other carrier connects these 2 airports. Cotabato is located on the province of Maguindanao. The airport’s only other scheduled services are to the capital, Manila, which are offered by both Cebu Pacific (CEB) and Philippine Airlines (PAL).
Cotabato City is home of Sultan Haji Hassanal Bolkiah Masjid, also known as the Grand Mosque of Cotabato, which is the largest mosque in the Philippines. Completed in 2011 the facility can accommodate 15,000 people and was funded by the Sultan of Brunei.
May 2017: A330-343E (1789, RP-C3348), ex-(F-WWCD) delivery.
June 2017: Cebu Pacific (CEB) has ordered 7 Airbus A321ceos as part of its drive to expand its domestic and regional services.
Click below for photos:
CEB-757-236-CITY OF MANILA
CEB-A320 - 2012-02
CEB-A320 - 2014-09
CEB-A320neo SHARKLETS 2013-01
CEB-A321ceo - 2017-06.jpg
CEB-A330-300 - 1ST - 2013-06
CEB-A330-300 - 2012-04
CEB-ATR72-212A - 2013-11
00/0 ORDERS (2001-01) 717-200, TO REPLACE DC-9'S, 10/4 DEFERRED.
0 757-236 (RB211-535E4) (218-24370, /89 RP-C2714; 225-24371, /89 RP-C2715 "CITY OF MANILA"), EX-(BAB), (PSS) LSD, 24370; LST (SLO) 2006-03; RTND; LST GIRJET (GIR) 2006-05. 179Y.
0 757-236ER (RB211-535E4) (441-25597, /92 RP-C2716), EX-(ARE), (BOU) LSD 2002-12. RTND, LST (OAE) 2006-01. 186Y.
0 DC-9-31 (JT8D-9A HK) (1036-48143, /81 RP-C1541 2001-10; 921-48116, /79 RP-C1543, 2003-01; 922-48117, /79 RP-C1544, 2002-11; 920-48115, /79 RP-C1542, 2003-02), EX-(USA), (GRB) LSD. RTND. 110Y.
0 DC-9-32 (JT8D-9A) (176-47070, /67 RP-C1508; 188-47071, /67 RP-C1509 "CITY OF CEBU;" 352-47266, /68 RP-C1535), EX-(ACN), 47071; RTRD. 110Y.
0 DC-9-32 (JT8D-9A) (906-47789, /79 RP-C1503; 910-47792, /79 RP-C1504; 911-47793, /79 RP-C1505; 916-47795 /79 RP-C1506), EX-(GIA) & (AUS), (GUI) LSD. RTND. 115Y.
0 DC-9-32 (JT8D-9A) (471-47353, /69 RP-C1536; 175-47069, /67; 47485), EX-(ACN). RTND. 110Y.
0 DC-9-32 (JT8D-9A) (466-47239, /69 RP-C1538; 684-47570, /73 RP-C1537), EX-(ADR) 1998-12. RTND. 115Y.
0 DC-9-32 (JT8D-9A) (868-47734, /77 RP-C1540 "CITY OF DAVAO"), EX-(TWA). RTND. 110Y.
0 DC-9-32 (JT8D-9A HK) (956-48132, /80 RP-C1545, 2003-09; 959-48133, /80 RP-C1546, 2003-10), BF AIRGROUP. RTRD. 110Y.
11 A319-111 (CFM56) (2556, RP-C3189, 2005-09; 2586, RP-C3190, 2005-10; 2625, RP-C3191, 2005-12; 2638, RP-C3192, 2005-12; 2786, RP-C3193, 2006-06; 2790, RP-C3194, 2006-06; 2821, RP-C3196, 2006-07; 2831, RP-C3195, 2006-07; 2852, RP-C3197 2006-08; 2876, RP-C3198, 2006-09), 2625 TO ALLEGIANT AIR 2016-09. 150Y.
25 ORDERS A320-200 - - SEE ATTACHED - - "CEB-2010-05 A320 ORDERS:"
2 A320-200, (RBS) AVIATION CAPITAL 6 YR LSD:
6 A320-214 (CFM56) (2419, RP-C3240, 2005-05; 2439, RP-C3241, 2005-05; 3433, RP-C3245, 2008-03; 3472, RP-C3246, 2008-04; 3487, RP-C3247, 2008-05), (TCI) LSD. 2419 RTND 2012-07. 168Y.
4 A320-214 (CFM56) (2994, RP-C3242, 2007-01; 4574, RP-C3263, 2011-01; 4852, RP-C3264, 2011-09), 1ST WITH SHARKLETS 2013-01. 168Y.
6 A320-214 (CFM56) (3272, RP-C3244 2007-10; 3762, RP-C3249, 2009-01; 3767, RP-C3250, 2009-01; 4861, RP-C3265, 2011-10; 4870, RP-C3266, 2011-10; 5917, RP-C3279, 2013-12), (GEF) LSD. 168Y.
7 ORDERS A321ceo:
32/8 ORDERS A321neo, 220 PAX:
7 +1 ORDER A330-343E (TRENT 772B) (1420, /13 RP-C3341 - - SEE PHOTO - - "CEB-A330-300 1ST - 2013-06;" 1495, /14 RP-C3343, 2014-03; 1527, /14 RP-C3344, 2014-05; 1552, RP-C3345, 2014-08; 1789, RP-C3348, 2017-05), EX-(F-WWDH, F-WWTR, F-WWTO, & F-WWCD), (TCI)/(AWW) LSD 2013-06. +2 INTREPID AVIATION (INL) LSD IN 2014. 436Y.
8 +2/4 ORDERS ATR 72-212A (779, RP-C7250, 2008-02; 784, RP-C7251, 2008-03; 828; 842, RP-C7255, 2008-12; 847, RP-C7256, 2009-01; 857, RP-C7357), ALL TO BE TRANSFERRED TO CEBU PACIFIC AIR SUBSIDIARY, CEBGO (SRQ) OPS IN 2015-10. 72Y.
Click below for photos:
CEB-1-LANCE GOKONGWEI CEO 2012-04
CEB-4-IAN WOLFE - 2013-10
CEB-9-KRISTOFFER KING - 2013-10
JOHN GOKONGWEI, CHAIRMAN EMERITUS.
LANCE GOKONGWEI, PRESIDENT & CHIEF EXECUTIVE OFFICER (CEO).
JAIME CABANGIS, CHIEF FINANCIAL OFFICER (CFO) (2012-01).
GARY KINGSHOTT, SENIOR CONSULTANT, EX-(CEO) OF (SAQ) (2008-04).
IAN WOLFE, SENIOR CONSULTANT ENGINEERING & FLEET MANAGEMENT.
DANILO MOJICA, GENERAL MANAGER & BUSINESS UNIT HEAD.
ALEX REYES, VP COMMERCIAL PLANNING & GENERAL MANAGER LONG HAUL DIVISION.
CAPTAIN VICTOR CUSTODIO, VP FLIGHT OPERATIONS.
JORENZ TANADA, VP CORPORATE AFFAIRS.
MS PEGGY PEREZ-VERA, VP CORPORATE PLANNING & EXTERNAL AFFAIRS.
SALVADOR RAMIREZ, VP CORPORATE LOGISTICS.
MS CANDICE IYOG, VP MARKETING & DISTRIBUTION.
JOEY MACAGGA, VP CARGO & FUEL OPERATIONS.
MS JEANETTE YU, VP TREASURY.
FELINO CUSTODIO, VP MAINTENANCE & ENGINEERING.
ANTONIO JOSE RODRIGUEZ, VP AIRPORT SERVICES.
MS ROSE SANTOS, DIRECTOR AIRLINE QUALITY, SAFETY & SECURITY,
ALEXANDER LAO, DIRECTOR REVENUE & PRICING.
LEONARDO SALANGA, MANAGER MAINTENANCE.
RODOLFO DADIVAS, MANAGER TECHNICAL SERVICES, (firstname.lastname@example.org) (2000-04).
JOB REJANTE, MANAGER QUALITY CONTROL (QC).
KRISTOFFER KING, POWERPLANT MANAGER, EX-(AAL)/(AMW)/(EAL)/(SGC).
Kris graduated from the University of Hertfordshire in the UK in 2000 with a degree in Aerospace Engineering and joined Virgin Atlantic Airways (VAA) as a Powerplant Engineer soon after.
He worked with Virgin Atlantic (VAA) for 8 years gaining experience on various engine types and developed an in depth knowledge of engine maintenance and support.
Kris joined Royal Aero GmbH in 2008 as their Principal Powerplant Engineer and managed a wide ranging portfolio of engines on behalf of banks, lessors and operators worldwide. He provided a wide range of support to his customers ranging from workscope definition and shop visit management to Maintenance Repair & Overhaul (MRO) services contracts and lease agreement negotiations. During this time he also worked closely with many engine (MRO)s in North America, Europe and Asia as well as Original Equipment Manufacturer (OEM)s.
In 2010, Kris began supporting Cebu Pacific Air (CEB) in the Philippines, providing them with engine management services for their growing fleet of Airbus and ATR airplanes. In 2011, Kris successfully completed a project to select the new engine type for 40 A321neos and in the same that year completed an identical project for the A330.
In 2012, he moved to Manila and became the Powerplant Manager for Cebu Pacific (CEB). He is now responsible for managing all aspect of powerplant engineering on a fleet of 47 airplanes.