Cebu Pacific unveils budget long-haul flights

TIn a briefing, Lance Gokongwei, Cebu Pacific president and chief executive, told reporters that the airline will lease up to eight Airbus 330- 300 aircrafts at $ 220 million apiece for a 12- year period, the first four of which will be operational by 2014.

The other four Airbus aircraft will be fully operational by 2016.

The additional aircraft would add close to one million passengers in the first year of operation. HE airline unit of JG Summit Holdings Inc. on Tuesday said that it would offer budget long-haul flights in the third quarter of next year amid the country’s Category 2 status.

Target market

The A330-300 would allow Cebu Pacific to offer flights anywhere within 11 hours from Manila, enabling the airline to tap “underserved” markets such as Australia, Middle East, parts of Europe and the United States, particularly those cities where large Filipino communities reside.

Gokongwei noted that more than half of Filipinos deployed in Europe, Middle East, Oceania and the United States take multiple stops and connecting flights because no home carrier can directly fly them to those areas.

“We’re highly confident to succeed in this endeavor. With what we’ve done in Asia, it’s Cebu Pacific’s job not just to grab market share but to stimulate markets,” Gokongwei said.

The A330-300, which has a capacity of 400 passengers, will give the company’ the lowest cost per seat, bringing down long-haul fares by 35 percent.

Specific flights would be disclosed as soon as the company secures the necessary regulatory approvals and once it comes out with the flight schedules, Gokongwei said.

The expansion would also add another 500 employees to its workforce, which will be primarily engineers, pilots and cabin crew. Aviation status upgrade The company’s venture to offer long-haul flights came after the European Union placed last year airlines from the Philippines on its blacklist, citing their failure to comply with international safety standards.

The Federal Aviation Authority placed the Philippines under “category 2” status, preventing local airlines from expanding operations in the United States. Philippine Airlines is the local carrier that has operations in the US.

“With the support of all major airlines and with the continuing support from [International Civil Aviation Organization] specialist in technical training, we’re very confident that before the end of the year, the significant safety issues and the EU blacklisting will be lifted from the Philippines,” Gokongwei said.

“But then again, [if the ban is not lifted] there are a lot of routes we can fly to outside of Europe and US,” he added.

Amid efforts to offer long-haul flights, the airline will continue to offer low fares to various Asian and local destinations, Alex Reyes, Cebu Pacific vice-president for commercial and network planning said.

Profitability seen to continue

Cebu Pacific is seen to “perform well financially” this year 2012, which is turning out to be another “competitive” year because of higher fuel prices.

“We are one of the few airlines in the world operating consistent profit despite the high fuel environment. We will continue to reinvest those profits in improving services by buying new aircraft, training our people, and introducing new routes,” Gokongwei said.

Gokongwei expects its passenger volume in international routes to grow by 20 to 25 percent and those in domestic routes to expand by 10 to 15 percent. Its passenger count is seen to increase from 11.9 million in 2011 to about 14 million by yearend.

Cebu Pacific flies to 19 international and 34 domestic destinations. It operates in Manila, Cebu, Clark and Davao. It has a fleet of 29 Airbus and eight ATR 72-500 aircraft, the youngest fleet in the Philippines and one of the youngest in Asia. Between 212 and 2021, Cebu Pacific will take an additional 23 Airbus A320 and 30 Airbus A321neo aircraft.

Its shares closed at P67.10 each on Tuesday, down 5 centavos or 0.08 percent from the previous day’s P67.15.