Manila is the World’s 10th Largest Low Cost Carrier Capacity



Manila ranked as the 10th city in the world with the highest low cost carrier (LCC) seat capacity after New York, according to global travel technology provider Amadeus.

Amadeus Air Traffic, part of the company’s Travel Intelligence Portfolio of solutions, calculated the Philippine capital with an LCC capacity of 5.74 million seats for the first half of 2013 or two percent higher as compared to the same period last year.

The total capacity of Manila means that it is just a little over 850,000 seats behind New York City which is currently ranked ninth on the list.

However, two other Asian cities are currently outpacing Manila with Jakarta ranked third with a capacity of 9.38 million representing a 44 percent increase and Kuala Lumpur with 8.16 million seats or a rise of 15 percent from 2012. There are five low cost carriers operating in the Philippines, such as AirAsia Zest, Cebu Pacific, Philippines Air Asia, PAL Express and Tigerair Philippines. Eight out of 10 seats on the domestic market are low-cost carrier seats.

Amadeus LCC specialist Alexandre Jorre said that Asia is currently experiencing a big leap in services provided by LCCs across the region.

“We see a natural boom in LCC capacity across Asia, where point-to-point air travel is largely underserved. However, across the mature markets of Europe and North America capacity is constrained, which may explain why some LCCs are considering new approaches to secure future growth,” Jorre said.

London which saw a three percent increase in LCC capacity for the six months still dominates the market with a capacity of 14.77 million. It is followed by Sao Paolo with a capacity of 10.75 million or up seven percent the previous year.

Other cities ranked in the top 10 are Las Vegas, fifth with 7.52 million capacity; Denver, 6.90 million capacity; Chicago, 6.85 million capacity; and Barcelona, 6.70 million capacity.

With three Asian cities ranked in the top 10 in terms of LCC capacity, the region during the first half of the year also increased its LCC seat capacity by 28.70 percent to 129.30 million.

The other big regional jump in terms of LCC capacity were experienced by the Middle East which was up 17.70 percent to 13.50 million seats and Africa which rose 13.10 percent to 4.30 million

However, Europe and North America which grew by only 0.80 percent and 1.50 percent still holds the highest LCC capacity with 182 million and 154 million respectively.

“With a 25 percent year-on-year rise over the first half of 2013, LCC bookings in Amadeus are growing significantly. This is a very encouraging sign that our ability to adapt to LCC distribution needs is proving attractive to both travel agents and airlines. LCCs are seizing the opportunity we offer to penetrate the high-yield business travel market and expand into new regions where they have limited brand presence,” Jorre said.

The Amadeus Air Traffic can calculate estimates for total air passenger volume for any origin and destination worldwide, including those dominated by LCCs.


Source: Bernie Magkilat | Manila Bulletin


Budget Airlines Crowd Asia



Asia’s skies are about to become more crowded. At least 10 new budget carriers are expected in the region by the end of next year, expanding fare choices for consumers but squeezing airline profit margins even more.

The growth in new routes is shifting east to highly congested and expensive centers such as Taiwan and Hong Kong, though Southeast Asia remains a lucrative market as more people turn to budget travel.

On Monday, Taiwan’s China Airlines Ltd. said it would team up with Singapore’s Tiger Airways Holdings Ltd. to launch Taiwan’s first budget carrier, hoping to link neighboring tourist and business hot spots when it starts service in the fourth quarter of 2014.

TransAsia Airways Corp. in Taiwan is also planning its own low-cost airline, while two other budget operations are being launched in neighboring Hong Kong, a first for the Chinese city.

“Taiwan is in an ideal location for low-cost carriers because the flight time to most destinations in Southeast and Northeast Asia is within four hours,” said Huang-Hsiang Sun, chairman at China Airlines. The carrier will own 90% of Tigerair Taiwan, with the rest to be held by Tiger.

Taiwan has been slow to embrace budget-airline travel because of a small domestic market, while earlier restrictions on air rights made it difficult for airlines to develop regional and international services.

The popularity of budget flights has forced many national carriers to slash fares to better compete against low-cost carriers.

By contrast, many Southeast Asian airports have the capacity to handle much more budget-related traffic. At Kuala Lumpur’s airport – home to AirAsia Bhd. – budget-airline flights often exceed those of full-service airlines.


In Thailand, four new low-cost airlines are being launched, fueling more rivalry between the region’s two biggest no-frills operators, Lion Air and AirAsia.

The Thai unit of Indonesian discount carrier Lion Air started operations last week, taking on the local operations of AirAsia. Scoot, the low-cost long-haul unit of Singapore Airlines Ltd., said Monday it will start a Bangkok-based carrier with local budget airline Nok Air, to be called NokScoot.

In the Philippines, operating regional budget carriers include Cebu Pacific Air, PAL Express, AirAsia Zest, and Tigerair Philippines.

In Southeast Asia, where bustling economies and thrifty passengers have kept budget airlines profitable, low-cost carriers account for more than 52% of air capacity, according to consultancy CAPA-Center for Aviation.

That is more than double their share for all of the Asian-Pacific region. Fares between routes such as Singapore to Kuala Lumpur in Malaysia go for as low as US$20 on budget airlines, making the rates comparable with those of road-based transportation.

Faced with increased competition at home, established budget-airline brands in Southeast Asia have expanded into more costly locations in East Asia such as Japan, while South Korean airlines have started their own budget ventures.

But analysts and industry executives say that market still remains largely unproven, given the challenges of achieving scale alongside high airport fees and traffic bottlenecks. An executive at low-cost carrier Jetstar Japan Co. said earlier that ground-handling fees at the nation’s airports are “several times higher” than those in Singapore, adding to the airline’s cost burdens.

“Profit margins are very thin in East Asia because of high operating costs. Unless there’s strong government support, it will be very difficult for budget airlines here to achieve high utilization rates and turnaround times for their planes in order to turn profitable,” said Kelvin Lau, an airline analyst at Daiwa Securities. Adding to the constraints are the limited takeoff and landing slots at airports such as Hong Kong during daytime and evening peak hours.

But there is significant room for growth. In Hong Kong and Taiwan, budget airlines account for only 5% of available seat capacity, according to some market estimates, compared with about 30% to 35% in Singapore.

Budget carrier Hong Kong Express Airways Ltd. sold more than 200,000 seats in just two-and-a-half months since its launch, after the former full-service airline converted into the city’s first short-haul budget airline.


Source: The Wall Street Journal

Cebu Pacific Starts China Flights via Clark International Airport (CRK)



CLARK FREEPORT — The Clark International Airport (CRK) is closing 2013 on a good note as it starts servicing the Shanghai-Clark route through Cebu Pacific Air beginning Saturday, an airport official said.

Cebu Pacific will fly twice weekly to and from the Chinese city for a year under an exclusive arrangement with Fontana Leisure Parks and Casino here, said Victor Jose Luciano, president and chief executive officer of the state-owned Clark International Airport Corp.

Cebu Pacific is dedicating a 124-seat Airbus A319 for the Shanghai-Clark flights, Luciano told reporters on Thursday.

“We are also looking at flights to Guangzhou and other cities in China. Air China and TigerAir Philippines are interested,” he said.

The 90-percent passenger load of Middle East airlines Qatar and Emirates, which began flights in October, and the Davao route of TigerAir Philippines since Dec. 17, overturned the 30-percent fall in passenger volume when AirAsia Philippines, trying to boost the operations of its partner Zest Air, moved to the Ninoy Aquino International Airport.

 Source: Tonette Orejas, Philippine Daily Inquirer

Philippine Airlines To Mount More Flights To Australia



TORONTO – More than two years after suspending its Manila-Brisbane flight, Philippine Airlines plans to expand its capacity in Australia.

In a briefing late Monday, Felix Cruz, PAL vice president for marketing support, said the flag carrier plans to fly to Darwin, Australia starting April.

The capital of the Northern Territory, Darwin is considered Australia’s gateway to Asia.

At present, PAL flies to Melbourne and Sydney after the airline suspended its Brisbane operations because of weak demand.

Cruz said developing new markets through route expansion, fleet modernization and customer service enhancements are part of PAL’s growth strategy.

He said PAL also plans to revive flights to the Middle East late next year. The carrier has a code-sharing scheme with Middle Eastern carriers for flights to the United Arab Emirates.

PAL flies 14 times a week to Dubai and Abu Dhabi, eight times a week to Bahrain, and seven times a week to Doha, Qatar. The carrier stopped its direct flights to UAE in 1998 because of stiff competition from state-subsidized carriers in the region.

PAL also cancelled its Manila-Riyadh route in March last year, or a year after resuming flights.




Jetstar Australia To End Manila Service in March, 2014



MANILA, Philippines – Jetstar Australia has announced that it will be closing its Darwin base and dropping all services to Ninoy Aquino International Airport in Manila.

The airline revealed that all Philippine services operated by Jetstar Australia would be dropped as of March 31, 2014 citing increasing competition from foreign carriers. The airline operated four weekly flights between Darwin and Manila that continued onto Tokyo.

The entry of Philippine Airlines into the Manila-Darwin market last June is expected to have played a role in Jetstar Australia’s decision. According to Stephen Moynihan, a spokesperson for Jetstar Australia, passengers wishing to travel to the Philippines on Jetstar from Australia will now have to route through Singapore to board the Jetstar Asia service to Manila.

Philippine Airlines arrived in Darwin in June 2013 with daily service from Manila complemented by four onward flights to Perth and three to Brisbane. However, the service to Perth was dropped in September with Philippine Airlines opting to maintain the Manila-Darwin-Brisbane route that has proven to be successful. Darwin has been a particularly solid market for Philippine Airlines as the carrier has been able to attract a number of passengers from the city’s Filipino community as well as transit traffic connecting beyond Manila onward to Japan.

Jetstar Australia parent Qantas says that the increased competition between Manila and Darwin has contributed to its problems as the carrier tries to cut costs by $2 billion over the next three years. The decision to drop Manila is part of a greater effort to restructure with Jetstar Australia shifting three of its aircraft stationed at Darwin to Adelaide resulting in the loss of 93 jobs in Darwin. “Jetstar has been clear in the past that our flying from Darwin is among the most marginal on the network,” the airline reported. “It makes sense to base aircraft where there is more network growth.”


Source: ETN Global Travel Industry News

TigerAir Philippines Eyes Davao International Airport as New Hub


LOW-COST carrier TigerAir Philippines, which re-launched its daily Manila-Davao-Manila flight on December 2, is looking at the Francisco Bangoy International Airport in Davao City as its new hub for international flights.

The budget airline is also set to launch its thrice-a-week Clark-Davao-Clark flight on December 17.

“We want to make our Manila-Davao and Clark-Davao routes successful first. If we see potential in Davao as a hub, then we will expand to international flights,” TigerAir Philippines vice president for commercial Jose S. Laurente Jr. said in Tuesday’s press launch at Seda Hotel.

He said they not only want to flourish in the domestic routes but also in international flights. But in order to attain this, he pointed out there is a need for cooperation among tourism stakeholders in Davao Region.

Department of Tourism Assistant Secretary Arturo P. Boncato Jr. said if plans materialize for the Davao airport to becomes a hub for the international flights of TigerAir, it will help decongest the Ninoy Aquino International Airport (NAIA).

“If we become a hub, we don’t need to fly to Manila or Cebu anymore to go to other destinations. Hopefully, in the next three years, we can also see other airlines using Davao as their hub,” he said.

Boncato also said the agency is equipped with guidelines that will help TigerAir and also other airlines in utilizing Davao as a jump-off point to other international destinations.

For instance, he said they can get a 50 percent off in landing and takeoff fees and regulatory fees if these airlines fly within the BIMP-Eaga sub-region.

Laurente said that at present, they are utilizing the NAIA Terminal 4 and Clark International Airport as the airline’s hub.

They are presently developing their lounge at Terminal 4 for their passengers. They are also collaborating with international airlines Emirates and Qatar Airways in connecting their arriving passengers from Clark to Davao.

TigerAir offers seven flights a week for Manila-Davao while three flights a week for Clark-Davao and vice-versa.

Tigerair relaunched its Manila-Davao and introduced their Clark-Davao routes in a press launch at Seda Hotel in Davao City on Tuesday.

“Earlier, in June, we stopped operations here but now, we are back and today, we want to stay. We have also added the Clark-Davao route too, to bring in more passengers here,” Laurente said.

Boncato said the addition of the Clark-Davao route is very strategic since it will now connect Davao City to Northern Philippines.

“Davao City and also the region will have an increase in arrivals through this route,” he said.

Laurente said they have relaunched their Davao routes because of the region’s progressiveness, diversity, and basically being a major tourism destination in Mindanao.

They are also promoting Davao as a place “where business ends with pleasure.”

“Especially to those who are in business trips, we want to maximize their stay in Davao and relax here,” Laurente said.

They also have domestic flights to and from Manila to Bacolod, Cebu, Iloilo, Kalibo, Puerto Princesa, and Tacloban and Clark to and from Kalibo. International flights are Clark to Bangkok, Hong Kong and Singapore, Kalibo to and from Singapore, and Manila to and from Phuket.

At present, the airline has an existing fleet of three 180 seating capacity Airbus A320s and two 140 seating capacity A319s.

Source: Reuel John F. Lumawag, Sun Star Davao

Tigerair Philippines Sets Flights to South Korea, Japan


LOW-COST carrier Tigerair Philippines on Friday said it will mount flights to South Korea and Japan early next year.

Tigerair Philippines President Olive Ramos said the budget airline wants to further expand its Clark operations by conducting international flights via Clark to Incheon in South Korea and Tokyo, Japan, by early 2014.

“Clark International Airport is a vital location for our operations, especially in our flights in the Asia-Pacific region, and we intend to expand our presence in the area,” Ramos said.

At present, Tigerair flies to Hong Kong, Singapore and Bangkok with domestic flights to Kalibo via Clark Airport.

“With these flight, travelers from the Northern and Central Luzon no longer need to drive all the way to Metro Manila to take their flights to these destinations,” Ramos added.

Also, Tigerair will formally launch its Clark-Davao flights on December 17 with a tri-weekly frequency as part of its expansion programs at Clark International Airport.

“Tigerair will maximize its presence in Clark and as a hub for its flights because of its ideal location. Unlike the Ninoy Aquino International Airport in Metro Manila, it is not as busy and congested,” Ramos said, while adding that “operating in Clark offers many incentives, such the fuel is tax free, and fuel is 60 percent to 70 percent of the cost of operating carriers, That’s why it is cheaper to fly out of Clark.”

For his part, Clark International Airport Corp. (CIAC) President Victor Jose I. Luciano welcomed the additional domestic flights of Tigerair as this would boost passenger volume at the Clark International Airport.

Luciano said the French and the Philippine governments are set to sign a memorandum of agreement that will pave the way for French company Airport Du Paris to plan and design a separate Budget Terminal for Clark International Airport that is designed to handle 15 million passengers annually.

He said the funds for the project amounting to P7.2 billion will be provided by the Department of Transportation and Communication. The project will be implemented in two phases.

Tigerair also mounts domestic flights from Naia Terminal 4 with its Manila-Cebu, Manila-Davao, Manila-Tacloban, Manila-Bacolod, Manila-Iloilo, Manila-Kalibo and Manila-Puerto Princesa flights. It is also flying the Manila-Phuket route.

Source: Lenie Lectura, Business Mirror 

Megawide and India’s GMR Won Bid for Mactan-Cebu International Airport Project

Megawide Construction Corp. and partner GMR of Bangalore, India bested investors led by SM Group, Ayala Corp., San Miguel Corp., JG Summit Holdings Inc., and Metro Pacific Investments Corp. by bidding P14.404 billion to take on the Mactan-Cebu International Airport expansion project.
The consortium GMR Infrastructure of India-Megawide made the highest bid for the project, said Jose Perpetuo Lotilla, undersecretary of the Department of Transportation and Communications (DOTC).
The DOTC Bids and Awards Committee (BAC) will now hunker down to review the financial bids over the next two weeks and issue a notice of award on Jan. 6, 2013, Lotilla told reporters, saying the contract with the winning group will be signed on Feb. 6.
In a separate interview with reporters, PPP Center executive director Cosette Canilao said the bids were beyond government expectations and noted that the Aquino administration was prepared to subsidize the project.
“Those are really good bids, all premium bids and exceeded our expectations. The government was prepared to give a subsidy. We got all the good operators from all over the world to participate. It’s good for the government,” Canilao added.
For Megawide chief financial officer Oliver Tan, it was a David and Goliath story, saying they slew the “Goliaths” by outbidding conglomerates that include SM Group, Ayala Corp.,  San Miguel Corp., and Metro Pacific Investments Corp.
“We really prepared for this…” Megawide chief marketing officer Louie Ferrer told GMA News Online. “It took us months to prepare, and we found a good partner in GMR,” Ferrer said, noting the Bangalore-based operator has three ongoing airport projects in India and Turkey.
According to DOTC, MPIC-JGS Airport consortium made an P11.23-billion bid for the project, AAA Airport Partners bid P11.088 billion, San Miguel Corp.-Incheon Airport wanted the deal for P9.05 billion, while First Philippine Airports tried to bag the airport project for P4.7 billion.
The winner is expected to build a world-class international passenger terminal building – capable of processing eight million passengers a year – for the second-largest Philippine airport after the Ninoy Aquino International Airport.
Ferrer told reporters Megawide already won several public-private partnership (PPP) projects to construct classrooms under the Department of Education’s School Infrastructure Project.

Source: Danessa Rivera/VS/JDS, GMA News

Cebu Pacific To Mount Direct Flights to Riyadh, Dammam


MANILA, Philippines – Budget airline Cebu Air Inc. (Cebu Pacific) is set to mount direct flights to Riyadh and Dammam as part of efforts to expand its routes to the Middle East to serve the needs of overseas Filipino workers.

The low cost carrier is seeking the green light from the Civil Aeronautics Board (CAB) to impose a fuel surcharge on international passengers of Manila – Riyadh and Manila – Dammam flights.

Cebu Pacific intends to impose a $105 fuel surcharge on each passenger for both routes in the Kingdom of Saudi Arabia. The CAB allows airlines to impose fuel surcharge on international and domestic passengers as a temporary relief to help them recover losses arising from the increase in jet fuel prices in the world market.

The low cost carrier launched its first long-haul operations via direct flights between Manila and Dubai in the United Arab Emirates last Oct. 7 using a brand new Airbus A330 aircraft.

The Philippines inked new air services agreements with the Kingdom of Saudi Arabia and the United Arab Emirates in 2012.

In the air pact with the Kingdom of Saudi Arabia, both countries agreed to double flight frequencies to 21 flights per week from the previous 10 between the two countries and to remove limits on flights from Clark international airport in Pampanga.

On the other hand, the agreement with the United Arab Emirates likewise doubled flight entitlements to 28 per week from 14 between the Philippines and the United Arab Emirates.

Rival national flag carrier Philippine Airlines Inc., jointly owned by taipan Lucio Tan and diversified conglomerate San Miguel Corp. (SMC), resumed direct flights to both Riyadh and Dammam using A330-300 early this month after non-stop flights to Abu Dhabi last Oct. 1 and Dubai via sister firm PAL Express last Nov. 6.

The national flag carrier first flew to Riyadh using Boeing 747-400 in March 1987 but the service was suspended in March 2011. It also mounted flights to Dammam in July 1982 via the Dhahran international airport moving to King Fahd international airport in 1999 but was the service was terminated in August 2001.

Likewise, Cebu Pacific is seeking the approval of CAB to impose a $50 fuel surcharge on each passenger of direct flights to Osaka in Japan starting Dec. 20 and to Narita and Nagoya starting March 30 next year.

The Philippines and Japan inked a new air service agreement increasing the number of flights between Manila and Narita to a total maximum 400 per week from the previous 119. It also allowed 14 flights per week between Manila and Haneda as well as unlimited air traffic rights between points in the Philippines except Manila and points in Japan except Haneda.

Japan has been imposing restrictions on local carriers from the Philippines preventing them from mounting additional flights after the International Civil Aviation Organization (ICAO) raised several safety security concerns since 2008. ICAO lifted the concerns last February.

Cebu Pacific’s bid to fly to Europe has been delayed due to Super Typhoon Yolanda as the hearing of its application to enter the European airspace has been deferred by the European Union to March next year instead of last November.

Last July 10, the EU announced the lifting of a ban imposed in 2010 that allowed PAL to mount direct flights to London last Nov. 4.

Source: Lawrence Agcaoili, The Philippine Star