Value Alliance members Jeju Air of Korea and Cebu Pacific Air of the Philippines began joint air service last month.
The first interline tickets went on sale in June. Korean travelers can now fly to Sydney, Australia via Manila in the Philippines. Interline tickets refer to a set of tickets that connects flight routes through partner carriers.
Jeju Air and Cebu Pacific are both members of Value Alliance consisting of eight major low-cost carriers in the Asia-Pacific region. These members include Nok Air and Nok Scoot of Thailand, Scoot of Singapore, Tiger Australia and Japan’s Vanilla Air. Jeju Air plans to sign partnerships with other members of the alliance so it can offer greater international service without having to expand its fleet.
Membership in the alliance was one of Jeju Air’s main strategies to survive in the increasingly crowded and cutthroat Korean LCC market. More low-cost carriers are jumping into the business, even as the six existing ones are competing for a limited pie of travelers in the country.
Starting October 1, Philippines AirAsia (Z2) will start flying to Iloilo daily (3 times a day) using the 180 seat Airbus 320.
“The addition of Manila–Iloilo route will further expand our domestic footprint in the Visayas region following our expansion in Cebu via the launch of international and domestic flights,” Philippines Air Asia CEO Dexter Comendador said. Z2 competes directly with Philippine Airlines and Cebu Pacific for this route.
Philippines AirAsia has a fleet of 15 Airbus 320 planes.
The line between legacy airlines and budget ones continues to blur as more budget carriers fly beyond the four-to-five-hour range, eyeing markets traditionally served by full-service operators. AirAsia’s addition of Honolulu as a destination is just the latest.
At the same time, legacy airlines are starting budget offshoots, such as Lufthansa’s Eurowings and Singapore Airlines’ Scoot.
Long-haul operations are usually tough on the business models of budget airlines — fuel prices are a higher percentage of a budget carrier’s operating expenses — and there is no telling how long fuel prices will stay at their current low levels.
The longer the flight, the higher the expectations of creature comforts. But new and more fuel-efficient long-range aircraft are making it possible for low-cost carriers to ply the same distant routes that have traditionally been the domain of the big guys.
Budget aviation history is dotted with the failure of many who tried to go farther and failed. Yet, ambitious entrepreneurs, from Sir Freddie Laker — who pioneered the trans-Atlantic no-frills model in the 1970s with his Skytrain service — to AirAsia founder Tony Fernandes, keep trying.
This is the spirit of adventure that keeps the industry learning and thriving.
In June, AirAsia will introduce flights from Kuala Lumpur to Honolulu under its long-haul AirAsia X banner, becoming the first budget airline approved by the US Department of Transportation for operations between the US and Asia.
The flight will clock 16 to 18 hours, including a two-hour transit stop in Osaka. There will be four weekly services.
Mr Fernandes made a similarly bold move back in 2009, launching services to London, and, in 2011, to Paris. He did it despite the collapse in 2008 of Hong Kong’s Oasis Airlines, which commenced services to London (Gatwick) in 2006 followed by services to Vancouver in 2007.
Before it folded, Oasis was voted “World’s Leading New Airline” at the 2007 Annual World Travel awards.
Ultimately, Mr Fernandes also suspended AirAsia X’s operations to London and Paris in 2012, because of high fuel prices and weak demand.
Yet that setback has not stopped him from launching new services to Honolulu.
He has also confirmed that Air-Asia X will resume operations to London when the airline receives its new, more economical long-range Airbus A330-900neo fleet in 2018. Rome and Frankfurt are also in the plans.
More than just dollars
Price is a budget airline’s main feature and attraction. AirAsia’s introductory offer of RM2,300 (S$731) for a return ticket from Kuala Lumpur to Honolulu is a steal.
There will be takers, but unless AirAsia is able to grow the traffic for the route, the limited market may not be able to sustain it in the long run.
Honolulu is very much a leisure destination.
But AirAsia faces competition on this route from legacy airlines such as Japan Airlines, Korean Air, Air China, China Airlines and Philippines Airlines, whether direct from their home bases or in code-share arrangements with partner airlines such as Delta Air Lines and United Airlines.
Besides, tour planners for the US West Coast that include Honolulu as part of the itinerary are inclined to favour connections from San Francisco or Los Angeles.
AirAsia therefore cannot depend solely on point-to-point traffic between Kuala Lumpur and Honolulu.
Tweaking the model
As budget and legacy airlines continue to borrow ideas from one another, that is where the line blurs.
Full-service airlines are increasingly unbundling their products and offering meals and baggage space as add-ons.
British Airways is the latest airline to stop offering free meals for the short-haul, and ironically, Delta is considering re-introducing complimentary refreshments.
Ryanair too has become more customer focused, expunging its erstwhile terse take-it-or-leave-it attitude.
Some budget carriers are already offering premium class products, especially for the medium to long haul, to attract business travellers and others.
A common playing field can only mean cheaper seats for all. For passengers, that, at least, is the hope.
Aviation think tank CAPA, Centre for Aviation, said that Philippine low cost carrier Cebu Pacific (5J) is evaluating the acquisition of either Airbus 350 or Boeing 787 for its nonstop PH-US flights. Both the A350 and B787 are larger and long-range aircraft.
According to CAPA Analysis, Cebu Pacific is now entering the next phase of its longhaul plan after the delivery of its seventh and eight A330-300 this December 12, 2016 and January 2017 respectively. These A330s are currently deployed primarily for its Middle East and Australia flights.
This ‘next phase’ looks at larger planes with longer range. This makes the A350 and B787 the most ideal aircraft. By third quarter of 2017, 5J is set to offer formal invitations to both Airbus and Boeing.
No official word or announcement yet from Cebu Pacific when the CAPA Analysis was released yesterday.
Currently, national carrier Philippine Airlines has no competition in the lucrative direct PH-US trans-Pacific flights.
Starting 16 December, the country’s flag carrier Philippine Airlines will fly to Singapore from Cebu. PAL also announced that it will launch Cebu-Caticlan-Clark on the same day.
PR517, CEB-SIN, will be four times/week (Mon-Wed-Fri-Sun) departing CEB at 2200H and will arrive in SIN at 0145H the following day. PR 518, SIN-CEB, departs SIN at 0245H and will arrive in CEB at 0640H.
PAL currently flies to Nagoya, Narita, Los Angeles, Osaka and Incheon from Cebu.
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