Cebu Pacific & Philippine Airlines Buck Fresh Air Talks Between Philippines, UAE

MANILA – Philippine carriers are bucking a government plan to review its air agreement with the United Arab Emirates (UAE).

Civil Aeronautics Board (CAB) executive director Carmelo Arcilla said the Philippines is mulling fresh air talks with the UAE, confirming Department of Tourism (DOT) Secretary Ramon Jimenez’s recent statements that the air panel was preparing for discussions with its Emirates counterpart.

“We are just hearing out the oppositions from the local airlines,” Arcilla said.

Both Philippine Airlines (PAL) and Cebu Pacific see no need for a new round of air talks, citing unused capacity.

“Given the significant increase in capacity over the past year, CEB believes that a new round of air talks with the UAE should not be held until all available Manila-UAE entitlements are fully utilized by Philippine carriers who are ready willing and capable of operating routes to UAE, including CEB,” JR Mantaring, officer-in-charge of Cebu Air Inc. said in a text message.

A PAL official said pretty much the same thing, adding that the government should guard against overcapacity in the Manila-UAE route.

The Philippine-UAE air agreement provides for a maximum of 14 weekly frequencies for the Emirates Airlines, which has been pressing for fresh air talks after it failed to secure an extension of a third flight between Manila and Dubai amid opposition from PAL and Cebu Pacific.

Philippine data show over 700,000 Filipinos are working in the UAE.


Philippines & Turkey Increase Flights

Turkish Airlines will fly daily to MNL from Istanbul starting 15 October 2015.

CEBU CITY: The governments of Turkey and the Philippines have agreed, after a closed door meeting, to schedule additional flights to accommodate an increase in exchange of tourists between the two countries.

After a two-day air talks in Cebu City, both parties agreed that the frequency of flights be improved from three to fourteen while other destination points in the Philippines have been identified.

“We see Turkey as a very important, lucrative and good market for the Philippines,” Department of Tourism (DOT) Undersecretary Benito Bengzon expresses.

The current air pact grants Turkish carriers to have three frequencies per week to Manila and Clark. Pursuant to that, there are currently thrice-weekly flights between Manila and Istanbul.

Turkish Airlines was launched in the country last March 30 while air service agreements between the two countries started last 2009.

Turkey, which is strategically located in the crossroads of Asia, Europe and Africa, is approximately 11 hours and 50 minutes by air from Manila.

Last year, there were close to 5,000 tourists from Turkey. The DOT has expressed confidence that with the support of industry partners, tourist arrival is expected to double in the next couple of years.

“This is a good way of sharing tourism with another country,” Undersecretary Bengzon adds.

The data from the tourism department shows that there is a 19-percent increase of Turkish tourists from 2012 to 2013. The Turkish Ministry of Culture and Tourism, on the other hand, recorded more than 3,500 tourists from the Philippines in 2014.

“We all know that Cebu is a very strong tourist destination. The next step is that we have to show the Turkish airlines the travel and tour opportunities here,” Undersecretary Bengzon explains.

The Turkish Airlines has previously expressed expectations to leverage on renewed global interest in the Philippines with the country’s impressive economic growth.


Philippines, Qatar Signed New Air Servives Agreement

Hamad International Airport

MANILA – The Civil Aeronautics Board (CAB) announced Friday that the Philippines and Qatar have signed, on May 28 in Doha, a new Memorandum Of Understanding on Air Services, increasing the maximum number of flights for each country from the current eight flights per week to 14, or an increase of 6 flights per week.

The parties also agreed to accommodate unlimited flights between Doha and other airports in the Phil, except Manila. Previously, the entitlements outside Manila were 14 per week to Clark and 14 per week to Cebu.

CAB Executive Director Carmelo Arcilla said that Qatar Airways is currently flying out of NAIA Terminal 1 eight times a week to Hamad International Airport.

Arcilla said that, as a result of the latest air talk agreement, the last one being held in 2009, Cebu Pacific could expect to start services between Manila and Doha on June 5, 2015.

CAB said that there are about 250,000 OFWs in Qatar.

There are six Middle East carriers that fly out of NAIA, Cebu and Clark: These are Qatar Airways, Saudi Arabia, Gulf Air, Emirates Airlines, Kuwait Airways and Etihad Airways.

Sources from the aviation industry note that Qatar is making this aggressive move, pushing to increase its flights, considering that the demand for air travel between the two countries are currently on the downtrend and that even the Middle East market is weak.

One logical explanation seems to be that Qatar is the sixth largest freedom hub airline that relies on the carriage of traffic between city pairs outside of its territory.


CAPA: Cebu Pacific’s Long Haul Operation. Part 2, Australia & Hawaii

Cebu Pacific is preparing to launch services to Hawaii by the end of 2015 and is also interested in launching Melbourne if it is able to secure additional traffic rights for Australia. Honolulu and Melbourne would be Cebu’s sixth and seventh long-haul destination, joining four in the Middle East and Sydney.

Cebu Pacific is also planning to start using its A330-300 widebody fleet to operate some of its flights to Hong Kong, Taipei and Tokyo. It currently uses the A330 on one of its daily Singapore flights and plans to add a second widebody frequency on ManilaSingapore, which is already its largest international route.

The new A330 flights will increase the utilisation rate of its widebody fleet, which is now low for LCC standards, and drive a 30% surge in total ASKs for 2015. The capacity growth is being achieved despite Cebu Pacific only expanding its fleet by three aircraft in 2015, including a single additional A330 as the carrier has shelved plans for adding two more A330s for a total of eight.

Cebu Pacific is eager to make Manila-Honolulu its next long-haul route

Cebu Pacific has been keen to launch services to Honolulu since the US FAA upgraded the Philippines to a category 1 safety rating in Apr-2014. The US prohibits the launch of any new services from airlines registered in countries with category 2 safety ratings.

Cebu Pacific initially had to wait to secure Extended Diversion Time Operations (EDTO) certification of 120min, which is needed to use the most direct and efficient routing for Manila-Honolulu. Cebu Pacific secured the certification in early Apr-2015 and is now waiting for final approval from the US TSA, which has to complete an assessment of Manila Terminal 3 before Cebu Pacific can serve the US.

Cebu Pacific remains optimistic it will be able to launch services to Honolulu by the end of 2015. It is also aiming to launch service from Manila to the US territory of Guam but this shorter route will be operated using Cebu’s A320 fleet.

Hawaii’s Filipino community will be the main target market for the planned Honolulu service. Manila-Honolulu is only currently served non-stop by Philippine Airlines (PAL) with five times weekly A330-300 frequencies. Hawaiian Airlines pulled out of the Manila market in 2013, leaving a potential opening for a second carrier.

But the upgrade to Category 1 has enabled PAL to expand in the Hawaii market ahead of Cebu Pacific. PAL has more than doubled seat capacity to Honolulu over the last year, according to CAPA and OAG data.

Total capacity in the Philippines-Hawaii market is now back to the early 2013 levels (prior to Hawaiian’s withdrawal). Cebu Pacific is banking it can stimulate demand and grow the market by breaking PAL’s monopoly and providing a new low-cost option.

Cebu Pacific expansion in Australia hinges on expanded bilateral

Honolulu is a key route as it will allow Cebu Pacific to diversify its long-haul network, which now relies heavily on the Middle East. Cebu’s only current long-haul route outside the Middle East is Sydney, which it launched in Sep-2015.

Cebu Pacific launched Manila-Sydney with an initial four weekly frequencies and added a fifth weekly frequency in Dec-2015. The increase to five weekly flights, which fully utilises its current allocation in the Philippines-Australia bilateral, was planned when it first announced the Sydney route and began sales in Australia in Jun-2014.

Since launching its long-haul unit in 2013 Cebu Pacific has pushed for an expanded air services agreement between the Philippines and Australia which would provide sufficient traffic rights to support a daily service to Sydney as well as Melbourne. Cebu Pacific is confident a new round of talks between the Philippines and Australia scheduled for 28-Apr-2015 will result in a significant increase in the current cap.

As CAPA has previously outlined, the capacity/frequency limit only applies to Sydney, Melbourne, Brisbane and Perth. All other Australian airports,  including Melbourne alternative airport Avalon, can be served by Filipino carriers without counting towards the cap. But Cebu Pacific is only interested – at least at this point – in serving Melbourne Airport, which also has been lobbying Australian authorities to forge a new air services agreement with the Philippines. The usually liberal Australian authorities have been in turn pushing Philippines officials to allow Australia beyond rights, for use by Australian airlines.

Cebu Pacific already has over 30% of seat capacity in Philippines-Australia market

Cebu Pacific is currently allocated 2,200 of the 6,000 available weekly seats for Filipino carriers while Philippine Airlines (PAL) is allocated the remaining 3,800. Based on the current five weekly flights schedule Cebu Pacific currently has 2,180 weekly seats to Australia as its A330-300s are in 436-seat single class configuration.

PAL also currently serves Sydney with five weekly flights using A330-300s but in 368-seat three-class configuration with economy, premium economy and business. PAL and Cebu Pacific compete in the Manila-Sydney market against Qantas, which operates four weekly flights on the route using A330-300s in 297-seat two-class configuration.

PAL is currently the only carrier operating non-stop flights from Manila to Melbourne, which it serves three times per week with A330-300s. PAL also serves Darwin with three weekly A320 flights that continue on to Brisbane.

PAL launched Darwin in Jun-2013 with seven weekly frequencies – including four that continued to Perth and three to Brisbane. But PAL quickly dropped the Manila-Darwin-Perth service in Sep-2013. PAL currently has about 3,400 weekly one-way seats to Australia compared to the 2,180 for Cebu Pacific and 1,188 for Qantas.

While PAL is currently not fully utilising its allotment for Australia it typically adds capacity during peak periods. For example PAL operated daily flights to Sydney in late 2014 and early 2015. PAL also has used a wide variety of aircraft types in recent years on the Melbourne and Sydney routes, including A340s and 777-300ERs.

Cebu Pacific seeks daily traffic rights for Sydney and Melbourne

Cebu Pacific executives said during the carrier’s 4Q2014 results presentation that it is keen to secure capacity entitlements to support 14 weekly frequencies to Australia. This would enable Cebu Pacific to operate daily flights to both Sydney and Melbourne, resulting in 6,104 weekly one-way seats in the Philippines-Australia market.

Assuming the current level of capacity from PAL and Qantas, total one-way weekly seat capacity in the Philippines-Australia market would increase to about 10,700, which represents nearly a 60% increase over current levels and about a doubling of capacity compared to Aug-2014 (prior to Cebu’s initial entrance). Cebu Pacific would capture a 57% share of capacity under such a scenario – but that assumes no competitive response by PAL, which could increase to capacity to Melbourne as it did when Cebu Pacific started to Sydney.

Cebu Pacific is optimistic such a large surge in capacity can be supported as its low fares stimulate demand and grow the total size of the pie. Cebu Pacific executives point to a 42% increase in total Manila-Sydney traffic from Sep-2014 through Dec-2014, the first four months it was competing in the market. The growth in the Sydney market “convinces us that this is a market worth investing over time,” Cebu Pacific CEO Advisor Garry Kingshott said during the carrier’s 4Q2014 results presentation in late Mar-2014.

Under the previous PAL-Qantas duopoly the market would have never grown at such a fast rate but the entrance of an LCC competitor has succeeded in driving down fares and stimulating new demand. Australian airports experienced similar growth in other Southeast Asian markets as other long-haul LCCs entered, including Scoot in the Sydney-Singapore market and AirAsia X in the Melbourne-Kuala Lumpur and Melbourne-Sydney markets.

Cebu Pacific sees an even bigger potential opportunity to stimulate demand in Melbourne because Manila-Melbourne is currently only served by one carrier rather than two. Both Sydney and Melbourne have large Filipino communities, making both markets attractive to Cebu’s long-haul division. Cebu Pacific’s long-haul business plan mainly targets ethnic and expatriate or labour traffic although in the Australia market it also expects a growing segment of inbound leisure traffic as the Philippines emerges as a popular alternative tourist destination for Australians.

Maintaining year-round daily flights to Sydney and Melbourne will be challenging

Cebu Pacific’s aspirations for two daily flights to Australia, however, could prove overly ambitious. The Philippines-Australia market is extremely seasonal and at least for the short to medium term is unlikely to support such a large amount of capacity (over 10,000 weekly one-way seats) except during the peak periods.

Most Filipino expatriates as well as students return home during holiday periods due to their work or study schedules. It will be hard to stimulate sufficient demand from Australia’s Filipino community to fill up a 436-seat aircraft daily from Sydney or Melbourne on a year-round basis.

Cebu Pacific should be able attract some Australian outbound holiday traffic as well as connection traffic beyond Manila to destinations such as Hong Kong, South Korea and Japan – by offering significantly cheaper fares than the non-stop providers. But demand from such sectors also varies significantly depending on the time of the year. And competition in the one-stop Australia-North Asia market is extremely intense.

Even with the current Australia schedule of five weekly flights Cebu Pacific has been struggling during off peak and shoulder months. For example after a strong January Cebu Pacific saw a decline in its Manila-Sydney load factor in February, which is typically a relatively weak month for the Australian market as it falls between the southern summer holiday period and Easter.

Cebu Pacific temporarily cuts capacity to Sydney

Cebu Pacific seems concerned it could see similar drops during other off-peak periods as it has cut one weekly frequency from its Manila-Sydney schedule for Jun-2015, Aug-2015 and Sep-2015. Cebu Pacific will only operate four weekly flights during these three months but plans to operate the normal five weekly flights in Jul-2015 as well as in Oct-2015, Nov-2015 and Dec-2015, according to its online booking engine.

The temporary reductions to Sydney are sensible but are an indication of the challenges in maintaining a frequent service on a year-round basis.

Cebu Pacific obviously is keen to secure enough traffic rights for daily to Sydney and Melbourne, as this would give it the flexibility to gradually expand in the Australia market if market conditions warrant. But Cebu Pacific could end up with a schedule that only offers daily – or close to daily – services in both Australian markets during the peak periods.

Cebu Pacific continues to expand A330 short-haul flying

Quickly expanding to 14 weekly flights to Australia would also not be in line with Cebu’s generally conservative approach to expansion. Cebu Pacific has slowly expanded its long-haul operation since taking its first A330 two years ago and instead has been using a portion of its A330 fleet to operate short-haul routes. The use of the A330 on routes such as Cebu, Davao, Seoul and Singapore have been profitable and significantly reduce the overall risk that comes with launching a long-haul widebody operation.

Cebu Pacific is keen to add capacity to both Australia and the UAE, where it is also seeking more traffic rights which would support the potential launch of services to Sharjah. But such expansion would require that the A330 be removed from some profitable short-haul routes.

Cebu Pacific currently uses the A330 to operate three short-haul routes including 17 weekly flights on Manila-Davao, four weekly flights on Manila-Cebu and one daily flight on Manila-Singapore (based on OAG schedule data for week commencing 20-Apr-2015). Mr Kingshott said Cebu Pacific has secured approval to up-gauge a second daily Manila-Singapore frequency to the A330 and is also planning to start using the type on some flights to Hong Kong and Taipei.

Cebu Pacific currently operates 25 weekly flights on Manila-Singapore, 28 weekly flights on Manila-Hong Kong and 10 weekly flights on Manila-Taipei. Manila-Singapore is Cebu’s largest international route, slightly ahead of Manila-Hong Kong, as the A330 is already used on seven of the Singapore frequencies.

Manila-Taipei (TPE) and all four of Cebu’s current long-haul routes – Manila to Dubai (DXB), Sydney (SYD), Kuwait (KWI) and Riyadh (RUH) – are also among Cebu’s 10 largest international routes.

Cebu Pacific top 10 international routes ranked by weekly seat capacity: 20-Apr-2015 to 26-Apr-2015

Cebu Pacific to use A330 to add capacity to Hong Kong, Taipei and Tokyo

The use of the A330 on Hong Kong and Taipei is made possible by new air services agreements that significantly increase the total capacity available to Filipino carriers in both markets.

Deploying A330s on some Hong Kong flights is particularly logical given the slot constraints at Hong Kong. Cebu Pacific was previously unable to up-gauge any of its Hong Kong flights to A330s without sacrificing an existing slot because the Philippines-Hong Kong bilateral has seat capacity (rather than frequency) limits. Cebu Pacific has previously only operated a very small number of ad hoc A330 flights to Hong Kong during peak periods.

Cebu Pacific also has been keen to add capacity to Taipei for some time as demand in the Philippines-Taiwan market has been growing rapidly. Following the new bilateral agreement between the Philippines and Taiwan, which was forged in Mar-2015, Cebu Pacific is now free to add frequencies to Taipei. But the market is big enough to support A330s during peak periods.

Cebu Pacific is also planning to again use the A330 on some flights to Tokyo Narita, which it currently serves with one daily flight. Cebu Pacific operated the A330 on some of its Tokyo flights in 2014 during the peak northern summer months. In addition Cebu Pacific previously operated the A330 on some flights between Manila and Seoul, which it currently serves with one daily A320 flight.

Cebu Pacific to boost A330 utilisation rates

Cebu Pacific will continue to take a flexible approach to using the A330 on short-haul route, making several adjustments depending on the time of the year and market conditions. As a result it is unlikely to use the A330 on Cebu, Davao, Hong Kong, Taipei, Tokyo and Singapore all at once. But the A330 deployment plans for the remainder of 2015 show a general increase in the number of short-haul flights even with Cebu Pacific launching a fifth long-haul route, Manila-Doha, in Jun-2015.

Cebu Pacific should be able to achieve this as it is currently only using its A330 fleet an average of 11hrs per aircraft per day. This will increase slightly, to about 11.5hrs, in early Jun-2015, when Cebu launches two weekly flights to Doha but reduces Sydney to four weekly flights.

Cebu Pacific current A330 network and weekly utilisation levels

Route  Apr-2015



block time

per flight

Total weekly

block time

per route

Manila-Dubai-Manila Daily 9:00/8:30 122:30
Manila-Kuwait-Manila 4 times weekly 10:40/9:40 81:20
Manila-Sydney-Manila 5 times weekly 7:50/7:55 78:45
Manila-Riyadh-Manila 3 times weekly 10:30/9:55 61:15
Manila-Davao-Manila 17 times weekly 1:45/1:45 59:30
Manila-Singapore-Manila Daily 3:30 /3:30 49:00
Manila-Cebu-Manila 4 times weekly 1:15/1:15 10:00
TOTALS 47 weekly flights 462:20 = 77hr per aircraft

Higher utilisation rates will reduce unit costs and also enable Cebu Pacific to meet its capacity targets for 2015 without significant fleet expansion. Cebu Pacific is projecting a 15% increase in seat capacity for 2015 and a 30% jump in ASKs.

The ASK increase is driven partially by the full-year effect from Kuwait, Riyadh and Sydney – which were all launched in the latter half of 2014. Even with the relatively low utilisation levels the A330 fleet currently accounts for about one-third of total Cebu Pacific ASKs (but only about 10% of total seats).

Cebu Pacific system-wide weekly ASKs by aircraft type: 20-Apr-2015 to 26-Apr-2015

The Cebu Pacific Group (includes subsidiary Tigerair Philippines) is expanding its A320 family fleet in 2015 by only two aircraft from 32 to 34. Two A319s are exiting in 2015 as part of a recent sale of six aircraft to Allegiant Air while four new A320s are being delivered.

Cebu Pacific also only added two A320 family aircraft in 2H2014. But Cebu Pacific has been able to free up A320s by using its new A330 fleet to take over short-haul flights previously operated by A320s.

Cebu Pacific Group fleet plan: end 2014 to end 2017

As Cebu Pacific expands its long-haul operation, particularly if Melbourne and Sharjah are launched, it will need to relook at expanding its A330 fleet or pulling A330s off short-haul routes. Pursuing the latter is unlikely as the A330s have been profitable on short-haul routes and Cebu Pacific needs this capacity given the relatively limited expansion of its narrowbody fleet.

Cebu Pacific holds off on expanding its A330 fleet beyond six aircraft – for now

Cebu Pacific’s original business plan for the long-haul unit envisioned a total of eight A330s. But Cebu Pacific never committed to the seventh or eighth aircraft, which Cebu Pacific was initially looking to lease from 2015. Instead Cebu Pacific recently decided to stop – at least for now – at six aircraft.

Taking a break from widebody fleet expansion is a sensible approach. Cebu’s long-haul operation has so far been unprofitable, as highlighted in the first part in this series of reports, and there are opportunities to squeeze out more capacity by improving utilisation of the existing six aircraft.

With the current A330 fleet it is hard to imagine the airline operating more than six long-haul routes, which Cebu Pacific will be operating once it launches Honolulu. If Sharjah, Melbourne and other potential new route opportunities become available Cebu Pacific will need to revisit acquiring the two additional widebody aircraft in the original business plan.

For now Cebu Pacific is wisely taking a wait-and-see approach while in the meantime seeking additional traffic rights and working to improve its performance in the Australia and Middle East markets. Now is not the time to rush into acquiring additional widebody aircraft. Meanwhile, the outcome of the Apr-2015 bilateral talks with Australia will be an important factor in that planning.

Source: CAPA,

Philippines, Oman Sign New Air Agreement

LONE CARRIER. Oman Air, the lone carrier serving the Muscat-Manila route, eyes to increase the frequency of its long haul service to the Philippines from 3 times a week to daily. File photo from Oman Air
Oman Air plans to increase flights from Muscat to Manila from 3 flights per week to daily flights.

MANILA, Philippines – The Philippines and Oman have signed a new air agreement that is expected to benefit about 50,000 Filipinos based in Oman, the Civil Aeronautics Board (CAB) reported Wednesday, April 8.

CAB executive director Carmelo Arcilla said in a text message that the new air pact – the second signed by the Philippines this year – increases frequencies between Manila and Muscat to 7 from 3 flights per week.

The agreement, which would benefit an estimated 50,000 Filipinos working and living in Oman, amends the Bilateral Air Service Agreement and Confidential Memorandum of Understanding entered into by the two countries in December 2009.

The new air agreement also covers fifth freedom traffic rights, referring to the right to fly passengers to third countries from a country with an outstanding air services agreement with the airline’s resident country.

Under the new agreement, carriers from the Philippines would be allowed to carry passengers to one point in Europe, one point in India, and one point in the Gulf States.

In exchange, airlines from Oman would be allowed to carry passengers to one point in Malaysia, one point in Indonesia, and one point in Thailand.

Oman Air, designated carrier of the Sultanate of Oman, started its thrice-weekly service between Manila and Muscat on December 2. It is eyeing mounting daily flights to the Philippines to accommodate the growing number of passengers.

National flag carrier Philippine Airlines (PAL) has expressed its intention to fly to Muscat as early as April 2013.

In February, the Philippines signed its first air agreement for 2015 opening up more commercial opportunities for airlines of the Philippines and Singapore through higher seat entitlements and limit on the frequencies as well as additional co-terminal points.

This air pact increased the current capacity entitlements between Manila and Singapore by 7.1% to 18,888 seats per week for each country from the current 17,627 seats per week.

The Aquino administration is pursuing more air talks as part of its open skies policy under Executive Order 29. The administration aims to double tourist arrivals to 10 million by 2016.

In 2014, the Philippines concluded air talks with Ethiopia, South Africa, Macau, Canada, Myanmar, New Zealand, Singapore, and France.


Philippines, Singapore Sign New Air Agreement

THE PHILIPPINES and Singapore on Friday signed an amended air services agreement, increasing weekly seats to 18,888, opening up more commercial opportunities for both countries’ airline industries, the Civil Aeronautics Board (CAB) said on Monday.

 CAB Executive Director Carmelo L. Arcilla said in a text message that the Philippine aviation regulator and its counterpart from Singapore held air talks last Friday, resulting in an expanded air services agreement.

“The Philippines and Singapore signed on Friday a new memorandum of understanding on air services, increasing the current capacity entitlements between Manila and Singapore to 18,888 seats per week from 17,627 for each country,” he added.According to Mr. Arcilla, Iloilo and Bacolod were added as co-terminal points for Singapore carriers, in addition to Cebu, Davao and Puerto Princesa.

This “means that Singaporean carriers can fly to Cebu for example and then proceed to Davao. Both countries also agreed to increase the limit on the frequencies for 5th freedom (rights), to 10 weekly from 8. This means that a Singapore carrier for example can operate a route that starts from Singapore to Manila and proceeds to Osaka, 10 times a week,” he said.

The Philippines and Singapore, Mr. Arcilla said, also agreed on 3rd-country code sharing, allowing airlines “to collaborate with those from third countries in marketing services.”The Philippines said it is set to sign new air service agreements with Oman, Taiwan and Australia in the near term.

The government plans to triple tourist arrivals to 10 million by 2016 from about three million in 2010.

This year, the Philippines, has so far, concluded air talks with Ethiopia, South Africa, Macau, Canada, Myanmar, New Zealand, Singapore and France.

In 2013, the Philippine air panel concluded air negotiations with Macau, Brazil, Israel, Italy and Japan.

Source: Chrisee Jalyssa V. Dela Paz, BusinessWorldOnline

Philippines To Engage 6 Countries In Air Talks


The Philippines is eyeing air talks with as many as six countries in the first half of 2015 to support the growth of the country’s trade and tourism sectors.

According to Civil Aeronautics Board Carmelo Arcilla, the country hopes to engage Australia, Singapore, Russia, Turkey, Taiwan and Qatar in negotiations through the second quarter of 2015.

Following an air panel meeting on Monday, Arcilla said there was still no decision on potentially controversial air talks with the United Arab Emirates, likely to be contested by domestic carriers Philippine Airlines and Cebu Pacific.

He noted that air talks with Singapore would take place on Feb. 12, to be followed by talks with Taiwan in March.

“There is a lot of demand for Singapore, and airlines are fully utilizing our entitlements,” Arcilla said. He noted that Philippine carriers are operating about 17,000 seats a week to Singapore.

“We want to expand opportunities. There is a provision in the agreement that allows stopover rights, meaning Singapore carriers can fly to Cebu and onwards to Davao, for example,” he said, pointing to opportunities brought on by the rise in traffic rights.

In March this year, the country hopes to start negotiations with Australia, which is an expansion target of some domestic carriers, Arcilla said.

There are about about 390,000 Filipinos in Australia, based on 2012 data from the Commission on Filipinos Overseas.

Air talks between the Philippines and Australia were last held in 2013. At the time, both countries failed to reach an agreement due to “outstanding issues,” which included the so-called fifth freedom rights.

Arcilla said air negotiations with Russia, Turkey and Qatar were being planned for the second quarter of the year.

Source: Miguel R. Camus, PDI

Cebu Pacific Seeks Philippine Airlines Unused Seats To Australia

MANILA – The operator of Cebu Pacific wants Philippine Airlines’ (PAL) unused seat entitlements to Australia.

In a filing with the Civil Aeronautics Board (CAB), the Gokongwei-led budget airline requested the re-allocation of 1,300 seat entitlements that PAL has yet to use.

Under the air services agreement between the Philippine and Australia, each side has 6,000 weekly seats. PAL was assigned 3,789 seats a week, while Cebu Pacific got 2,202.

“We requested for a reallocation of unutilized seats so we can add flights for the Australia market,” Cebu Pacific general manager Alex B. Reyes said.

“There is good potential to stimulate more traffic between the Philippines and Australia,” he added.

At present, Cebu Pacific flies between Manila and Sydney, while PAL flies to and from Manila on the one hand, and Melbourne, Sydney, Brisbane and Darwin on the other.

Representatives of PAL were unavailable for comments as this article went online.

The country’s largest budget airline earlier reported a loss of P750.12 million in the July to September period, a reversal of the P538.44 million net income in the same three months of 2013.

Despite the third-quarter loss, Cebu Pacific closed the first nine months with a profit of P664.08 million, but lower than the P2.27 billion the previous year.

Revenue in the third quarter reached P8.86 billion, up 8.8 percent from P8.14 billion in 2013, bringing the nine-month tally to P30.58 billion, higher than P27.87 billion over the same period.

Cebu Pacific has a 51-strong fleet, comprising 10 Airbus A319s, 28 A320s, five A330s and eight ATR-72 500 aircraft. It is one of the most modern aircraft fleets in the world. Between 2014 and 2021, the carrier will take delivery of 11 more brand-new A320s, 30 A321neo’s, and an A330.


Emirates Seeks Aquino’s Mediation for 3rd Dubai-Manila Flight

FOR RECONSIDERATION. Emirates elevates the case to the Office of the President after the Cvil Aeronautics Board denies its petition to further extend its third daily flight for the Manila-Dubai route that expired on January 26. File photo from Emirates

MANILA, Philippines – After the Civil Aeronautics Board (CAB) decided in December to end Emirates’ 3rd daily flight for the Manila-Dubai route, the airline is now seeking President Benigno Aquino III’s intervention on the matter.

The Gulf carrier has elevated the case to the Office of the President (OP) after CAB denied its petition to further extend its 3rd daily flight for the Manila-Dubai route that expired on January 26, Department of Transportation and Communications (DOTC) undersecretary Jose Perpetuo Lotilla said.

“What I understand is that they (Emirates) elevated (the case) to the OP. I’m not sure if CAB received anything,” Lotilla said.

On December 11, CAB slapped a P1.8 million ($40,627.53) fine on Emirates for violating Republic Act No. 776 (also known as the Civil Aeronautics Act of the Philippines) since it was selling tickets for a 3rd daily flight for the Manila-Dubai route until October 2015.

National flag carrier Philippine Airlines (PAL) and budget airline Cebu Pacific strongly opposed the extension for the 3rd daily flight of Emirates for the Manila-Dubai routes, as well as the holding of the air talks between the Philippines and the United Arab Emirates.

Emirates and Etihad Airways have 14 flight entitlements per week while PAL has 14; PAL Express, 7; and Cebu Pacific, 7.

No more extension

Emirates is probably following the administrative procedure by elevating the case to Malacañang instead of filing an appeal before the Court of Appeals (CA), Lotilla explained.

On October 7, 2014, President Aquino attended the one-off commercial flight by Emirates using the world’s largest passenger aircraft – Airbus A380 – that landed at the now fully-operational Ninoy Aquino International Airport terminal 3 (NAIA3).

Also in that same month that CAB turned down Emirates’ petition to use the unutilized frequency of Philippine Airlines until March 2015.

As the appeal was pending, CAB granted Emirates a 30-day extension to continue its 3rd daily flight between Manila and Dubai until November 26.

The regulator granted a second 30-day extension allowing Emirates to mount 3 daily flights in the route until December 26.

Until January 26 this year was the 3rd and “final” extension for the 3rd daily flight of Emirates for the contested route so as not to inconvenience overseas Filipinos workers (OFWs) in the Middle East going home for the Christmas and New Year holidays.

Seeking reconsideration

CAB turned down Emirates petition for another 30-day extension, and the airline asked for a reconsideration.

“We encourage the CAB to reconsider their decision, and allow the resumption of Emirates’ 3rd daily flight at the earliest opportunity. We firmly believe that this exceptionally strong and growing route actually requires more, not less flights,” Emirates said in statement released in January.

Filipinos, particularly those living and working in the Middle East, would be affected by the decision of the regulator ending its 3rd daily flight between Manila and Dubai, Emirates warned in a statement.

Emirates, which has been flying between Manila and Dubai since 1990, argued that the route they are serving has a very high seat factor average of 80% from December 2013 to March 2014.

The airline is also employing at least 4,300 Filipinos based in either Manila or Dubai.


UAE Eyes New Air Talks With Philippines

The Philippine aviation regulator’s decision to penalize Emirates for illegally selling seats in the key Manila to Dubai route may be a short-lived victory for domestic carriers Philippine Airlines (PAL) and Cebu Pacific as new air talks with the United Arab Emirates are being eyed.

Both PAL and Cebu Pacific were able to get the Civil Aeronautics Board to order Emirates, one of the world’s biggest air carriers, to stop selling one of three daily Manila to Dubai flights beyond the Dec. 26 deadline given by the government, CAB executive director Carmelo Arcilla said late Thursday.

Arcilla said those illegally sold tickets could be refunded by Emirates or the carrier can rebook passengers on its two remaining daily Manila-Dubai flights after Dec. 26 or endorse these to other carriers.

The CAB also fined Emirates P1.8 million for violating the rules because it was selling those seats until October next year, Arcilla said.

The move was welcomed by both PAL and Cebu Pacific, which said in a joint statement Friday that the CAB did the right thing in protecting Philippine laws.

But they raised new worries given a potential plan by the United Arab Emirates to hold a fresh round of air talks with their Philippine counterparts as early as January 2015.

The air talks, last held between both jurisdictions in 2012, would likely result in increased seats between both the UAE and the Philippines, in particular Manila’s busy Ninoy Aquino International Airport.

More seats would only restore Emirates third daily flight, which domestic carriers originally argued the Gulf carrier should stop using because a PAL-Emirates codeshare deal expired a few months ago.

Emirates has so far been operating the third daily flight because of two 30-day extensions given by the government, the latest of which ends Dec. 26.

“We reiterate our appeal against holding a new round of bilateral air negotiations with the [UAE] in the near future,” PAL and Cebu Pacific said in their statement Friday.

“Air talks with the UAE are not a priority at this time, given the significant increase in capacity over the past year and it may only legitimize Emirates’ third daily frequency, which renders useless the very CAB decision penalizing Emirates precisely for not respecting Philippine laws,” they added.

They also come amid plans by PAL and Cebu Pacific, which also serve the Manila to Dubai route, to expand in the Middle East, a crucial market for Filipinos working overseas.

Arcilla said in a text message that the Philippine Air Panel discussed the proposal of the UAE for another round of air negotiations last Dec. 11 but “it did not finish the deliberation.” He said they would meet again on Dec. 19.

Source: Miguel R. Camus, Philippine Daily Inquirer