Cebu Pacific Mulls Purchase of Bigger Aircraft For Long-Haul Flights


MANILA – The operator of Cebu Pacific is mulling over the acquisition of bigger aircraft for the expansion of its long-haul opyear.ions.

During its stockholders meeting on Thursday, Cebu Air Inc (CEB) president Lance Y. Gokongwei told reporters that the company is in “constant contact with all aircraft manufacturers” — such as Airbus, Boeing and Bombardier — for the purchase of new aircraft.

“I think the market is going towards larger planes because slots are limited. We have to make maximum use of limited slots,” Gokongwei said, referring to the limited slots at the Ninoy Aquino International Airport (NAIA).

According to the Department of Transportation and Communications, the NAIA’s runway can accommodate an hourly average of 36 events, defined as either takeoffs or landings. Aircraft movements — either takeoffs or landings — at NAIA went up to 255,000 in 2011 compared with 171,000 in 2006.

Data from the Department of Tourism show that the fleet of commercial airlines doubled to 119 in May last year from only 62 in 2008. These aircraft serviced 30 million passengers last year, up from 18 million in 2006.

The number of Cebu Pacific’s aircraft increased to 51 as of March — including 3 brand new Airbus A330 aircraft — from 43 last year.

Cebu Pacific’s plan to acquire bigger aircraft is in line with its strategy to operate long-haul flights, such as to Europe and the US.

“We’re constantly evaluating our complete plan. So clearly if we’re to do Europe and west coast in the United States then we need a new aircraft. At this time we’re still on our feasibility study,” Gokongwei said.

He said the company also is looking at increasing its flight entitlements to Hong Kong, Indonesia, Australia and Taiwan.

“We’ve actually asked CAB as well to prioritize those countries, Hong Kong as well as Australia. We feel that there’s really a lot of potential for the tourism growth from those countries, especially Hong Kong and Australia,” Gokongwei said, referring to the Civil Aeronautics Board.

Cebu Pacific has 15,000 seats for Hong Kong.

“We’d like to see some substantial increase in the Hong Kong entitlements. There hasn’t been a capacity increase in like 6 years between Manila and Hong Kong. So we’d like to see a substantial increase,” Gokongwei said.

In the first quarter, CEB reported a net income of P164.164 million, 85.8 percent lower than the P1.157 billion in the same three months of last year.

Revenues of P11.76 billion were 11.6 percent higher than the P10.54 billion in 2013. Passenger revenues amounted to P8.85 billion, up 8.3 percent from P8.17 billion last year.

 Source: Darwin Amolejar,

Cebu Pacific Studying Europe, US West Coast Destinations


BUDGET CARRIER Cebu Pacific Air said it is considering potential new destinations in Europe and the West Coast of the United States and evaluating new aircraft capable of servicing those routes.

“At this time, we’re still in the feasibility study stage. We’re getting basic data from all aircraft manufacturers to assess whether there’s a business case to fly in EU (European Union) and West Coast United States,” according to Lance Y. Gokongwei, president and chief executive officer of the carrier’s parent Cebu Air, Inc.Speaking on the sidelines of the company’s annual shareholder meeting in Pasig City late Thursday, Mr. Gokongwei said: “We’re constantly evaluating our fleet plans, so if we were to do EU (European Union) and West Coast United States, we need a new aircraft.”

Mr. Gokongwei added that the carrier is constantly evaluating its fleet plans and talking with all manufacturers including Airbus and Boeing, saying “if we were to fly there, we will need a new aircraft.”

Cebu Pacific Air currently has 50 aircraft, and is has pending orders for 11 Airbus A320 single-aisle aircraft, plus 30 slightly larger A321 models under the new engine option (NEO) plan, as well as two twin-aisle A330s for operating lease. It is due to end its leases on eight A320s amid a move to the more-efficient A321 NEO.

This year, the carrier will take delivery of five Airbus A320s and three A330s and will return four leased A320s.

Cebu Pacific has increased seat capacity in markets such as Malaysia, Singapore, China and Japan.

“I think the market is going towards a larger fleet. Slots are limited so we went from A320 to A321,” Mr. Gokongwei explained. The A320 has 150-180 seats while the A321 has 185-220.

Asked if it is seeking more seat entitlements to other destinations, Cebu Air, Inc. General Manager Alejandro B. Reyes said that the company has requested the Civil Aeronautics Board (CAB) to prioritize air talks with Indonesia, Hong Kong, Taiwan and Australia.

“We feel that there’s really a lot of potential in those countries, especially in Hong Kong and Australia,” Mr. Reyes said.

“Currently Hong Kong has 15,000 seats available for Philippine carriers, so we’d like to see a substantial increase. There hasn’t been a capacity increase in about six years between the two,” Mr. Reyes said.

CAB Executive Director Carmelo L. Arcilla told BusinessWorld early this month that it is targeting air talks with Indonesia, Hong Kong and Taiwan in the second semester of the year.

This year, the Philippines has so far concluded successful air talks with Canada, Myanmar, New Zealand, Singapore and France. The country will hold air service talks with South Africa on July 9-10.

Dubai, Australia and Kuwait are currently Cebu Pacific’s long-haul destinations. Its foreign operations are largely focused on East Asian markets.

As part of a strategic alliance, Cebu Air, Inc. agreed in February to acquire 100% of Tigerair Philippines, including a 40% stake of Tiger Airways Holdings Ltd.

Cebu Air, Inc. closed at ₱56.55 on Friday, down 45 centavos or 0.79% from June 26’s ₱57.

Source:  Chrisee Jalyssa V. Dela Paz, BusinessWorld Online

Cebu Pacific Mulls Fleet Expansion

5J flies to Kuwait (September 2) and Sydney (September 9).
Will Cebu Pacific order Boeing 777-300 for US/EU flights?

LIMITED slots at the Ninoy Aquino International Airport (Naia) have prompted Cebu Pacific to consider shifting its flight operations using larger planes.

The plan to acquire aircraft with larger capacity came on the heels of the budget carrier’s expansion of its long-haul routes.

Cebu Pacific President and CEO Lance Y. Gokongwei said his airline will be conducting a feasibility study to review the firm’s 50-strong fleet.

“We’re constantly evaluating our fleet plan. At this time, we’re still on our feasibility study. We’re getting basic data from manufacturers and are evaluating the business case,” he said in a chance interview.

“I think the market is going towards larger planes, because the slots are limited. We are still studying if we could shift from using Airbus A320s to A321. We have to make maximum use of limited slots.”

Airbus 321
Airbus 321

Airbus A320 has an average passenger seating capacity of 180 seats, and Cebu Pacific is planning to configure brand-new A321neo fleet with 220 seats in a single-class layout.

The businessman said that his firm is planning to expand its operations to Europe and the United States, pending the acquisition of bigger aircraft that could handle larger volumes of passengers.

“We are in constant contact with all manufacturers such as Airbus, Boeing and even smaller industry players,” Gokongwei noted.

In April the Federal Aviation Administration upgraded the Civil Aviation Authority of the Philippines to Category 1 status, allowing airlines from the Philippines to expand and mount additional flights to the United States. It has been downgraded to Category 2 since 2008 because it did not fully satisfied international safety standards.

In the same month, the European Union has also lifted the ban on Cebu Pacific, allowing the budget carrier to soar to the 28-state members. The Union has blacklisted Philippine carriers since it contested the safety concerns, which include low salaries of highly technical personnel.

The firm is set to increase its capacity to service customers as it is scheduled to receive its third Airbus A330 aircraft in August, bringing the carrier’s wide-body aircraft to five. These are mostly used for its long-haul operations.

The firm currently operates 50 aircraft, and between 2014 and 2021, the airline will take delivery of 11 more brand-new Airbus A320, 30 A321neo and two A330 aircraft.

Aside from better aircraft, the Gokongwei-led carrier has also vied for increased seat entitlements in Hong Kong and Australia flights as it is also asking prioritization to Civil Aeronautics Board, said Cebu Pacific General Manager of Long Haul Division Alex B. Reyes.

“We would like to see some substantial increase in the Hong Kong entitlements. There hasn’t been a capacity increase in like six years, Manila and Hong Kong. So we would like to see a substantial increase,” he added.

Cebu Pacific currently operates over 2,200 flights per week with 50 planes flying to 24 international and 33 Philippine cities.

The airline’s hubs are in Metro Manila, Cebu and Clark in Pampanga.

Source: Brenda C. Grifon