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


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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, Interaksyon.com

Making Low Cost, Long Haul Flights Work: Migrant Class


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LOW-COST long-haul flying has been a notoriously difficult nut to crack ever since Laker Airways, a transatlantic British airline, introduced the concept in 1977. It went bust five years later. Numerous other carriers have since come and gone, but none has managed to combine bargain airfares with long-haul intercontinental flights and survive. Michael O’Leary, the boss of Ryanair, Europe’s largest low-cost carrier, continues to whet appetites with promises of €10 ($14) flights to North America. But bombastic claims are nothing new for Mr O’Leary, who privately admits that the cost of aircraft and high fuel prices mean it is not currently practical.

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Air Asia X of Malaysia

Interesting, then, that Asian airlines are having rather more success in the field, albeit with some false starts. In 2009 AirAsia X, the long-haul subsidiary of AirAsia, a Malaysian carrier, began offering £99 ($168) fares from Kuala Lumpur to London. On the day of the inaugural flight, Brent crude oil was trading at $45 per barrel. Three years later, when the route was abandoned, it stood at $125. Today a barrel of the black stuff sets you back $112. Given that fuel typically accounts for about a third of an airline’s costs, flying a widebody plane for 13 hours on the cheap is a decidedly challenging proposition.

Yet AirAsia X lives on. The airline today operates intercontinental routes from Kuala Lumpur to Jeddah, Saudi Arabia and several points in Australia. Tony Fernandes, its chief executive, says London flights will eventually return, though not on the same fuel-guzzling four-engine Airbus A340s. “We had the wrong aircraft,” he admitted last year. Orders for 37 new A330s and 10 next-generation A350s—both twin-engine aircraft—should improve his chances next time. Mr Fernandes will also be able to choose from multiple points of origin, with AirAsia X subsidiaries launching in Bangkok, Thailand and Bali, Indonesia.

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Cebu Pacific Air of the Philippines

Two other Asian low-cost carriers are exploring the model: Cebu Pacific of the Philippines, and Singapore Airlines’ subsidiary Scoot. Cebu Pacific received its first widebody A330 last summer, and now deploys four of the jets on regional flights plus one long-haul route to Dubai. In September, Kuwait and Sydney will join the network. Unlike AirAsia X, which offers a business-class cabin to entice some premium passengers, Cebu Pacific positions itself as radically low-cost. Its all-economy A330s are crammed with 436 seats (by way of comparison, Etihad seats 231 people on the same aircraft). As well as doing away with frivolities like legroom, baggage and food, Cebu Pacific makes little effort to facilitate onward journeys with partners. “We find that our passengers have learned how to self-connect,” Lance Gokongwei, its chief executive, says. If that means adding several hours to an already lengthy journey, then so be it.

Scoot of Singapore
Scoot of Singapore

This works for Cebu Pacific because the majority of its customers are migrant workers—one in ten Filipinos live abroad—who shoulder the burden stoically. For them, cost is the most critical factor when booking a flight. Hence Mr Gokongwei’s reluctance to sign interline or codeshare deals with local carriers. Although this would make travelling more bearable, it would also undermine the no-frills model by restricting flight times and layering on costs.

Norwegian Air Shuttle
Norwegian Air Shuttle

Would this model work in Europe or America? When AirAsia X pulled out of London in 2012, it blamed taxes for the failure. That was nonsense. Fuel prices alone sounded the death knell, and would probably do so again today even with A330s. There are only three ways for an airline to beat high fuel costs. One is to boost revenue by adding sizeable business-class cabins (at which point your low-cost credentials go out the window); another is to boost revenue by cramming in passengers like sardines (which Filipino workers will tolerate, but others may not); the last is to buy ultra-fuel-efficient planes that reduce your operating costs. Norwegian Air Shuttle hopes to do the latter with its Boeing 787 Dreamliner flights from London to New York. But because modern jets cost the most to lease, the fares are hardly rock bottom. Return flights start at £360—a far cry from Mr O’Leary’s €10 tickets. If Europeans and Americans want genuinely low-cost long-haul flights any time soon, they will have to look to the Philippine model. Many might think that too high a price to pay.

Source: MR, The Economist

SAS Introduce Brand New Long Haul Interiors


These are great plane seats! Hoping that local (Philippine carriers) airlines will invest in seats like these.

TheDesignAir

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SAS, excitingly, have announced a brand new cabin concept for their long haul aircraft. Featuring business class, premium economy and economy classes, the new cabin and seat designs leap the airline into 2014 with a loud bang. Competing against carriers such as Finnair who have already pushed their airline forward with new designed cabins, SAS haven’t fallen behind, showcasing they know exactly what customers want.

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Being launched in early 2015, the retrofitted A330 and A340 fleet will offer state of the art business class seats and renovated premium economy (SAS Plus) and economy (SAS go) cabins. We are great fans of the new cabin designs. The designers have gone for a mix of business elegance with contemporary cool, the results are sophisticated, warm and welcoming, and there is a hint of Winkreative’s Swiss interior designs which we are also huge fans of.

The business class cabin, featuring Thomson Vantage XL seats…

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