Cebu Pacific to go long haul; eyes OFW market

ONE of the Philippines budget airlines, Cebu Pacific Air, will start long haul flights starting the third quarter of next year to serve the growing number of overseas Filipino workers.

“We are going long haul and we are confident that we can duplicate the success that we had in other destinations we have opened before,” said Lance Gokongwei, Cebu Pacific Air president and chief executive officer.

Gokongwei said on Tuesday that the airline would lease eight brand-new A330-300 aircraft—four of which will be operational by the third quarter—and lease orders would be completed by 2016.

“Lease is at $220 million per aircraft (a total of $1.7 billion). The bigger investment will be in the beginning, in developing and marketing the routes,” said Gokongwei.

Alex Reyes, Cebu Pacific Air vice president for commercial and network planning, said that long haul would mean any destination within a maximum of 11 hours travel time from Manila, which has a high concentration  of Filipinos and is an underserved market.

Reyes said they were considering to service cities in Europe, Middle East, Oceania and the United States of America.

“This could include countries like Australia, New Zealand, India, Saudi Arabia, Maldives and even Moscow,” said Reyes.

OFWs

He said that the introduction of the new flights in these regions were targeted at the large population of overseas Filipino workers, whose numbers have already reached 11 million worldwide.

“Based on the data that we gathered, 4 million are in the US, 2.5 to 3 million in the Middle East, and most don’t fly directly. With this, we can stimulate the market and make it easier for our OFWs to go home to their families here,” said Gokongwei.

Gokongwei added that they are looking to offer non-stop direct flights to their long haul destinations with the new expansion.

With their new flights launched before the year ends, Reyes said customers were expected to save 30  percent to 40 percent from the existing average rate of $500 today.

CHALLENGES

The airline officials are also confident of hurdling the challenges, such as the downgrading of Philippine carriers to category 2 by the Federal Aviation Authority (FAA) and the blocklisting of airlines from the Philippines by the European Union.

Gokongwei said that the airline was confident of rolling out its plans next year, and he remained optimistic of the lifting of the FAA downgrading and the EU blocklisting.

“The CAAP (Civil Aviation Authority of the Philippines) is currently doing their best to have the blocklisting lifted. The FAA recently did a technical visit and it went well so we are confident that it will be lifted within the year,” said Gokongwei.

If worse comes to worse and the blocklisting and downgrading will not be lifted within the year, Gokongwei said Cebu Pacific Air could still serve outside the US and Europe.

He said that areas like Riyadh, Jeddah, Dubai, Doha and Abu Dhabi would be potential destinations for the airline.

DUPLICATING SUCCESS

According to Gokongwei, they are confident of duplicating their achievements in other destinations they have served such as Hong Kong, Singapore, Kuala Lumpur and Taipei to their long haul destinations.

He said the airline would use the same principle—provide affordable and quality traveling for their customers.

“In 2005, we opened Hong Kong, Singapore, Kuala Lumpur and Taipei. At present, we are already doing very well in these areas successfully stimulated the market.

“In 2005, Cebu Pacific Air only had 250,000 seats to Hong Kong and none in Singapore, Kuala Lumpur and Taipei. Last year we registered a total of 1.9 billion seats in all these destinations which is a 650 percent increase from when we started in 2005,” said Reyes.