BUDGET carrier Cebu Pacific has affixed its name as the largest Philippine carrier to fly between Manila and Sydney, after slicing 42 percent of the market share on the route in May.
Citing data from Australia’s Bureau of Infrastructure, Transport and Regional Economics (Bitre), Cebu Pacific Long Haul Division General Manager Alex B. Reyes said his airline now leads the Manila-Sydney market after flying over 11,000 passengers in May alone.
From September 2014 to May 2015, Bitre reported a 62-percent year-on-year increase in passenger traffic between Manila and Sydney. During this nine-month period there were 232,876 passengers on the route. Cebu Pacific flew 85,264 passengers, or 37 percent, of the total passenger traffic.
Cargo volume on the Manila-Sydney route also grew by 33 percent during the period, compared to the same period the year prior.
The significant passenger- and cargo-volume growth between Manila and Sydney validates the Cebu Pacific effect. Cebu Pacific’s low fares continue to drive trade and tourism between our countries. We look forward to offering the most affordable fares to even more destinations in Australia in the coming months, Reyes said.
The carrier began operating four times weekly nonstop flights to Sydney in September 2014, and added a fifth frequency three months later. The airline is the only low-cost carrier operating the route.
In an analysis, the Centre for Asia-Pacific Aviation (Capa) said Cebu Pacific will finally see its long-haul business’s bottom line swing to a gain by year-end-roughly two years after it started its operations in 2013-given its aggressive stance in expanding routes, while successfully maintaining its foothold in Middle Eastern destinations that proved to be profitable over the past few quarters. Cebu Pacific operates five long-haul services: Four in the Middle East and one in Sydney, Australia.
Capa said the general plan for the carrier’s expansion involves its move 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.
Both Sydney and Melbourne have large Filipino communities, making both markets attractive to the carrier’s long-haul division.
Cebu Pacific’s long-haul business plan mainly targets ethnic and expatriate or labor 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.
But maintaining year-round daily flights to two cities in Australia would prove to be challenging to the budget airline, the think tank said.
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, Capa said. 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.
The low-cost carrier, the think tank noted, should be able to 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, the research agency said.
The Gokongwei-led airline company operates an extensive route network, serving 57 domestic routes and 37 international routes with a total of 2,652 scheduled weekly flights. It operates from seven hubs, including the Ninoy Aquino International Airport (Naia) Terminal 3 and Terminal 4; Mactan-Cebu International Airport; Diosdado Macapagal International Airport in Clark, Pampanga; Davao International Airport; Iloilo International Airport; and Kalibo International Airport in Aklan.
Cebu Pacific has a 55-strong fleet, composed of 10 Airbus A319, 31 Airbus A320, six Airbus A330 and eight ATR 72-500 aircraft.