|Cebu Pacific president Lance Gokongwei announced the budget carrier will launch long-haul flights in the third quarter of 2013, during a press conference in Ortigas on January 31, 2012. Photo by Fernando Sepe Jr. for ABS-CBNnews.com
MANILA, Philippines (UPDATE) - Budget carrier Cebu Pacific is set to launch long-haul flights by the third quarter of 2013, with an eye on routes to cities where there are significant Filipino communities.
Cebu Pacific officials assured it will continue to offer its trademark low fares for long-haul routes, which could possibly include Hawaii, Moscow, Australia, India and parts of the Middle East.
Lance Gokongwei, Cebu Air Inc. president, said the airline is targeting flights to cities where there are large Filipino communities but are currently underserved. He noted many overseas Filipino workers (OFWs) have to make multiple stops and connecting flights en route to the Philippines, not to mention the high costs and lack of seats available on direct flights.
"We are highly confident in our ability to succeed in this endeavor, considering there is a huge underserved market. There are 11 million OFWs who want to see their families. With lower fares and more direct access, the markets will grow," he said, in a press conference in Ortigas on Tuesday.
Gokongwei declined to reveal the cities being eyed by Cebu Pacific for these long-haul flights, pending the filing of applications for appropriate permits. When pressed for details, he admitted Hawaii is a potential route, but ruled out direct flights to the US West Coast, which is currently served by rival Philippine Airlines (PAL).
Low fares, new planes
Alex Reyes, Cebu Air vice-president for commercial and network planning, said the airline is continuing the budget revolution by offering its trademark low fares to these new destinations.
Reyes noted the average fares for a one-way long-haul flight are currently at $510, and Cebu Pacific is hoping to offer 30% cheaper fares at $330.
"Beginning 2013, we will start flying long-haul... Our primary beneficiaries are OFWs, who can come home more often with the lower rates," Reyes said.
Cebu Pacific will lease up to 8 Airbus A330-300 aircraft to serve new markets. The A330-300 planes have a range of up to 11 hours, which means the airline can embark on long-haul flights that are within 11 hours of the Philippines.
"The A330-300 will give us the lowest cost per seat, allowing us to drive long-haul fares 35% lower than those currently offered by other airlines and as much as 80% lower when CEB offers promo fares," Gokongwei said.
|Cebu Pacific president Lance Gokongwei is seen in a playful mood before a press conference in Ortigas, January 31, 2012. Photo by Fernando Sepe Jr. for ABS-CBNnews.com
However, a potential stumbling block to Cebu Pacific's plan is the current Category 2 status of the Philippines' Civil Aviation Authority of the Philippines (CAAP).
The U.S. Federal Aviation Administration (FAA) downgraded CAAP to Category 2 in 2007 due to noncompliance with International Civil Aviation Organization safety standards. This has prevented Philippine carriers from mounting additional flights to the U.S. There is also an existing ban on Philippine carriers in the European Union.
However, Gokongwei is confident the ban would be lifted and Cebu Pacific will get the necessary approvals.
"We are very confident that the ban would be lifted," Gokongwei said, adding that there are many other routes it can fly to, outside of the U.S. and Europe.
Cebu Air, which operates the country's largest budget airline, Cebu Pacific, is a unit of JG Summit Holdings Inc.
Cebu Pacific last week announced it was launching Manila flights to Siem Reap, Cambodia. It currently has 34 domestic destinations and 19 international destinations.
Cebu Pacific flies to Hong Kong, Macau, Singapore, Bangkok, Kuala Lumpur, Kota Kinabalu, Osaka, Taipei, Brunei, Beijing, Guangzhou, Shanghai, Xiamen, Hanoi, Ho Chi Minh, Jakarta, Incheon and Busan.