Budget carriers helped boost domestic travel by 96%


Posted at Apr 25 2012 05:26 PM | Updated as of Apr 26 2012 02:21 AM

MANILA, Philippines - Low-cost carriers (LCCs) have helped boost domestic air travel growth in the Philippines, according to a Cebu Pacific Air (CEB) official.

"Philippine LCCs contributed about 96% of total domestic air travel market growth from 2006 to 2011. Full-service carriers on the other hand contributed 4% growth in that six-year period," said CEB VP for Marketing and Distribution Candice Iyog, in a statement.

Iyog said the growth was mainly because of the low fares offered by budget carriers such as CEB.

"By unbundling services such as baggage and meals, customers are given the choice to buy only the services they want to pay for. Full service or legacy carriers continue to bundle all their services into the fare, something new air travellers have rejected. Cebu Pacific continues to remain focused on stimulating travel demand in the Philippines. We’ve seen this in every market we operate and call this the Cebu Pacific effect," she said.

Average airline fares are now 30% less than 10 years ago, despite the high cost of fuel. This was attributed to low-cost carriers, whose promo fares and seat sales make flying more affordable.

In 2006, only 1 out of every 2 domestic passengers used low-cost carriers. But in 2011, budget airlines cornered a 76% share of the domestic market or 3 out 4 domestic passengers flying on low-cost carriers.

"CEB continues to work closely with private stakeholders and key government offices to ensure continued airline growth for the benefit of its passengers and the economy. Despite this phenomenal contribution of LCCs to inbound and domestic tourism, the industry continues to face hurdles such as safety concerns and infrastructure limitations, among others," she said.

The CEB official noted that many airports in the country are ill-equipped for night landing, while those who do allow night landing do not extend their operating hours. This is why airlines operate domestic flights during the day, which lead to air traffic congestion or cancelled flights.

"CEB is already planning for an even wider route network in 2013 with long-haul flights, and an estimated passenger growth outlook at 10-15% per year. We expect delivery of 56 brand-new Airbus A320 A321neo and A330 aircraft until 2021, so we can offer more route, flight and destination choices to our passengers,” she said.

Earlier, CEB announced it is planning to launch long-haul flights by the third quarter of 2013, with an eye on routes to cities where there are significant Filipino communities.  Possible routes include Hawaii, Moscow, Australia, India and parts of the Middle East.