MANILA, Philippines - Cebu Air Inc., operator of Cebu Pacific, has applied for additional seat entitlements for flights bound to South Korea, an official said last week.
“We asked for almost 4,000 seats, following the successful air talks held by the air panels of South Korea and the Philippines early this month,” said the airline’s vice president for marketing and distribution Candice Iyog in an interview.
At present, the budget carrier operates the Manila-Incheon route twice daily; daily flights for Cebu-Incheon, four weekly flights for Manila-Busan route and another four-weekly flight for Cebu-Busan route. “The total flights for our South Korea destinations are 29 times weekly,” added Iyog.
The airline official said the additional seats are equivalent to 21 flights a week or an additional three daily flights.
Early this month, the Philippines and South Korea agreed to amend their existing air pact by expanding the number of entitlements of designated carriers of each country by half or an additional 9,500-weekly seats.
From 19,000 weekly seat entitlements being utilized by carriers on both sides this was increased by half for a total of 28,500 seats per week for each country, said Civil Aeronautics Board (CAB) Executive Director Carmelo Arcilla.
“Now both sides can mount as much as 28,500 seats per week. These seats can be used at any points in the country and the CAB will allot [these] depending on the requirement of an airline who files an application with us because we are the sole authority that grants entitlements,” said Arcilla.
The CAB is part of the Philippine air panel which negotiates for traffic rights with other countries. The other panel members include the departments of Transportation and Communications, Foreign Affairs, Tourism and Trade and Industry, as well as representatives from airline companies.
“Tourists from South Korea are our biggest market. Last year, we had about 925,000 Korean arrivals in the country and we see that increasing to 1 million this year,” he said.
The airline’s net income last year dropped by 47.6 percent to P3.62 billion mainly due to an increase in operating expenses brought about by higher fuel costs.
Expenses in 2011 grew by 34.3 percent to P30.40 billion from P22.63 billion in 2010. Fuel costs, which make up 50 percent of its opex, ballooned by 55.2 percent to P15.22 billion from P9.80 a year ago.
Revenues grew by 16.7 percent to P33.93 billion brought about by improving growth in passenger traffic. Still, its core profit last year declined by 41 percent to P3.36 billion, with rising jet fuel partly to be blamed