Cebu Pacific enters long-haul market with Dubai flights

by Kathleen A. Martin

Posted at Jan 17 2013 04:16 PM | Updated as of Jan 18 2013 02:37 AM

MANILA, Philippines - Filipinos living and working in the Middle East can now go home to their families more frequently as budget carrier Cebu Pacific will start flying daily to Dubai come October.

"Current flights [between Manila and Dubai] cost an average of P21,320 for a one way fare. Our take: P12,859 including base fare, fuel surcharges, and add-ons such as meals," Alex Reyes, general manager for long haul division at Cebu Pacific, said during a briefing on Thursday.

"That's equivalent to 40% in savings... and there's no cheaper way to get to Dubai," he stressed.

The Gokongwei-led airline on Thursday unveiled its first long-haul flight and its 21st international destination: daily services between Manila and Dubai.

"The strategy of Cebu Pacific is primarily to serve the Filipino people and offer low fares," Lance Y. Gokongwei, president and chief executive officer at the airline, said in the same briefing.

"The necessary factor [in choosing our next destination] is the concentration of Filipinos [in that area]," Gokongwei continued.

About 700,000 Filipinos are currently working in Dubai and the rest of the United Arab Emirates, Reyes said.

But despite the large chunk of Filipinos in the area, no Filipino carrier flies to Dubai or even to any destination in the Middle East.

Reyes noted, "OFWs (overseas Filipino workers) would only go home every two years or every year because it's very expensive."

"We will open up more destinations in the Middle East and we expect to help the overseas filipinos. They are the primary beneficiaries ... so they will be able to come home more often," Reyes said.

Cebu Pacific will begin its daily flights to Dubai on Oct. 7, 2013. The route is also seen as a primary gateway to other parts of the Middle East such as Saudi Arabia and Qatar, where millions more Filipinos currently work.

The direct flight will last for eight to nine hours, depending on the season and winds, Reyes said.

The budget carrier is set to get seven additional A320s for its short-haul flights and two A330s, which will be utilized for the Manila-Dubai route.

"We're configuring it (A330) with an all-economy seating. All of the seats will be leather, and we will have hot meals for sale," Reyes said.

"We will also make internet connections available on board and this is a service that will be much appreciated by customers," he added.

The carrier is looking at Saudi Arabia for its next long-haul destination.

Cebu Pacific flew more than 13 million passengers in 2012 from almost 12 million serviced in 2011, but short of its target 14 million.

"Due to some slot limitations, we dampened capacity growth in the last quarter of the year so we will be slightly below our target but we still have significant double-digit growth for revenues and passengers from the last year (2011)," Gokongwei said.

He added the airline is expected to continue seeing growth in revenues this year amid a bustling Philippine economy.

"I think the local airline industry is enjoying quite good demand growth driven by growth in Philippine economy," Gokongwei said.

"Part of it is the Department of Tourism's successful campaigns although there continue to be challenges in the industry. To name a few, the increasing competition and still relatively high price of routes but we're confident in the trajectory of the entire industry," he continued.

Gokongwei shared that despite Cebu Pacific's already high penetration in the short-haul market for local destinations, there are still opportunities for short-haul international flights.

Moreover, he said the firm is looking at opportunities in increasing the frequencies of current in-demand routes.