Some low-cost airlines in PH may close, says analyst

[rollyic]

Some low-cost airlines in PH may close, says analyst


MANILA, Philippines – A Sydney-based airline analysis company said Cebu Pacific is the only profitable low-cost carrier operation in the Philippines and that one or more of the other four could close this year.

Center for Aviation, known as CAPA, said the PAL group will also probably survive.

That would leave SEAIR, which is allied with Singapore's Tiger Airways, Malaysia's Air Asia and Zest Air possibly on the chopping block.

CAPA said there are too many planes, forcing the airlines to cut prices too deeply.

CAPA said that while the PAL group, which is refleeting after a $500 million takeover by San Miguel would probably survive, its outlook is bleak because of a long-haul operation that's hampered by being banned from the US and Europe.

CAPA said that while PAL is hoping the Philippines gets a Category 1 rating from the US Federal Aviation Authority this year allowing Philippine carriers to fly there it could take longer than that. -- ANC


http://www.abs-cbnnews.com/business/...e-says-analyst


akala ko ba 2013 will be a good year for the Philippines?

[vinj]

I guess that's the case. There is a market for low-cost but you still have to obtain the volume and other regular fare add-ons to keep you moving. Cebu Pac has the volume and business model in place while PAL has the capital to keep it going at this point.

[Ry_Tower]

Or theymay merge to consolidate operation. Or in case of seair, they can have niche operations.

[vinj]

Or theymay merge to consolidate operation. Or in case of seair, they can have niche operations.

Which is the case in the banking industry. Mergers are seen to continue to trim off the excess fat (although this will pose SBL problems for conglomerates).

[Retz]

may airphil naman ang pal.

[uls]

I guess that's the case. There is a market for low-cost but you still have to obtain the volume and other regular fare add-ons to keep you moving. Cebu Pac has the volume and business model in place while PAL has the capital to keep it going at this point.

guess there aren't enough SCs to keep all those budget airlines profitable

the country needs more SCs

[vinj]

guess there aren't enough SCs to keep all those budget airlines profitable

the country needs more SCs

I think that's the problem... Pag budget/piso fare lang kasi bumibili sila SC so walang kita rin si budget airline.

One thing the budget fares did though was to promote local tourism. Before it was hard for the regular working class pinoy to go to Boracay, Davao, Palawan, Cebu, Bohol but now, they can because of the affordable air fares.

Seriously, if we want to push the airline industry, it's really tourism on a big scale (international visitors) and encouraging business. Is our government doing that? Maybe on a national level, yes but once it gets down to doing the leg work with the LGU and whatever regulating body... all the red tape, corruption and ineptitude continues to eat things up.

[fourtheboys96]

I think that's the problem... Pag budget/piso fare lang kasi bumibili sila SC so walang kita rin si budget airline.

One thing the budget fares did though was to promote local tourism. Before it was hard for the regular working class pinoy to go to Boracay, Davao, Palawan, Cebu, Bohol but now, they can because of the affordable air fares.

Seriously, if we want to push the airline industry, it's really tourism on a big scale (international visitors) and encouraging business. Is our government doing that? Maybe on a national level, yes but once it gets down to doing the leg work with the LGU and whatever regulating body... all the red tape, corruption and ineptitude continues to eat things up.

which means we have to upgrade our airport, improve the services and make travelling convenient and less of a hassle.

[vinj]

which means we have to upgrade our airport, improve the services and make travelling convenient and less of a hassle.

That's a definite must. I must say though we are a far cry from the 80s and 90s where airports were cramped with no aircon, and the only airline was PAL. :D

[CVT]

Have not really used these airlines but their demise would definitely be a step backward.competition is good for us consumers.keeps the industry leaders on their toes all the time.
17.7K:santas:

[lowslowbenz]

Have not really used these airlines

OT:

Wow boss ha! Exclusive!

Private jet all the time ba ang gamit sa mga trips?



BTT:

I'd like to see PAL (again) in its former glory ... (full tray in flight meals, pleasant, warm, and friendly stewardesses, etc.)

[rollyic]

AirAsia PH says expansion proves it's staying despite losses

by Coco Alcuaz, ANC
Posted at 01/04/2013 5:04 PM | Updated as of 01/04/2013 5:06 PM


MANILA, Philippines - Budget carrier AirAsia Philippines said it plans to increase its fleet from 2 to 5 Airbus A320s this year and add frequencies and destinations, reacting to an analysis that said one of the three smaller low-cost carriers operating in the Philippines could close this year.

AirAsia Philippines, an affiliate of Malaysia's AirAsia, first flew in March 2012. It is owned by businessmen Antonio Cojuangco and Michael Romero and president Maan Hontiveros, who once worked with AirAsia owner Tony Fernandes at Warner Music.

"You don't make money in your first 9 months,'' Commercial Head Alfredo Herrera said in a phone interview. "We're expanding. The fundamentals are there. You just have to grow it. The Philippines is crucial to AirAsia's regional strategy."

AirAsia, Seair, which is affiliated with Singapore's Tiger Airways, and independent Zest Air are the smaller low cost carriers operating in the Philippines. They are dwarfed by the Philippine Airlines group and Cebu Pacific. PAL is owned by Lucio Tan, one of the country's richest men, and San Miguel, one of the country's biggest companies. Cebu Pacific by John Gokongwei, another of the country's richest men.

"Consolidation is likely to hit the Philippines in 2013," The Sydney-based Center for Aviation -- known as CAPA -- said yesterday. "There are now five LCCs competing in the domestic market, which is clearly too many. Over-capacity and irrational competition already resulted in losses throughout 2012 at all Philippine carriers except Cebu Pacific."

"It is very price competitive," AirAsia Philippines' Herrera said. "Competition for seats is cut-throat. We have to be on our toes with ancillary products such as insurance, meals and baggage. We have to upsell there."

Competition may be intense for executives too: Herrera joined AirAsia last year after a few months at Zest Air after a longer stint in Air Philippines, Philippine Airlines' low-cost affiliate.

AirAsia Philippines is based in Clark, the former U.S. airbase north of Manila. It flies to Kuala Lumpur, Hong Kong, Singapore and Taipei. Locally it flies to Davao and Kalibo, a gateway to Boracay island.

Herrera says it plans to add Bangkok and Cebu in the second quarter, while increasing flights to Hong Kong and Kalibo. He said it's also studying resuming flights to Puerto Princesa, Palawan and launching flights to Tagbilaran, Bohol. The aim is to serve northern Filipinos who want to travel to "leisure" destinations in the south, Herrera said.

The Malaysia-based AirAsia has a Kuala Lumpur flight to Clark. It will end its Clark-Kota Kinabalu route in February.

AirAsia PH says expansion proves it's staying despite losses | ABS-CBN News

biglang kumabig yung isang ariline :D

[Horsepower]

But AirAsia uses china made Airbus planes. I don't think I'll fly with them anytime soon.

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But AirAsia uses china made Airbus planes. I don't think I'll fly with them anytime soon.

[donbuggy]

Low-cost aircraft for low-cost airlines.

[Retz]

Low-cost aircraft for low-cost airlines.

Good one sir Don.

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Low-cost aircraft for low-cost airlines.

Good one sir Don.

[Horsepower]

Southwest is a budget airline serving Martini. It allows more flexibility as the passengers can choose seats during boarding. You can choose seatmates. Why can't we have that here?

[vinj]

Southwest is a budget airline serving Martini. It allows more flexibility as the passengers can choose seats during boarding. You can choose seatmates. Why can't we have that here?

Because:

1. Kahit may seating arrangement na, mag-uunahan pa rin sa pila papasok sa airplane at walang nakikinig sa "elderly and those travelling with infants/small children first".

2. Maraming mag-aaway na mag-asawa/couples dahil pagpipilitan ng lalake na tumabi sa stewardress (or ikandong nalang yung stewardress mismo), or mag-uunahan lahat para makatabi si "sosyal pretty women" na sa check-in counter pa lang, minamatahan na. :D

[boybi]

Buti nga meron ng seat assignments ngayon. Nung first time nagkaroon ng budget airline, first come first served ang seating, parang bus.

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Buti nga meron ng seat assignments ngayon. Nung first time nagkaroon ng budget airline, first come first served ang seating, parang bus.

[1997]

kung wala ng seat pwede sabit... hehehe

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kung wala ng seat pwede sabit... hehehe

[donbuggy]

Good one sir Don.

Thanks.