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.
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