Asian Spirit sees 20% revenue growth this year to P1.38B

Budget carrier Asian Spirit expects its revenues to expand by another 20 percent this year to P1.38 billion, brought about by expansion to additional foreign routes and continued growth in passengers, a top company officials said.

The company has been growing its revenues by about 20 percent yearly. Revenues hit P1.15 billion in 2005 compared to around P900 million in 2004, marking the first year that Asian Spirit hit the P1-billion revenue mark. The air carrier started commercial operations in 1996.

The growth rate is expected to increase in the coming years as Asian Spirit expands its operations to more countries.

Asian Spirit vice president for commercial operations Butch Rodriguez told The STAR that the Civil Aeronautics Board (CAB) has recently revoked Pacific East Asia Cargo Airline’s entitlement to fly to Korea due to non-use and just last week, gave this to Asian Spirit.

The RP-Korea air agreement limits the designation of Philippine carriers that can fly to Korea to only four, namely Philippine Airlines, Cebu Pacific, Air Philippines, and Pacific. But Since Pacific has not been using its entitlement for the last seven years, Asian Spirit requested last August to transfer the permit to operate air transport services to Korea

Rodriquez said CAB has given Asian Spirit six months to start using this entitlement. "Thus, we plan to launch the services to Korea by the latter part of next month or early January next year," he disclosed. This timetable will also depend on how fast Asian Spirit can get its permit from Korea, the official added.

Asian Spirit will be operating daily flights from Manila to Korea, and will be using leased Boeing 737-400 170-seater aircrafts. There will also be four flights a week from Davao to Korea starting early next year and three times a week from Clark to Korea. Two aircraft will be leased for the Korean operations.

The air carrier began international operations only this year and is currently flying to Palau. It plans to fly soon from Zamboanga to Sandacan in Malaysia and is awaiting issuance of its permit to operate from Clark and Davao to Macau. There are also plans to fly from Basco and Laoag in Ilocos to Kaoshuing in Taiwan, as well as from Davao to Kota Kinabalu and Brunei.

Last year, the company undertook a $40-million fleet expansion involving the leasing of jets for its international operations. Four jets are already being used while two will be arriving soon for the Korean operations.

Rodriguez said the company has been focusing on the BIMP-EAGA (East Asian) countries to avoid a head collision with the big players. "We are purposely niching and this is the main reason why we have continued to be profitable," he pointed out.

Asian Spirit is majority-owned by a cooperative comprising three major shareholders – the families of Jack Po, Noel Oñate and Antonio Turalba – and aviation industry professionals, including former staff and employees of other airlines.

According to Rodriguez, Asian Spirit utilizes 14 aircraft of various types, three of which are jets that are used in big airports such as Davao and used to fly to Palau.

The Asian Spirit official likewise revealed that there was a 17 percent increased in the number of domestic passengers carried by the company during the January to October 2006 period compared to the same period last year. There were no international operations yet last year and the Palau operation is only 10 months old.

Revenues during the first 10 months of 2006 grew 10 percent compared to last year, which should have been higher if not for the depreciation of the peso against the dollar.

Rodriguez likewise explained that there was a disparity between passenger and revenue growth rates because fares went down for some of the domestic routes. The company also experienced positive bottom lines for the last eight years and expects this trend to continue this year.

As for the cutthroat competition going on between the two largest airlines – Philippine Airlines and Cebu Pacific – in terms of pricing, Rodriguez said Asian Spirit is currently preparing itself to compete on this level. "This competition in terms of pricing is something we cannot avoid," he said.