Cebu Pac seeks more seats for Cebu-HK route

MANILA, Philippines - Gokongwei-controlled budget airline Cebu Air Inc. (Cebu Pacific) is seeking more seat entitlements from the Civil Aeronautics Board (CAB) for flights between Cebu and Hong Kong.

Cebu Pacific has filed an application with the CAB for the reallocation of 1,240 unutilized seat entitlements for the Cebu-Hong Kong route previously allocated to PAL Express.

PAL Express is a unit of flag carrier Philippine Airlines Inc. (PAL), which is jointly owned by taipan Lucio Tan and diversified conglomerate San Miguel Corp. (SMC).

Cebu Pacific operates an extensive route network serving 60 domestic routes and 34 international routes with a total of 2,231 scheduled weekly flights. It operates from six hubs: the Ninoy Aquino International Airport (NAIA) Terminal 3; Mactan-Cebu International Airport; Diosdado Macapagal International Airport (DMIA) in Clark, Pampanga; Davao International Airport; Iloilo International Airport; and the Kalibo International Airport.

Cebu Pacific is in the middle of a $4-billion refleeting program aimed at acquiring close to 50 brand-new Airbus aircraft to beef up its existing fleet of about 52 aircraft. It expects the delivery of 12 A320, 30 A321neo, and three A330 between 2014 and 2021.

It is gearing up for flights to Hawaii and Guam after the US Federal Aviation Administration (FAA) upgraded the country’s aviation safety rating back to Category 1 last April 9 after being downgraded to Category 2 in January 2008.

It is also looking at mounting direct flights to Paris and Amsterdam, among others, after the European Union lifted a ban imposed in 2010 preventing the airline from entering European airspace.

The airline is set to mount direct flights to Kuwait starting Sept. 2, and Sydney in Australia starting Sept. 9 to beef up its existing long haul route between Manila and Dubai.

Cebu Pacific president Lance Gokongwei said earlier it takes six to 18 months from launching for long-haul routes to become profitable.

Gokongwei said the airline expects earnings to pick up after plunging in the first quarter of the year amid the integration of newly-acquired Tiger Airways Philippines, as well as the continued weakening of the peso against the greenback.

“At the start of the year we said the first quarter comparison would be tough and indeed our earnings went down significantly in the first quarter primarily because of the weak peso and fairly elevated price of fuel. But we expect the back half of this year to be stronger than the back half of last year,” he said.

Cebu Pacific’s net income plunged 86 percent to P164.16 million in the first quarter from P1.16 billion in the same period last year as it booked a net foreign exchange loss of P193.65 million after the peso weakened to 44.82 per $1 from 44.4 to the greenback.

Revenues grew 11.6 percent to P11.76 billion in the first quarter from P10.54 billion last year, while expenses surged 22 percent to P11.25 billion from P9.22 billion as a result of expanded operations with the launch of its long haul services last October and growth in seat capacity from the acquisition of new aircraft.

Gokongwei pointed out that the months of April, May, and June are seasonally strong months for the airline industry.

The airline spent $15 million to acquire 100 percent of Tiger Airways Philippines in a deal that was closed last March 20.