Cebu Pacific Air is still optimistic on long-haul low-cost and confident that the model can work on certain routes, despite pulling out of three long-haul routes last year.
The Filipino low-cost carrier stopped services to Riyadh, Kuwait and Doha in mid-2017 following a substantial oversupply of seats that drove down fares, making the routes “unsustainable”.
The suspension of the three Middle Eastern routes left Cebu’s long-haul unit with services to Dubai and Sydney.
“We dropped out of a couple of long-haul sectors after seeing some irrational exuberance from competitors on those routes,” the airline’s chief operations adviser Rick Howell tells FlightGlobal in an interview in Singapore.
“But actually we had things to do with the planes which were much more useful. We took the planes out of those routes and redeployed them to increase Singapore, Hong Kong, Taipei, Incheon, Narita and Bangkok services.”
He adds that the airline’s A330-300s have been “a massive success” on those regional routes, and gave the example of how the 436-seat widebody was full within three weeks of being deployed to Tokyo Narita. The A330s have also allowed the carrier to tap additional revenue from bellyhold cargo.
“In 2016 and 2017 we didn’t have significant order strength except ATR deliveries, so that sort of knocked our growth back for a year or so. The redeployment of the A330s gave us the ability to advance market share again regionally and domestically,” says Howell.
The airline has since announced plans to launch a thrice-weekly Manila-Melbourne service in August, pending government approvals.
Howell says that while Cebu Pacific’s Sydney and Dubai services are “very successful”, the airline needs to pick its long-haul destinations carefully.
“We will generally choose places where there’s a significant Filipino population because we’re such a strong brand in the Philippines. If we choose the markets carefully, particularly where there is a significant Filipino population, there will be immediate recognition, people will know who we are and what we do.”
Asked if services to the United States are still in its plans, Howell says that there is still “work to do”. Cebu Pacific has previously talked about flying to Honolulu and even the mainland US. The latter would require a new type to join the fleet, which is unlikely in the short term.
“There’s a bit of a blood bath, house of death, when it comes to transpacific yields at the moment…so we’re not going to get into a competition just to demonstrate how impressive we are,” he says.
“The A330s won’t make the west coast anyway. The A330neo - that’s interesting, as is the 787. The A350 is probably a bit too much of an aeroplane for us. We are always in discussions with the manufacturers.”
Source: Cirium Dashboard
