The Philippines' three domestic airlines do not plan to fly overseas despite the vacuum left by Philippine Airlines (PAL), which discontinued its international routes at the end of September. All three have permits to fly internationally, but are deterred by poor business prospects.
"The Asian economic crunch and the currency situation doesn't warrant overseas flights yet, with or without PAL," says Cebu Pacific Air senior adviser Ron Ridgeway. Cebu Pacific and Air Philippines point to the problems experienced by Grand Air, which expanded rapidly to Seoul, Hong Kong and Taipei eight months after its 1995 launch, ditched all three routes and then had aircraft seized by creditors in Hong Kong and Taipei.
The airlines will focus on domestic routes, which have enjoyed a surge in load factors and profitability following PAL's ongoing problems. Before the pilot walkout in June, PAL commanded 84% of the domestic passenger market. PAL's share has now slumped to 50%, with Cebu's share surging to 30%, and Air Philippines to 15%. Grand Air has 5%. Air Philippines and Cebu Pacific are now profitable, although Grand Air continues to lose money.
Cebu plans to add four more McDonnell Douglas DC-9s, boosting its fleet of the twinjet to 12 aircraft. Air Philippines is adding another Boeing 737-200, and plans to buy two used Beechcraft 1900s, to fly to tourist destinations. It also wet-leases three Boeing MD-88s from Taiwan's U-Land but their size makes them unsuitable for some regional airports.
Air Philippines was asked by Philippine President Joseph Estrada to operate PAL's nine Fokker 50s, says company president Augustus Paiso, but it cannot because of legal and technical problems.
Meanwhile, Grand Air has two 737-200s and hopes to re-acquire its third from creditors by November, in time for the winter.
Source: Flight International
