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MANILA, Philippines – The Middle East, home to over two million overseas Filipino workers (OFW), has been in Cebu Pacific’s must-fly-to list since 2009. Three years and firmed up long-haul plans after, the Gokongwei-led budget carrier still has challenges to face.
On Thursday, June 7, Cebu Pacific vice president for marketing and distribution Candice Iyog said they are eyeing to fly to Oman, United Arab Emirates (UAE) and Kingdom of Saudi Arabia (KSA).
When Cebu Pacific starts mounting long-haul, or over 4-hour-long, flights by 2013, it wants to fly first to lucrative UAE and Saudi Arabia. They remain interested in Oman but not immediately.
The Philippines holds available entitlements to fly to Oman. “We checked and there is no one using the entitlements on both sides,” Iyog said.
The Civil Aeronautics board (CAB), in a notice dated June 1, has set on July 3 a hearing on Cebu Pacific’s petition to launch Oman flights from airports in Manila and Clark. “We have asked for a deferral of Oman air talks to next year. Our priority now is to get air rights for UAE and KSA,” Iyog said.
But while the slots to fly to Oman are available, the UAE and Saudi Arabia are not.
Flight entitlements
Regulatory restrictions and being a new entrant to this route that’s beyond its current Southeast Asia base have worked against Cebu Pacific. Thus, the airline is banking on CAB to favor it over Philippine Airlines (PAL) for flight entitlements to Middle East destinations.
Flights between the Philippines and Middle East destinations are regulated by flight entitlements that come out of bilateral agreements between countries. CAB negotiates then assigns these flight entitlements to local airlines.
In March, Cebu Pacific asked CAB to recall half of the 14 UAE entitlements assigned to rival PAL. Cebu Pacific said PAL is no longer mounting direct flights there, thus the CAB might as well reallocate these to airlines in need of entitlements.
Cebu Pacific is also eyeing PAL’s Saudi Arabia entitlements.
PAL stopped its direct flights to UAE in 1998 but still technically “flies” there through code share agreements. Middle East airlines “lease” PAL’s flight entitlements so they could mount more flights to Manila.
PAL flies 14 times a week to Dubai and Abu Dhabi, 8 times a week to Bahrain, and 7 times a week to Doha, Qatar. It is rationalizing its routs and has cancelled its Manila-Riyadh flights in March 2011.
Long-haul plans
In January, Cebu Pacific announced plans to plans to launch budget long-haul flights in the 3rd quarter of 2013 to serve Filipinos working abroad who can’t afford to fly home more often.
The no-frills budget carrier is going to lease up to 8 Airbus A330-300 aircraft to serve new markets beyond the range of its current fleet of Airbus A320 aircraft. Aside from the Middle East, the other international destinations being eyed are Australia, parts of Europe and the United States.
“We are exploring serving cities where large Filipino community resides. Data indicates that more than half of Filipinos deployed in these regions take multiple stops and connecting flights because no home carrier can fly them there non-stop,” Cebu Pacific president and chief executive officer Lance Gokongwei said in a previous press briefing.
Saudi Arabia, for instance, transported an average of 165,000 passengers last year to Manila via direct a flight as against to 293,000 Filipinos deployed there. This means that nearly half of Filipinos who flew to Saudi Arabia in 2010 had to take multiple flights to get to their destinations.
Gokongwei said Cebu Pacific can tap the 4 million overseas Filipino workers in the United States and over two million in the Middle East. The Airbus A330 has a 400-seat capacity. – Rappler.com
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