MANILA, Philippines - The entry of budget airlines six years ago has changed the landscape of the domestic airline industry.
Local passenger traffic has increased as air fare rates become more affordable to more Filipinos.
The highly-competitive environment forced domestic airlines to cut fare rates, offering promos, valued-added services, expanding their network and pouring in millions of dollars to acquire more modern and efficient aircraft.
Cebu Pacific (CEB), the country's leading low-cost carrier, was the first local airline to challenge the dominance of Philippine Airlines (PAL).
CEB has recently increased its turbo-prop flights, strengthening its position further as the largest turbo-prop operator in the country.
The airline operates an average of 82 turbo-prop flights a day compared to Philippine Airlines (PAL) and Airphil Express' combined 64 flights.
"We utilize our ATR aircraft for 22 destinations and 25 routes, more than PAL and Airphil Express combined," said CEB VP for Marketing and Distribution Candice Iyog.
"These inter-island flights serviced by our ATR turbo-prop aircraft allow passengers to connect from different provinces to main cities such as Davao, Cebu and Manila. The movement of travelers from one city to another within the country greatly stimulates the tourism and economy," Iyog said.
CEB operates 12 turbo-prop routes from Manila to Catarman, Tuguegarao and Virac. It also flies from Davao to Cagayan de Oro using an ATR aircraft.
To maintain its lead in the domestic market, Cebu Pacific has regularly offered passengers with promo tickets for advanced travels.
The airline has offered summer seat sale of P777 fare to all its 33 domestic destinations for travel from June 1 to July 31, 2011. It has launched seat sale to Bangkok, Singapore, Hong Kong, Macau, Kota Kinabalu, Taipei and from two domestic hubs for travel from June 1 to August 31, 2011.
Cebu Pacific has slashed its fares by 50 percent to all its destinations for travel from June 1 to August 31, 2011.
"This 50% off seat sale is our way of thanking our passengers for continuing to make us number one in the Philippines. We broke several records when it comes to the number of passengers carried in the 1st quarter of 2011, and we will continue to offer more opportunities for everyone to fly," said Iyog.
Last March 30, CEB flew 36,949 guests, breaking previous records for the most number of passengers flown in one day. The previous records were 36,893 passengers in March 28, 2011 and 34,871 passengers in January 2, 2011.
"With our brand-new aircraft fleet, extensive route network and on-time performance, we hope to break this record again during the peak summer months and help boost travel and tourism to and from the country," Iyog added.
Cebu Pacific bagged the Budget Friendliest LCC Award at the Low Cost Airlines World Asia-Pacific Conference held in Singapore, besting other contenders Air Arabia, Air Asia, Jetstar Asia, SpiceJet and Spring Airlines.
Voted on by aviation industry professionals and LCC executives in the Asia-Pacific region, the Friendliest LCC Award recognizes the low-cost carrier with the low fares and overall great service.
PAL offers exclusive promos, cuts fares
In response, flag carrier Philippine Airlines (PAL) has unveiled exclusive promos to private or government-owned firms including multi-nationals.
Executives and staff who frequently travel by air can enjoy special perks and added convenience with PAL's special and customized promos and travel packages either individually or as a group, complemented by frequent flyer rewards program and world-class cabin service.
It is also offering "Buy One Take One" special promotional fares on Mabuhay (Business) class.
PAL's online booking features a fully automated facility called 'Calendar Pricing,' which immediately displays the lowest fare available over a seven-day range 'three days before and three days after the planned travel date "thus allowing travelers to decide quickly when it is most convenient and cheapest to fly."
With the recent tsunami and nuclear disaster in Japan, PAL has slashed its fares by more than 30 percent on inbound flights from Narita, Japan to help Filipino evacuees from Fukushima prefecture.
The price of a one-way ticket from Narita to Manila or Narita-Cebu has been reduced for a limited time to about US$335, against the regular rate of US$500.
The airline's latest airlift assistance is the company's modest contribution to the Philippine government in repatriating Filipino victims of the earthquake, tsunami and radiation leaks from the Fukushima nuclear reactor.
PAL has carried a 10-ton shipment of relief goods sent by the Department of Social Welfare and Development (DSWD) for Japan. The donated goods were contained in 500 boxes and sacks, consisting of blankets, ready-to-eat food, noodles, bottled water and others.
When the Libyan crisis erupted, PAL has flown Filipino evacuees through repatriation flights chartered by DoLE, securing necessary overfly and landing permits, including ground handling arrangement.
Threatened by the recent union strike, PAL had put in place contingency measures to minimize flight disruptions and avoid passenger inconvenience in case a threatened walkout by its ground workers.
Since its founding 70 years ago, PAL has been linked with the Filipino nation as the pioneer flag carrier, major air transport utility and partner in nation-building.
The flag carrier is bidding to replicate its past success in the more demanding operating and competitive landscape of the future.
As the pioneer national flag carrier, PAL had operated on many occasions special flights to evacuate Filipinos in troubled areas, including the 2008 social unrest in Bangkok, Thailand; the 1990 first Gulf War "the largest to date encompassing 30 flights and more than 10,000 evacuated Filipinos; the 1989 war in Lebanon; and the 1980 Iran-Iraq war that displaced more than a thousand Filipinos who fled to Jordan and Kuwait.
The airline has recently expanded its international network with a new direct service from Manila to New Delhi with six weekly flights, three non-stop flights between the two capitals and three flights routed via Bangkok.
The air fare rates 'war' could further heat up competition among the the low-cost carriers (LCC) with the entry this year of the AirAsia in partnership with the Cojuangco group.
Airphil Express continues network expansion
Not to be outdone, Airphil Express, a budget airline and a sister company of PAL, has continuously expanded its network with Singapore as its first international destination.
Airphil has rebranded into a full fledged low cost carrier with its new look, new management and a strong bias for customer benefit. It is the country's fastest growing low-cost carrier and a strong contender in the regional market.
With its planned additional investments of $250 million dollars, the airline is eyeing the acquisition of 20 more aircraft to service both domestic and the expanding international operations including improvement in technology and operational systems.
Joining the highly-competitive industry is Zest Air, owned by Amb. Alfredo Yao. The airline started operating in September 2008 and expanded to Southeast Asian countries the following year.
Leisure airline SEAIR airline operates in tourist destination from Clark and Manila to Caticlan and Borongan in Visayas; Basco and Clark in Northern Luzon; Baler and Tablas in Southern Luzon; Daet in Bicol; Busuanga in Palawan, and Jolo, Tawi-Tawi and Zamboanga in Mindanao. The airline flies direct service from Manila to El Nido in Palawan to Boracay, and Marinduque.
The airline has acquired more 32-seater Dornier 328's to meet its growing markets of Batanes, Caticlan, and Romblon.
Open skies policy
Domestic airlines have expressed concern on certain provisions of the open skies policy that would put local carriers at a disadvantage to foreign airlines.
"Executive Order (EO) 29 would afford foreign airlines benefits so critical that if they are not reciprocated by foreign governments the growth and even the survival of Philippine carriers are at risk," said Cebu Pacific.
It would allow foreign airlines to fly freely into and out of the country. On the other hand, domestic carriers are limited to flights specified in existing air agreements with other countries.
CEB has invested billions of dollars to expand air services within the country and serve Filipino public and tourists alike with low fares and brand new aircraft.
The airline employs 4,300 Filipinos and countless thousands more are indirectly benefited. "We want the same benefits from the governments of these foreign airlines. We want reciprocity which is fair and reasonable."
CEB has a strong record of supporting increased air traffic rights, and has fought hard for such increases. The airline has been a major driver of tourism growth in this country.
"We believe the push to increase tourism can be achieved, by allowing both foreign and Philippine carriers equal access to traffic rights. We do not believe it is fair to deny CEB the right to compete."
"If the Philippine government puts out the welcome mat for a foreign airline, CEB fully supports that, as long as that foreign airline's government grants Philippine carriers the same opportunity. All CEB asks for is reciprocity and a level playing field," the airline added
