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| Philippines |
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| Cebu Air plans to restructure international rate
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| Source: Manila Bulletin |
| Author: Lynda B. Valencia |
| Date: 2002-11-09 |
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Cebu Air, Inc. is still looking ways to make its international flight operations competitive with Asia’s industry giants.
It will be noted that Cebu Air lowered its fares for domestic operations and it worked.
Lance Gokongwei, president and COO of JG Summit Holdings, Inc. which owns Cebu Air said the “low-cost proposition” is difficult to implement for its international operations, with Cathay Pacific and Singapore Airlines adopting multiple fare structures for different types of customers.
It also said that Cebu Air, also has to factor in higher insurance costs, which have dramatically increased after the Sept. 11 attacks and rising fuel costs, brought about by tension in the Middle East.
Gokongwei said “the international side of the business now is much more difficult to deal with. Major players like Cathay, Singapore Airlines and even Philippine Airlines, Inc., have a large aircraft, which allow them to have seven or eight different fare structures to suit the needs of those availing of tour packages or those traveling on a shoestring budget.”
“But because we’re low-cost fare airline, we are forced to compete at the lowest common fare,” Gokongwei said.
Cebu Air started flying overseas in December, initially plying the Manila-Hong Kong and Laoag-Hong Kong routes.
It expanded its regional services this year to include Seoul, South Korea and Singapore. It is also studying the feasibility of flying to Shanghai, China and Taiwan.
With regards to threat of terrorism, Gokongwei said Cebu Air is also ensuring the safety of its passengers.
“We are not just looking at hijacking or accidents anymore. We are looking and inspecting cargoes. We don’t accept cargo from people we don’t know. We have invested on equipment and we are thankful that airport security has been tightened,” Gokongwei said.
Cebu Air’s fleet is composed of 12 DC-9’s and two 757-200 aircraft.
The airline posted a net income of R80.8 million in 2001 with operating revenues increasing by 28.4 percent to R3.76 billion. (PNA)
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