A top official of Cebu Pacific said that the Philippines would become the low-cost carrier (LCC) capital of the world.
“Today, in the Philippines, low-cost carriers dominate. Eight out of 10 seats on the domestic market are low-cost carrier seats. No other aviation market in the world has this kind of market share for LCCs,” said Alex Reyes, general manager for the Long Haul Division of Cebu Pacific.
In a recent Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean Growth Area (BIMP-EAGA) Summit held in Davao, Cebu Pacific Air said that LCCs in the Philippines contributed to approximately 96 percent of total domestic air travel growth from 2006 to 2011.
This is mainly driven by the low fares offered by LCCs.
Despite the rising cost of fuel, average fares are now 30 percent less than 10 years ago because of LCCs, allowing people who never flew before to travel three to four times a year.
Promo fares and seat sales allow even minimum-wage earners to fly.
In 2006, one out of every two domestic passengers flew on LCCs. In 2011, LCCs dominated the domestic market with 76-percent market share, or three out of every four domestic passengers, indicating how many have benefit from the entry of LCCs in the market.
“We are undertaking our next phase at a time when Philippine aviation is at a very dynamic stage of its development. The activity, the vibrancy, the amount of investment, the excitement—is similar to what happened to the Philippine telecommunications industry,” Reyes said.
The Cebu Pacific official said that, “Just a few years ago, phones were considered to be very luxury items, and very few people could afford to have them. Along came low-cost phones, and suddenly communication anywhere, anytime was in reach of every ‘Juan.’
Text messages were so cheap that mobile-phone subscribers preferred to text, rather than to call, because it was so cheap.”
At one point in time, the Philippines became the text messaging capital of the world.
In the most competitive and most dynamic, LCC-dominated aviation market in the world, Cebu Pacific continues to thrive.
“We remain the only carrier that remains profitable,” the official said.
He added that, “Only LCCs can make travel ultra affordable. And with 7,107 islands to connect, and only one domestic trip for every four Filipinos, we are far from reaching the full potential of air travel.”
Cebu Pacific said that it sees no reason why the same dynamics can’t apply to the long-haul market.
Rosalie C. Periabras