Cebu Pac eyes ‘wet lease’ for US flightsBy Paolo G. Montecillo
Philippine Daily Inquirer
Budget carrier Cebu Pacific is looking into so-called “wet lease” agreements, or the use of both planes and the crew of foreign airlines, for its plans to launch long-haul flights by the third quarter of next year.
Wet-lease deals are being considered as contingency measures to allow the company to mount flights to the United States in case the country fails to regain its category 1 status with the US Federal Aviation Administration (FAA).
“We are studying our wet lease options. We are talking to some (groups),” said Alex Reyes, general manager for Cebu Pacific’s long-haul operations.
Speaking at the opening of the Philippine Academy for Aviation Training (Paat), a facility co-owned by Cebu Pacific, Reyes said the government assured the airline that the country would regain its category 1 status by 2013. This would be just in time for Cebu Pacific’s long-haul plans.
The country was downgraded to category 2 by the FAA in 2007 mainly due to safety concerns stemming from incompetence and understaffing at the former Air Transportation Office (ATO).
The Civil Aviation Authority of the Philippines (Caap), which replaced the ATO, is scheduled to undergo an audit by the International Civil Aviation Organization (Icao) in February next year. Results of the audit, if positive, should be enough basis for the FAA to grant an upgrade for the Philippines.
The category 2 status means Philippine carriers are barred from expanding their operations in the United States. Existing operations, particularly Philippine Airlines’ (PAL) daily flights to San Francisco and Los Angeles, were allowed to continue.
Cebu Pacific said wet lease deals with entities registered in the United States or other category 1-rated countries would allow the airline to circumvent the category 2 restrictions. The US Department of Transportation gave its green light for Cebu Pacific to sign such deals last November.
“But if we are upgraded, then there won’t be any need for the wet lease,” Reyes said. “It’s always preferable to fly your own aircraft.”
In a separate interview, Cebu Pacific chief executive Lance Gokongwei said the company’s plans for long-haul flights were not dependent on destinations in the United States opening up.
Short URL: http://business.inquirer.net/?p=96379