AirPhil eyes 25% market share, adds new aircraft

The Lucio Tan group is taking on Gokongwei-led Cebu Pacific on all fronts, with budget unit AirPhil Express looking to take a significant bite out of the latter’s market share by the end of this year.

At a press conference Friday, AirPhil Express said it was set to add several more domestic and international destinations to its growing route network as it takes delivery of new aircraft.

Even as the airline industry struggles with high fuel prices, AirPhil Express, the sister company of flag carrier Philippine Airlines (PAL), said all airlines were expected to post healthy growth rates this year as more Filipinos start to travel by air.

“Our objective in the medium term is to become a strong number two budget carrier in the country. We want to close the gap with our rival,” AirPhil senior vice president for sales and marketing Alfredo Herrera said.

Cebu Pacific has a market share of 48 percent.

Herrera said AirPhil, for its part, ended last year with a 19-percent share of the local air travel market. By the end of this year, he said the company wanted this number to go up to 25 percent, or the equivalent of four million passengers.

He said the company was expecting to take delivery of two brand-new 180-seater Airbus A320 aircraft this year. Four more are slated to be delivered in 2012, adding to the company’s current fleet of seven jets.

He said industry growth continued to be driven by stiff competition among local players.

“People who have never taken the plane are now traveling by air as much as they can because prices are so reasonable,” Herrera told reporters.

AirPhil announced on Friday that it would put up a hub at the Diosdado Macapagal International Airport (DMIA) in Clark Freeport, Pampanga. Under its memorandum of agreement with Clark International Airport Corp., AirPhil will start operations at the facility by October this year.

Once in Clark, AirPhil will join other budget carriers like Cebu Pacific and Malaysia’s Air Asia that have chosen to put up major hubs at the facility north of Metro Manila. Air Asia’s local unit, Air Asia Philippines, has also chosen Clark as its local hub once it launches its operations later this year.

Aside from offering competitive prices, Herrera said AirPhil was also the only budget carrier that did not charge extra for baggage. The company allows passengers to have 15 kilos of free check-in luggage. It also allows seven kilos of free hand-carry baggage.

“This is an extremely important provision that has been taken for granted and now much appreciated by our passengers,” Herrera said.