Cebu Pacific gets first wide-body Airbus

TOULOUSE, FRANCE—Budget carrier Cebu Pacific has taken delivery of its first wide-body aircraft, the Airbus A330-300, as the company gets ready for the launch of its long-haul operations in October.

Cebu Air Inc., the operator of Cebu Pacific, said the company’s first A330-300 would be used for flights to Singapore and Incheon starting July. Three more A330s are slated to arrive by the second quarter of 2014.

Apart from allowing long-haul flights to points beyond the flying range of Cebu Pacific’s smaller planes, the new A330s would allow the airline to add seats to high-demand destinations without increasing the number of flights.

Alex Reyes, head of Cebu Pacific’s long-haul operations group, said the airline intended to fly to places where there were big Filipino communities.

Cebu Pacific plans to start flights to Dubai in the United Arab Emirates in the first week of October. It will be the second local airline with long-haul operations.

The company will also be the second local airline with flights to the Middle East, following flag carrier Philippine Airlines (PAL), which will re-launch its own service to Dubai a week before Cebu Pacific does.

Reyes said the company also has applications for flights to other Middle Eastern points, namely Riyadh in the Kingdom of Saudi Arabia and Doha, Qatar. Beyond the Middle East, Cebu Pacific plans to start flights to various points in Australia, Eastern Europe and the west coast of the United States.

“Any time we go into a new market, we are confident that we can grow it very strongly, not only for us but for other airlines as well,” Reyes said.

Because of Cebu Pacific’s “no-frills” business model, Reyes said the airline expected to bring down fares for long-haul routes by as much as 30 percent. “If you lower the price by that much, the market grows two to four times,” Reyes said.

Marino Modena, A330 product marketing manager at Airbus, said the plane that was built for Cebu Pacific would have more seats for passengers than any other A330 ever delivered to any airline in the world to date.

The A330 has a legal capacity of 440 passengers, while Cebu Pacific’s A330 will have 436 seats, all for economy class passengers. Having more seats on a plane allows an airline to sell tickets at lower prices because more people are paying for the cost of the flight.

Cebu Pacific’s A330 fleet are leased from American aircraft leasing company CIT.

Reyes admitted that several hurdles still stood in the way of the success of Cebu Paciifc’s long-haul operations. The most immediate concern was the lack of landing and passenger terminal slots at the Ninoy Aquino International Airport (Naia) in Manila.

“It is still a concern for the Philippine aviation sector. We cannot launch new flights until we get slot approvals,” Reyes said.

Earlier this month, the government said it had started refusing the entry of new foreign airlines into Manila due to airport congestion. Sydney-based think-tank Center for Aviation recently reported that Naia was the world’s 34th busiest airport as of the end of 2012, up from the airport’s ranking of 46th in the same list the previous year.

Another concern, Reyes said, was the lack of flight entitlements in several countries that Cebu Pacific plans to fly to. For instance, Reyes said local airlines were allowed only one flight a day from Manila to Saudi Arabia. All these entitlements are held by PAL.

Reyes said the company was facing a similar problem in Australia, where most entitlements had already been assigned to other local airlines. Negotiations for new air rights between the Philippines and Australia are scheduled to be held later this month. This follows the failure of the government-led Philippine air panel and its Australian counterpart to reach an agreement in the last two rounds of negotiations. “Maybe the third time’s the charm,” Reyes said.