Cebu Pacific gets nod to fly to US

MANILA, Philippines–The US Department of Transportation has cleared budget carrier Cebu Pacific Air for flights to the United States as it noted the recent restoration of the Philippines’s Category 1 air safety status, a US government notice showed.

Cebu Pacific, which is set to launch flights to Australia and Saudia Arabia this year and recently sought seat allocations to Canada, was previously barred from flying to the US after the Federal Aviation Administration downgraded the Philippines to Category 2 six years ago.

This left flag carrier Philippine Airlines, which had been operating flights from Manila to the US before the downgrade, as the only domestic airline providing the transatlantic service.

The US transportation department, which issued the notice on June 5, specifically approved the removal of a provision that Cebu Pacific only conduct operations in the US through a wet lease agreement. This type of agreement, where another airline would lease a carrier’s plane and crew, is typically used to serve locations where it is banned from operating.

The US notice stated that Cebu Pacific was originally granted the authority to fly to the US under a wet lease condition while the Philippines was rated Category 2 under the FAA’s safety assessment program, or IASA.

The Category 1 status was restored in early April following an audit that recognized the reforms conducted by the Civil Aviation Authority of the Philippines.

“The FAA has now announced that the Philippines has achieved IASA Category 1 status, and Cebu [Pacific] has accordingly sought amendment of its authority to remove the wet lease restriction,” the US Transportation Department noted. “We would note that on May 28, 2014, the FAA advised us that it knew of no reason why we should act unfavorably on the applicant’s request.”

The approval paves the way for Cebu Pacific, a unit of JG Summit Holdings Inc. of the Gokongwei family, to mount direct flights to US territories like Guam, Saipan and Hawaii, locations the airline was studying, Cebu Pacific CEO Lance Gokongwei said in a previous interview.

The permit also allows Cebu Pacific to fly to mainland US cities like San Francisco and Los Angeles but Gokongwei said these were unlikely in the near-term given the limitation of its longest-range plane, the Airbus A330. Cebu Pacific was also allowed to mount flights to Europe last April but Gokongwei said there were no near-term plans yet.

The carrier has been placing more focus on the long-haul business after launching its maiden service to Dubai late last year given the potential for higher returns in the long run.