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Domestic air travel starts to recover

Bright prospects fueled by cheap oil prices
Philippine Airlines plane FILE PHOTO

Philippine Airlines plane  FILE PHOTO

Domestic aviation is on an uptrend as airlines such as Cebu Pacific and Philippine Airlines (PAL) lead the way in terms of fleet expansion.

All domestic carriers tracked by the Civil Aeronautics Board (CAB) carried about 20.35 million passengers in terms of domestic scheduled flights in 2014. Although the growth rate was almost flat, or an increase of just 0.07 percent, this was coming from a decline in 2013, when domestic aviation fell about 1.14 percent year-on-year.

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Officials of Cebu Pacific, PAL and AirAsia Philippines all indicated that 2015 was an opportunity for growth partly due to the significant fall in oil prices since 2014.

In an earlier report, consultancy firm CAPA-Center for Aviation said the growth outlook for Southeast Asian airlines this year remained “bright,” with budget carriers continuing to propel the industry forward.

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CAPA, which based the report on its 2015 aviation outlook for the region, noted that while growth was coming in at a slower pace than two years ago, the current year offered improving conditions such as lower fuel prices.

It added that restructuring efforts by carriers “should at least reduce the losses and migrate to profit and allow new growth.”

“The fundamentals of the market remain favorable, particularly at the bottom end as the continued rise of discretionary incomes means more of the region’s 600 million people can afford to fly— and those that are already flying can afford to fly more often,” CAPA said.

Budget airline Cebu Pacific widened its lead against rivals PAL and the local units of Malaysia’s Air Asia Berhad in domestic operations in 2014 following its acquisition of Tiger Airways Philippines last year, according to data from the CAB.

The CAB numbers showed that Cebu Pacific cornered 60.8 percent of all domestic flights as it flew a combined 12.38 million passengers in 2014.

Cebu Pacific had controlled about 50 percent of the local market in 2013, which was before it acquired Tiger Airways Philippines from its Singaporean parent a year later in a $15-million deal.

Data from the CAB showed that PAL and sister firm PAL Express flew a combined 5.9 million passengers in 2014, for a domestic market share of 29 percent. Air Asia Zest and Air Asia Philippines had close to 10 percent of the market.

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The remainder was made up for by smaller carriers, which include Magnum Air, Island Transvoyager and SeaAir International, data from the CAB showed.

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TAGS: Airline industry, Business, Cebu Pacific, Civil Aeronautics Board, economy, News, Philippine Airlines
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