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CebuPac scales down ME operations

/ 12:14 AM May 25, 2017

Cebu Pacific Air, the country’s biggest budget airline, is scaling back most of its operations in the Middle East due to “aggressive” competition and an oversupply of seats.

The announcement came a day after flag carrier Philippine Airlines said it would suspend Abu Dhabi flights on July 8 this year on what it described as route assessment initiatives.

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Cebu Pacific, owned by the Gokongwei family’s JG Summit Holdings Inc., revealed a larger rollback of its Middle East operations, saying it would suspend flights to Doha, Qatar; Riyadh, Saudi Arabia and Kuwait over the next two months.

It said the last Manila-Kuwait flight was set on June 13, Manila-Doha on July 1 and Manila-Riyadh on July 2 this year.

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The flights, a key part of Cebu Pacific’s long-haul strategy, were launched between 2014 and 2015. It briefly operated flights between Manila and Dammam before suspending the service in early 2015.

Cebu Pacific, which retains control over the domestic market but has a still-growing footprint overseas, will retain its long-haul services to Dubai, United Arab Emirates and Sydney Australia, the statement showed.

“We have to continuously review our routes to ensure their viability. At this point, it makes more sense for us to re-deploy the aircraft used for our Riyadh, Doha and Kuwait service to routes where we can further stimulate demand and sustain our low fare offers,” Cebu Pacific spokesperson JR Mantaring said in a statement.

He said Cebu Pacific played a role in cutting ticket prices to the Middle East. In previous statements, Cebu Pacific would launch flights to the region with promos priced up to 60 percent below competitors.

“Of late, other carriers have aggressively added more flights, which has resulted in substantial oversupply of seats and fares that are so low, hence making the routes unsustainable,” Mantaring added.

The decision also comes as the airline’s operator, Cebu Air Inc., reported a 68-percent drop in profit in the first quarter of 2017, partly due to the rise in fuel prices, a key operating expense.

In a statement, Cebu Pacific said it might increase flights to the UAE and Australia “in the future.” It, however, did not elaborate.
“Passengers affected by the suspension of CEB service in Doha, Riyadh and Kuwait are being contacted,” Cebu Pacific said.

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Affected passengers can opt to rebook for flights with other airlines or on earlier travel dates with Cebu Pacific; get full refund, or place the full value of the ticket in a travel fund for future use, it added.

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TAGS: budget airline, cebu pacific air, JG Summit Holdings Inc., Middle East
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