Cebu Pacific Air is rethinking its long-haul strategy, shelving—for now—plans to fly to Honolulu in the United States.
The low cost carrier, controlled by the Gokongwei family’s JG Summit Holdings Inc., is instead keen on expanding operations within the Philippines and neighboring areas in Asia, CEO Lance Gokongwei said in a recent interview.
It was also keeping alive the possibility of flying to Melbourne, its second destination in Australia after Sydney.
“We would rather focus our resources on meeting existing demand for regional and domestic flights,” Gokongwei said.
Cebu Pacific earlier announced a significant cutback in its Middle East operations. From June to July, it suspended operations to Kuwait, Doha and Riyadh. It still flies to Dubai in the United Arab Emirates.
Gokongwei acknowledged that Cebu Pacific was suffering “immense losses” on those Middle East routes.
Those flights, once a key part of Cebu Pacific’s long-haul strategy, were launched between 2014 and 2015. The budget airline briefly operated flights between Manila and Dammam before suspending the service in early 2015.
“The other airlines, we believe, are perhaps benefiting from some subsidies from their governments,” Gokongwei adding, likely referring to state-owned Gulf carriers— Cebu Pacific’s main rivals on those routes.
“Privately owned airlines like ourselves really could not sustain the operations,” he said.
Gokongwei said its fleet of Airbus A330s had since been redeployed to cater to high demand destinations like Hong Kong, Korea, Japan, Davao and Cebu.
“We’ve seen increasing demand more for international and short-haul traffic,” he noted, adding that Cebu Pacific was still targeting to carry around 20 million passengers this year, about a tenth better than 2016.
Gokongwei said its pipeline of plane orders would likewise remain unchanged.
Its fleet of aircraft includes one Airbus A319, 35 Airbus A320s and eight Airbus A330s while the Cebgo fleet is composed of eight ATR 72-500s and seven ATR 72-600 aircraft.
Between 2017 and 2022, Cebu Pacific expects delivery of seven new Airbus A321ceo and 32 Airbus A321neo aircraft.
Cebu Pacific’s route network spans 25 international and 37 domestic destinations.