Asian Air travel slumps 12% more in February

Cebu Pacific and Air Asia thrives

April 3, 2009

Geneva - The global air travel went further to a sharp decline in February as global passenger volumes nosedived 10.1% than what was recorded a year earlier, the airline industry association IATA said recently. The double-digit fall in passenger demand was almost twice that of the 5.6% decline recorded for January, the latest data from the International Air Transport Association showed.

IATA said that Airlines 5.9% reduction in capacity were not fast enough to keep up with the slump. Both Cathay Pacific and Singapore Airlines previously announced its plan to reduce capacity amidst slumping cargo and passenger market.

Airlines in the Asia-Pacific region posted the sharpest fall in demand, 12.8%, as export-dependent economies cut back on business and leisure travel, particularly those with long-haul destinations to Europe an United States.

Meanwhile, Low Cost Carrier Cebu Pacific reported yesterday a 28% growth in passenger traffic flown in the first quarter of the year. The low-cost carrier said it carried 1,970,004 passengers in the first quarter, up from 1,541,573 the previous year.

The airline said that its domestic passenger base grew by 32% to 1,590,759 from 1,205,317 a year ago while its international traffic also grew by 11% to 379,245 from 336,246 a year ago, which is a sharp contrast to the projections of IATA.

Lance Gokongwei, the airline CEO said during an ad congress in the Philippines that they are “Inspired by the low-cost carrier models in the United States, we believed that an airline based on the no-frills concept would work here. No hot meals. No newspaper. Mono-class seating. Operating with a single aircraft type. Faster turn around time. It all worked, thus enabling Cebu Pacific to pass on savings to the consumer. How did we do this? By sticking to our philosophy of ‘low cost, great value.’ And we stick to that philosophy to this day.”

The airline started 2009 with a fleet of 25 aircraft. It brought in two new Airbus A320s and two ATR 72-500s in the first quarter. Cebu Pacific also added flights to 11 domestic destinations and to five international points. The busiest day was March 30, when the airline carried 27,740 passengers.

"We will continue to grow our domestic and international operations by adding frequencies and opening new destinations," said Candice A. Iyog, Cebu Pacific vice-president for marketing.

Also, the low cost airline of Malaysia, AirAsia, expects to expand its service and remain resilient this year, as it sees good demand for budget air travel despite the global recession that is putting a strain on the airline industry.

AirAsia's group chief executive and founder, Tony Fernandes, said at a media briefing in Singapore that passenger numbers remained strong despite the global slowdown and there were no plans to slow the pace of its route expansion.

Fernandes says it plans to increase revenue to US$273 million in 2009, up from approximately US$68 million in 2008 and has targeted a tenfold increase in annual revenue by the end of 2010.
The budget airline is aiming to increase its passenger numbers from 250,000 to one million in 2009 as its increases its international network from four to 11 destinations and also says it expects to be among Malaysia's leading companies within five years with more than US$1 billion revenues from 25 planes carrying five million passengers a year.

The airline, along with long-haul associate Air Asia X, will add 10 to 15 new routes this year, including flights from Kuala Lumpur to Sydney, New Delhi and Taipei, and plans to increase the frequency of its newly launched London Stansted flight to a daily service from July this year.

Launched in December 2001 with just two aircraft, AirAsia has since grown to become the region's leading discount airline with an extensive network covering more than 122 routes backed by a fleet of over 70 planes.

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