5J cleared to fly Beijeng

By Lenie Lectura
Business Mirror

January 19, 2010

CEBU Air Inc., which operates carrier Cebu Pacific, has hurdled the first half of the accreditation process to realize its plan to mount flights to Beijing.

Civil Aviation Board (CAB) executive director Carmelo Arcilla said the agency approved the airline’s request during the agency’s recent en banc meeting. “We already approved it but their application needs to be approved by the aviation officials in Beijing because it is a two-way process,” he said in an interview yesterday.

Cebu Pacific is Asia’s third-largest low-cost carrier. The CAB official said the Gokongwei-owned airline wants to service the route three times weekly.

The airline, in its application, will utilize the Airbus A320 units to service the new route in China.

Cebu Pacific already flies to 14 other international destinations, namely: Kota Kinabalu, Kuala Lumpur, Taipei, Incheon, Busan, Osaka, Shanghai, Guangzhou, Hong Kong, Macau, Singapore, Ho Chi Minh, Jakarta and Bangkok.

The low-cost carrier claims to have the country’s youngest aircraft fleet, composed of 21 Airbus A320 and 8 ATR72-500 aircraft.

The airline’s vice president for marketing and distribution Candice Iyog said in a separate interview that Cebu Pacific has yet to be informed by the CAB of its decision and that no date has been set as to when the airline will start flights to Beijing.

“At the moment, [Beijing] is still part of our route network study since we haven’t got any confirmation yet,” she said.

It usually takes at least three months from the time of the approval of the application from both countries before Cebu Pacific can start mounting flights to new destinations.

“There’s a lot to work on. It’s still a long wait away. We have to look into the setup of distribution channels, availability of aircraft and the needed time to sell the new route. First and foremost we need to obtain the rights which we did by filing an application and from there we will work on the final details upon approval,” said Iyog.

The airline has pending applications to service new destinations such as Brunei and Australia and new routes in Japan.

Cebu Pacific swung to profitability in the third quarter of last year, posting a net income of P1.78 billion against a net loss of P1.87 billion in the same period in 2008.

Revenues hit P16.22 billion during the first nine months last year, a 16.1- percent growth over last year’s P13.98 billion brought about by additional routes, increase in flight frequencies and capacity increase due to additional three Airbus A320 and five ATR72-500 acquired in recent months.

The peso appreciation in September 2009 brought about a foreign exchange gain of P25.65 million in 2009 compared to a foreign exchange loss of P1.57 billion recorded for the same period last year. Fuel hedging for the nine months in 2009 also recognized a gain amounting to P534.12 million from a loss of P485.08 million for the same period last year. All these factors contributed to the turnaround of the airline’s bottomline.

At end-September last year, Cebu Pacific carried 5.35 million passengers or a 38.2-percent increase compared in the same period last year.