CEB's Long Haul Future Dim

22 January 2013

Cebu Pacific’s performance on the long haul route proved to be dismal on its first month of operation to the middle east after the airline registered average load factor of 36% only despite nine months of marketing lead time.  

In a disclosure to its stockholders, Cebu Pacific said that it carried about 10,000 passengers to and from Dubai during this period short of the 27,000 the airline was expected to carry. Although it reported better figures for November and December, typical peak travel time for the Filipino migrants in the Middle East to the Philippines, the subsequent months booking proved to be a challenge despite low fares.

Its forward bookings for the first quarter of 2014 were weak, with only 20% of available seats sold prompting the airline to reduce daily frequency to five times a week beginning on the last week of January until March.

Cebu Pacific flew 14.35 million passengers in 2013 (11.04 million were domestic, up an annual 7.6%, while 3.31 million were international, 10.7% higher on year.), up 8.3% from the previous year. The airline was targeting 15 million passengers in 2013.

Analyst suggest the low turnout to be cause by  huge seasonal fluctuations and market conditions of Filipino migrant workers whose ticket purchasing is done through their labor contractors. Only few of these workers purchase their tickets independently and fly low cost airlines.

The airline saw profit fall 70.8% to P664.081 million as of September last year from P2.274 billion in the same nine months in 2012.


  1. Paano na yung mga orders ng CEB para sa A330?

    At kamusta raw yung performance ng PAL at PALex sa UAE?

  2. The faith of PAL will not be different like CJ, if they cannot penetrate the OFW's employers in UAE etc who decides and purchase their airline tickets. However, it will be very difficult to get a big portion of the PAX market because their Middle East employers will patronize and apply the rule of protectionism before OAL's.

  3. Punuan daw sa PAL/PALex...

  4. Excellent post and good summary of the situation at hand. CAPA posted a part-II segment on this topic today, which assesses the potential of some of the other long-haul markets CEBU is seeking to access (Australia, Qatar, Saudi Arabia, Oman and Kuwait):

    Also, I really like this blog. Are you guys on twitter? I'd like a means to follow it more regularly. Thanks!

    Rohan ( blogger, 'aeRO'space'):