PAL Rival Sees Opportunities

Malaya
Friday, September 18,1998
By Irma Isip

With the planned closure of the Philippine Airlines and the expected grounding of another domestic airline starting tomorrow, no frills Cebu Pacific is in the strongest to grab market leadership in the highly competitive industry.

Diego Garrido, Cebu Pacific Senior Vice President and General Manager, said while the closure of PAL after 57 years is sad, it offers Cebu Pacific a clear opportunity to improve market share.

Garruido, however, said even before the decision to close PAL, the Gokongwei-owned airline had been vigorously looking at growth opportunities.

“We have been looking at our share… and our capacity with seven aircraft. What we are trying to do is beef up our schedule to see how many more we can put up in the market,” Garruido said.

But he said the void to be left by PAL’s closure may not be filled by other airlines.

“It’s not easy to get planes overnight,” Garrido said.

He said Cebu Pacific has been slugging it out intensely with PAL since the latter’s downsizing.

He said Cebu Pacific was able to capture 32 percent of the riding capacity with 154,769 passengers in eight major destinations where both firms operated as of August.

PAL had 45 percent with 210,392 passengers. Air Philippines, at third, had 20 percent or 94,558.

“We believe we can get at 50 percent of the market,” Garrido said.

Garrido said Cebu Pacific is waiting for the delivery by Oct. 16 of the first two DC-9s it will be leasing from Air Canada. The other will be delivered in December.

The additional planes will beef up the seven DC-9 fleet the company uses in flying to Cebu, Bacolod, Davao, Iloilo, Cagayan de Oro, among other points.

“Right now, the market is soft. We, at Cebu Pacific and PAL are running at a 76 percent load factor,” Garrido said.