Rivals Thrive as PAL Drifts Away

People’s Journal
Monday, September 21, 1998

AS NATIONAL flag-carrier Philippine Airlines zooms into the sunset of its market more-than-half a century of operations, smaller but aggressive rivals in the domestic routes are going full throttle in slicing up their share of the pie in the sky.

Cebu Pacific Air, for instance, has firmed up its rank as the second biggest local airline and now even leads the field on some routes in terms of number of passengers and market share.

Diego Garrido, Cebu Air Senior Vice President, said the two-year-old airline has made its mark by pioneering in low fares and posting the best on-time performance.

"We have made flying affordable to more people by passing on to them our lower costs of operations," Garrido said.

He added, "We have created our own market base and even attracted a good number of flyers from other airlines as well."

Based on data from the Manila Domestic Airport and the Civil Aeronautic Board for the month of August, the country's four major commercial airlines flew 331,656 passengers on eight major routes in Visayas and Mindanao while total capacity stood at 463,171 seats.

Cebu Pacific accounted for one-third of the passengers (114,991), a 31-percent jump from the August 1997 level although its seal capacity rose by only 27 percent.

PAL flew 160,997 passengers on a capacity of 210,392 seats. PAL had a market share of 48.5 percent; Cebu Pacific had 35 percent.

On the premier Manila-Cebu route, 117,531 passengers flew in August, of which almost 33,000 took Cebu Pacific which deployed 41,100 seats. This represented a plane load factor of 79 percent.

PAL flew twice as many passengers (66,479) and deployed even more seats (95598) for a load factor of 70 percent.

Garrido said Cebu Pacific operates at optimum efficiency because it has just the right number of employes and uses only one type of aircraft which leads to lower operating and maintenance cents

It has also jobbed out certain activities such as ground handling which could be handled more efficiently by companies that are already in that business, he said.

He also said Cebu Pacific follows the maintenance procedures used in the linked States and recommended by the aircraft manufacturer, adding that this is one major reason why the airline has been posting the best on-time performance in the industry.

For August, Cebu Pacific posted an on-time performance of 82 percent. This goes up to 91 percent if the 15-minute Industry allowance is applied.

He said the airline is working on raising this further especially because on-time reliability attracts the frequent flyers, the businessmen and the executives.