AirAsia Philippines called for the Civil Aeronautics Board (CAB) to reverse recent policy changes which will prevent domestic carriers in the Philippines from overbooking services and force airlines to refund all passengers unable to take their scheduled flights (Philippine Daily Inquirer, 11-Jun-2012). AirAsia stated, “The CAB resolution violates Air Asia’s right to equal protection under the law since it is made applicable only to domestic air carriers and exempts compliance by foreign airlines”. The LCC also said the restrictions are likely to lead to increased fares.
AirAsia Philippines calls for CAB to reverse recent policy changes
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Cebu Pacific Air evaluates A350s, 787s & A330neos to support new long haul flights to US west coast
This is Part 4 in a series of analysis reports on the Philippine market.
Cebu Pacific Air has begun evaluating new-generation widebody aircraft with the objective of launching flights to the west coast of the US. The Philippine LCC is studying the A350, 787 and A330neo and plans to issue a formal tender to Airbus and Boeing in 3Q2017.
Cebu Pacific launched its long haul operation in 2013, with A330-300 services to Dubai. It now operates five long haul routes to the Middle East and Australia and also uses its A330 fleet on several short haul routes.
The airline is slated to take its eighth and final A330-300 in 1H2017, completing the first phase of its widebody strategy. Phase two of Cebu Pacific’s long haul strategy has always been to transition to a new longer-range widebody type and launch flights to California, which has the largest Filipino community not already served by Cebu Pacific. With new aircraft technology now available, and rival Philippine Airlines (PAL) pursuing rapid expansion in the US market, it is time for Cebu Pacific to strategically make its move.
Philippines-China air service growth to lift Philippines' Chinese tourism as Duterte changes horses
First bananas, then people. China's lifting of a trade ban against bananas from the Philippines bodes well for aviation. Relations between China and the Philippines turned negative in 2012. The issue was primarily over China's claims to uninhabited islands – a debate that also caused China-Japan relations to turn sour. China banned Filipino banana imports and issued a travel warning against the Philippines. Travel warnings from China carry more weight than in other markets since state-owned/linked travel agencies essentially stop selling the impacted market. Diplomatic rows have resulted in drastic reductions in outbound passenger flows from China.
Japan has more than recovered but the Philippines' underexposure to China is well evident: the Philippines has received the least number of Chinese tourists in Asia. Laos and Cambodia, far smaller than the Philippines, each received more Chinese tourists than the Philippines.
New Filipino President Rodrigo Duterte is pivoting Manila's allegiance away from the US – to China. His presidency is young and the calculation has its sceptics, but China appears to be warming. Following the lifting of its ban on banana trade, China is expected to use President Duterte's visit to Beijing to lift its travel warning against the Philippines. This will likely stimulate large air service growth between China and the Philippines. Yet for existing markets, there is some concern that the Philippines presents new competition.