Hawaiian Airlines

New Cebu Pacific long-haul operation could push out Philippine Airlines but may require hybrid model

The new plan from leading low-cost Filipino carrier Cebu Pacific to offer long-haul services from 3Q2013 represents not just the fourth low-cost long-haul operation in Asia, but the first time such a carrier has potential to force a full-service rival – Philippine Airlines (PAL) – out of business.

Cebu Pacific will benefit from the Philippines’ extremely price sensitive market that has seen LCCs achieve a staggering 80% share of the domestic market and a fast-growing share of the regional international market. Demand for low-cost long-haul services will come primarily from the large visiting friends and relative (VFR) and migrant worker market. But Cebu’s new low-cost long-haul operation will also benefit from growing tourism and potentially the ability to transfer passengers over a geographically convenient hub if Cebu decides to stray from its original point-to-point model.

While PAL is the nation’s sole long-haul carrier, its lack of global alliance membership, relatively small domestic operation and higher cost base create low barriers for entry. National sentiment for Asia’s oldest airline may run high, but as seen in the Philippines’ domestic market, passengers vote with wallets.

US airlines to report increasing revenue and strong demand

The distressing economic news this summer made September important in signaling how the US airline industry is performance. Judging from the early operational reports and 3Q2011 guidance issued, traffic and demand are defying the gloom offered by Wall Street and Washington. Indeed, air travel demand is expected to remain strong, which bodes well for the industry's bottom line given the fact capacity continues to tighten.

Still, US airlines are not sanguine about the state of the industry, with most not only pulling capacity in the fourth quarter but signaling the same for 2012 when a number of carriers will be taking delivery of new aircraft but keeping capacity flat. That capacity discipline, in evidence since early Spring when fuel continued its climb, meant the USD6-10 fare hike imposed in mid-September stuck and will likely segue into future hikes as demand remains strong on increasingly tight capacity. For now the hike applies to last minute tickets.

Hawaiian posts profit in a sea of industry red ink

Hawaiian posted a net profit of USD855,000 on operating revenues of USD365.6 million, up 22.5% year-on-year, at a time when the clouds over its first quarter included rising fuel and the triple Japanese disasters.

US carriers remain cautious with capacity plans, domestic capacity shrinking

North American carriers continue to be cautious in their capacity plans for 2011, with 2010 showing that careful capacity management can have a positive effect on load factors, yields and profitability. This focus on the protection of yields has become increasing important again as escalating fuel costs threaten the global aviation industry’s profits and carriers’ yields.

US network carriers’ Asia Pacific load factors slump in Mar-2011 as Japan disaster felt

American Airlines and Delta Air Lines have revealed sharp declines in Asia Pacific load factors following the 11-Mar-2011 earthquake/tsunami/nuclear concerns in Japan. The load factor declines occurred as both carriers significantly expanded Asia Pacific capacity to record-high levels - a situation now being unwound on services to Japan.

Japan crisis: Travellers urged to leave Tokyo, air fares spike, flights cut. 71 airlines hit

For travellers and local residents, the situation in Tokyo is deteriorating amid rolling power cuts, infrastructure problems and ongoing aftershocks, while rising concerns over the Fukushima nuclear plant has prompted several governments around the world to advise its residents to avoid travelling to Tokyo or leave the city/country entirely.