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The Republic of the Philippines is an archipelago comprised of 7,107 islands and is favourably located in Southeast Asia's main trade flows. Air travel is necessitated by the country's many islands spread over a large area. Domestic air travel in the Philippines is convenient and relatively cheap. A host of new domestic carriers have entered the market to bring down prices. The Civil Aviation Authority of the Philippines is charged with providing a safe, reliable and efficient air transport system as well as developing and regulating the technical, operational, safety and security aspects of civil aviation.
Philippine Airlines is the national carrier of The Philippines, with hubs at Manila Ninoy Aquino International Airport and Mactan–Cebu International Airport. The airline operates a network of services within The Philippines as well throughout Asia, North America, Australia and the Pacific. There are five main competing commercial airlines serving the domestic market: Cebu Pacific, Philippine Airlines Express, Airphil Express, Zest Airways and South East Asian Airlines.
Airports in Philippines
3,069 total articles
114 total articles
Hawaiian Airlines is still awaiting the rewards of network diversification it undertook a few years ago with the launch of several new Asian routes along with flights to Auckland and Brisbane. The effort was designed to offset Hawaiian’s dependence on service to the US mainland, which has become increasingly competitive during the last few years.
The rapid-fire route introductions have been plagued by currency weakness in Japan, retaliatory competitive capacity additions and Hawaiian’s spooling up in understanding the distinctive nuances of each market. At the same time overcapacity in its North American markets – which still comprise the majority of its revenues – continues to pressure Hawaiian’s performance.
As those challenges continue to cast a spectre on Hawaiian’s performance, the carrier has reversed its fortunes within its inter-island network, which weakened during 2012 when Hawaiian made a push from Maui and overestimated the capacity it needed to build a hub in Kahului.
Tiger Airways has narrowed its losses in the year to 31-Mar-2013 and extended its operating profit to a second consecutive quarter while forecasting a positive operating result by mid-Jul-2013 after the sale of 60% of Tiger Australia to Virgin Australia is completed.
The carrier also plans to add frequencies to high demand routes between Singapore and Malaysia and expects to take delivery of 10 A320 during the financial year, half of which will be allocated to the Singapore operation and the remainder between Tiger Australia and two associated airlines, Mandala and SEAir.
Tiger Singapore will use the aircraft to increase capacity by about 25% by the end of FY2014 and taking advantage of expanded bilateral rights between Singapore and Indonesia which will also boost Mandala. However, the group still faces significant challenges as it strives to nurture three affiliated carriers in Australia, Malaysia and the Philippines to profitability.
Cambodia Angkor Air is planning rapid fleet and network expansion as competition intensifies in the Cambodian market. The Cambodian flag carrier is expected to more than double its fleet by the end of 2015 and launch services to several new markets, including mainland China, Hong Kong, India and South Korea. Cambodia Angkor Air was established in 2009 as a joint venture with Vietnam Airlines but remains one of the smallest flag carriers in Southeast Asia, only operating domestically and to two neighbouring countries.
Cambodia Angkor Air has already seen its most dramatic expansion in its four-year history, launching three international routes over the last six months. Further rapid expansion of Cambodia Angkor Air and the planned launch of a second Cambodian scheduled carrier that will be affiliated with Philippine Airlines (PAL) should lead to more rapid growth in the Cambodian market. The Cambodian passenger market grew by 18% in 2012 and by 21% in 1Q2013, based on figures from Cambodia Airports.
This is the second of a series of articles on Australia’s need to urgently negotiate expanded bilateral agreements. The first part looked at bilateral constraints in some key North Asian markets, in particular mainland China and Hong Kong, as well as with the United Arab Emirates. This part looks at constraints in Australia currently facing carriers from Southeast Asia, particularly Malaysia and the Philippines.
Australia is an important and generally profitable market for airlines from Malaysia and the Philippines, as well as other Southeast Asian countries that have fewer or no limitations on expansion. Australia needs to negotiate new air service agreements with Malaysia and the Philippines or risk having their airlines focus expansion on other destinations.
This is the fifth and final instalment in a series of analysis articles on the Philippines market. The first part analysed the strong position of Philippine market leader Cebu Pacific. The second part looked at the tie-up between LCCs Zest Air and AirAsia Philippines, which along with Tiger affiliate SEAir compete with Cebu Pacific in the fast-growing budget end of the market. The third part looked at the outlook for Philippine Airlines (PAL) in the domestic market, including the recent decision by the group to abandon the low-cost model at sister carrier AirPhil/PAL Express. The fourth part looked at PAL’s position in the international market. This part examines the opportunities in the dynamic Philippine regional market as a result of consolidation and rationalisation in the domestic market.
Regional carriers have traditionally played an important role in the Philippines as several domestic airports, including some of the country’s most popular tourism destinations such as Boracay, cannot be accessed with Airbus or Boeing aircraft. Even some of the country’s low-cost carriers operate turboprops, abandoning the normal single aircraft type mantra of the LCC model, recognising the unique needs of the Philippine market.
This is the fourth part of a series of articles on the 2013 outlook for Philippine carriers. The third part, published on 3-Apr-2013, analysed the bleak outlook in the domestic market for the Philippine Airline (PAL) Group following its decision to exit the budget sector by transitioning PAL Express, formerly known as AirPhil, from low-cost to full-service regional carrier. This part looks at the international outlook for PAL, which has improved since a determination from ICAO in Mar-2013 that the Philippine authorities are now in compliance with its safety standards.
The ICAO determination should lead to the Philippines being removed from the EU blacklist and upgraded to Category 1 status by the US FAA, opening up expansion opportunities for PAL’s long-haul operation. But the ICAO determination could also lead to new competition in the Philippines to Japan, South Korea and US markets.
PAL now faces only very limited competition from other Philippine carriers to Japan and no competition from local carriers in long-haul markets. But Cebu Pacific and other Philippine LCCs plan to pursue rapid expansion of their international operations regionally and, in the case of Cebu Pacific, in the medium/long-haul market.