7-Sep-2012 2:56 AM

LCCs forced to cope with extremely high ground handling costs in Japan: Cebu

Cebu Pacific CEO advisor Garry Kingshott, speaking at CAPA's LCCs & New Age Airlines in North Asia Conference in Macau, stated (06-Sep-2012) the carrier's ground handling costs at Osaka Kansai, its only Japanese destination, are 10 times higher per turnaround than Singapore Changi. "And that's a heavily negotiated rate, way below what full service carriers are paying," he said. He added LCCs operating to or within Japan have no choice but to pay higher costs than other markets as Japanese airport service providers are less efficient and pay employees more than providers in other Asian markets. "These people are extremely high paid – everyone that touches your airplane or your boarding passes or bag tags are earning a lot of money," Mr Kingshott explained. He added ground handlers in Singapore also pay their staff relatively high wages but "are far more efficient and far more competitive".

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