Philippines' Civil Aeronautics Board (CAB) eased airline restrictions it recently put in place following appeals by AirAsia Philippines, Cebu Pacific and Zest Airways who argued the policies were discriminatory as they only applied to local carriers (Business World Online, 14-Jun-2012). The restrictions prohibited carriers from overbooking flights and prevented airlines from not allowing refunds or rebookings to passengers on budget tickets. Under the relaxed rules which take effect from 14-Jun-2012, local carriers will be able to overbook services to up to 5% of flight capacity (reduced from previous industry practice of 10%) and passengers who wish to receive a refund or rebook their services must submit their request at least 24 hours before the estimated time of departure.
Philippines CAB eases recent airline restrictions
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Cebgo has already expanded its fleet by four aircraft over the past six months, for a total of 12 aircraft, with two ATR 72-600 deliveries in late 2016 and two more deliveries in early 2017. The LCC has used the additional aircraft to launch 10 new routes, including seven entirely new routes for the group and three routes previously served by big sister Cebu Pacific Air.
Cebgo plans to take delivery of another four ATR 72-600s by the end of 2017, while it has delayed the phase out of five ATR 72-500s. Cebgo’s seat capacity will increase by more than 20% in 2017, driving a 3% increase in domestic capacity at Cebu Pacific Group as mainline capacity will be flat.
Southeast Asia aviation outlook: passenger growth accelerates, led by Vietnam, Myanmar and Malaysia
Southeast Asia’s aviation market recorded healthy growth in 2016, with passenger traffic expanding faster than the global average across nearly every country in the region. Six of Southeast Asia’s 10 countries had growth in or near the double digits, led by Vietnam and Myanmar. Seven countries had growth equal to, or higher than, in 2015.
Southeast Asia should continue to experience rapid growth in 2017 and beyond. Vietnam and Myanmar will likely again lead the pack in 2017, joined by Malaysia. The Philippines should experience growth of approximately 10% for the third consecutive year, also putting it towards the top of the pack.
However, overcapacity remains a long term concern, pressuring yields and profitability. The average profit margin of the Southeast Asian airline sector significantly lagged the global average in 2016, and this trend will likely continue in 2017.