Manila Ninoy Aquino International Airport

Philippine Airlines plans to resume domestic expansion and looks for green light from US regulators

Philippine Airlines (PAL) is not ready to abandon the domestic market – at least not yet. The floundering flag carrier, which has seen its share of the Philippine domestic steadily slip in recent years, plans to add back some domestic capacity in 2012 as its previously-reduced A320 fleet expands again by four aircraft.

International capacity will also be up in 2012 as PAL takes its next batch of B777-300ERs. PAL is banking on the Philippines regaining next year a Category 1 safety rating from the US FAA, which is necessary for the carrier to deploy B777-300ERs on US routes as planned. Continued restrictions on US routes is one of several challenges PAL faces as the carrier also tries to overcome increasing competition from LCCs and continuing worker protests.

Cebu Pacific & AirPhil are main beneficiaries as Philippines domestic LCC penetration rate nears 80%

The low-cost carrier penetration rate in the fast-growing domestic Philippine market is about to reach 80%, a remarkable achievement and a figure unprecedented in the global aviation industry. An LCC penetration rate of 85% is even plausible in the foreseeable future as Philippine LCCs, led by Cebu Pacific and AirPhil Express, are rapidly expanding domestically while flag carrier Philippine Airlines (PAL) continues to reduce domestic capacity.

LCC competition in the Philippine international market is expected to increase significantly, driven primarily by the launch of AirAsia Philippines, which was originally planned for this month but has encountered last second delays. Domestic competition, however, is not likely to increase as AirAsia Philippines and the proposed Tiger Airways-SEAir joint venture face uphill battles in their attempt to secure authorisations for domestic operations. While international routes linking the Philippines with other Asian countries could see intense competition from five or more LCCs, the domestic market will likely be served by two or at most three LCCs in future.

Jetstar's new North Asia focus leaves room for Qantas Singapore expansion to Europe and India

Jetstar is planning to expand its Singapore-based fleet by 50% over the next six months as the low-cost carrier group looks to North Asia for the next phase of its dramatic expansion. As the largest low-cost airline group in the Asia-Pacific region continues to expand at a rate of about 20% per annum, additional capacity will not be directed west towards South Asia, the Middle East or Europe but primarily to North Asia, where Jetstar sees the most opportunities given North Asia’s very low LCC penetration rate. This strategy could signal growth for the Qantas brand in South Asia and Europe as the group looks at potentially announcing next month the launch of a new Singapore-based full-service carrier.

A321neo order supports further international expansion at Cebu Pacific

Cebu Pacific is looking to accelerate its international expansion and open up new medium-haul routes to Australia, India and Japan following its order this week for 37 additional Airbus A320 aircraft. The order also cements Cebu Pacific’s position as the largest low-cost carrier (LCC) in the Philippines as competition in the market intensifies significantly.

Tiger Airways foreshadows continued growth after handling 6 million pax in FY2011

Tiger Airways stated it handled 6.0 million passengers in the 12 months to 31-Mar-2011. Average load factor in the period rose 1ppt to 86%. The carrier stated the growth trajectory shows that passengers are supporting LCCs.

Japan crisis has major impact on regional travel and tourism flows

The events in Japan have had a “major impact on regional travel and tourism flows”, Association of Asia Pacific Aviation (AAPA) Director General, Andrew Herdman has said. He noted that Japan represents 6.5% of worldwide scheduled air traffic and accounts for a fifth of traffic within the Asia Pacific region.