Canada

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.

Air Canada and American Airlines: former Air Canada CEO on the 1980s UK-Canada bilateral dispute

On 30-Nov-2011, CAPA published an article by Chris Lyle entitled American Airlines Goes Broke: Can a National Airline be allowed to Fail?

Here former Air Canada President and CEO, Pierre Jeanniot, offers an alternative view of realpolitik and corrects the record on one of the more contentious bilateral disputes of all time - between Canada and the UK in the 1980s. The Canadian government has not always displayed the protectionist face it does today and in that confrontation, the UK government showed how it too could look after its own in a good old-fashioned tit-for-tat battle. One outcome was that Canada took the extreme step of withdrawing from the 1944 International Air Services Transit Agreement, thus removing British airlines' privileges to overfly Canadian territory en route to the US. Sanity eventually prevailed.

WestJet and New York. Moving in a new direction?

The announcement last week that WestJet had successfully bid for eight slots at New York’s LaGuardia airport, along with its press release that indicated a new focus on “increased business travel in the East”, may signal a new phase in the airline’s development.

American Airlines goes broke: Can a 'national' airline be allowed to fail?

As American Airlines becomes the last major US airline to seek Chapter 11 Bankruptcy protection, the issue of airline reconstruction and the basic role of airlines in the national economic and social equation remains a very real one for policy makers. In this timely article, Chris Lyle of Air Transport Economics gives a Canadian perspective.

The vast majority of the world’s airlines are today privately owned. This includes most former “national” carriers which have been turned over by their governments to private ownership. And yet, in an era of globalization and transnationalism, when it comes to economic regulation, the “flag” carriers are still mollycoddled with a lean towards jingoism.

There are two principal reasons why this happens. The first is provisions in national law and notably in the vast majority of bilateral air services agreements which preclude majority ownership and effective control of a carrier from one country by parties from another country.

Ontario may want out of Los Angeles World Airport’s control

All of California’s secondary airports, in both the Los Angeles and San Francisco regions, have been hard hit since the economic collapse as airlines retrenched at the major hub. But LA/Ontario International Airport (ONT), 35 miles east of downtown Los Angeles, has been particularly hard hit to the extent that some are calling for its release from Los Angeles World Airports (LAWA).