Cebu Pacific A330: World's First Flying Bus

With the first photos of Cebu Pacific’s brand new Airbus A330-300 just released, many in the aviation industry are growing eager with anticipation of what can be expected of the long-haul service of this highly successful low-cost Philippine airline.

Cebu Pacific transformed Philippine skies forever when it introduced its low-cost budget friendly service throughout the Philippines and Southeast Asia. Fast forward several years and many new budget carriers later and Cebu Pacific is looking to revolutionize the aviation industry once again as it prepares to enter the long-haul budget air travel market.

Highest Density A330 in the World - 436 Seats
Photo Source: DoubleDecker.Boards.net

Few carriers have been successful in launching long-haul low cost products. Jetstar and Air Asia X are a couple of airlines that come to mind that have managed to carve a niche for itself in the budget long haul market surviving intense competition. But it didn’t come without failure. Air Asia X attempted to launch a Europe-Asia budget service from its base in Kuala Lumpur but had to cancel the routes in March 2011 due to poor economics. Today it concentrates more on services to Australia, China, and Japan. But Cebu Pacific sees a window of opportunity with the strong demand from the vast Philippines overseas foreign worker market. It is scheduled to launch its first flight to Dubai in October 2013. It has also set its sights on Australia, Honolulu, and destinations in Europe. Whether they will be successful or not remains to be seen with seat sale fares between Dubai and Manila being offered for as little as $250USD round-trip inclusive of taxes and fees.

Perhaps what makes Cebu Pacific’s attempt unique compared to its predecessors is that it is approaching long-haul with a unique model. Not only does it get to tap into a targeted Filipino overseas foreign worker market hungry for cheap airfares but it also gets a competitive advantage enjoying a much lower cost base being a Philippine carrier. But perhaps the single most anticipated and unique characteristic of Cebu Pacific’s plans is to maximize the seat capacity of the Airbus A330-300 installing what will become “the highest seat density in the world” for that aircraft type at 436 seats. After all, the carrier is targeting the cost-conscious migrant Filipino worker but whether the low fares will be able to sway the rest of the market remains to be seen. Unlike Air Asia X, Cebu Pacific will be operating in a single-class configuration leaving very little choice for Westerners who might like to pay more for additional legroom. After all, what is bearable for a 2 hour flight may not be tolerable for an 8 hour segment. By comparison, Philippine Airlines carries only 300 seats on board their fleet of A330-300 aircraft in a multi-class configuration while Air Asia X carries 377 seats in a two-class configuration. But Cebu Pacific intends to alleviate those concerns by segmenting seat selection by location. Bulkhead and exit row seats will be sold as "Premium" seats and will offer the most generous legroom as is standard with most airlines while a dedicated "Standard Plus" section at the rear of the aircraft will offer seats with a 32" pitch - the equivalent of average standard economy in a regular carrier like Philippine Airlines and even budget carrier Air Asia X. In addition, the service will be completely a-la-carte based with passengers being required to pay extra for everything from luggage to meals and in-flight entertainment. Ultimately, Cebu Pacific may have succeeded in creating what will be the world’s first flying bus.

If the business model is successful and comfort is bearable, Cebu Pacific could become a game changer in the airline industry if it manages to capture cost conscious leisure travellers travelling between Europe and Asia as the opportunity will be present to convert its base at Manila airport into a transit hub enabling tourists from Europe to connect to Cebu Pacific’s extensive Asian network and to destinations like Australia. But the question remains if Cebu Pacific will be able to make the economics work and if the seat configuration will appeal or even be bearable to the mass market of European travellers in order to sway them from traditional carriers. Otherwise, Cebu Pacific may be limiting its market to a narrow segment. Either way, if they can make the economics work, they will have accomplished a challenge in the global airline industry that few can make claim to. But there is no doubt that others won’t be far behind and Air Asia X will be closely monitoring the progress of this new long haul division.   

Cebu Pacific has a total of eight A330-300’s on the way with the first scheduled to arrive next month in June 2013 and a second to follow in September. While the first long-haul flight service is scheduled for Dubai, it is expected that Melbourne, Australia will be second as Avalon Airport has confirmed it will be hosting a Philippine carrier in the near future.

Geven High Density Seating

Although Cebu Pacific has not disclosed who will be manufacturing the seats on board its new aircraft, it was rumoured that Italian manufacturer Geven’s high density seating was one of the contenders. Cebu Pacific indicates on its website that it will be offering a 30-inch seat pitch to its passengers booked in "Standard" seats compared to 32 inches offered by Air Asia X in its budget economy product. But perhaps one amenity that may compensate travellers for the cramped quarters will be Cebu Pacific’s intention to offer an in-flight WiFi product on board the A330 aircraft. Meanwhile, Lance Gokongwei, CEO of Cebu Pacific believes that the carrier will be offering the lowest fares possible on point to point flights for the nearly 11 million Filipino overseas foreign workers. That equates to roughly one out of every ten members of the population. Gokongwei stated in an interview with apex blog that when considering long-haul routes, the cost differential to passengers must be 30% better than competing carriers in order for Cebu Pacific to pursue the service.

If a 30% discount is the formula Gokongwei believes is the secret to attracting people to sacrifice comfort and switch from traditional carriers, he may just be the visionary the budget travel market has been waiting for. While the world’s aviation watchdogs anticipate the launch of this revolutionary service, existing budget long-haul carriers Scoot and Air Asia X remain cautiously optimistic. Management of both airlines do not believe that Europe is a particularly attractive proposition for their airlines. But if Gokongwei can make the Middle East, and Australia work, there is no doubt that Europe won’t be far behind. Cebu Pacific might just end up going down in the aviation industry as “the little airline that could.”