Philippine Government Offers Incentives at Cebu International Airport

In a further effort to help decongest Ninoy Aquino International Airport in Manila, the Philippine government is planning to offer perks to provide greater incentive for airlines to operate more flights from Cebu. A public meeting is set for May 20, where an incentive plan will be presented regarding take-off and landing fees.

cebu airport
Copyright Photo: D.Wilson/PPSG
According to Nigel Villarete, General Manager of the Mactan-Cebu International Airport Authority, carriers can expect rebates between 30 and 75 percent on landing and take-off fees for long-haul international routes, and 30 to 65 percent discounts on short to medium-haul routes. However, the discounts will vary based on the number of flights offered per week.

Rebates will also be offered on domestic flights operated out of the country's second busiest airport. Villarete added that rebates can be expected between 25 to 65 percent on all landing and take-off fees for domestic routes based on the frequency of flights.

The news is welcome for carriers such as AirAsia Philippines and Philippine Airlines that have been looking to expand further at Mactan-Cebu International Airport. Philippine Airlines recently resumed six domestic routes from Cebu that had been cancelled in early 2014 under the leadership of San Miguel Corporation. Following the shift in management back to Lucio Tan Group, Philippine Airlines re-launched services at the end of March 2015 from Cebu to Butuan, Bacolod, Cagayan de Oro, Iloilo, Davao, and Tacloban.

Meanwhile, AirAsia Philippines has been concentrating on expanding its international operations from secondary cities in the country such as Cebu. The budget carrier sees potential to stimulate growth in underserved markets. AirAsia currently operates three domestic routes from Cebu to Manila, Davao, and Cagayan de Oro. The carrier also offers international services from Cebu to Kuala Lumpur, Kota Kinabalu, and Seoul.

AirAsia has increased its seat capacity in Cebu by 45 percent in the last year alone. According to the Centre for Asia Pacific Aviation, AirAsia Group now offers nearly 30,000 weekly seats from Cebu compared to just over 20,000 seats a year earlier. AirAsia has indicated that further expansion is intended for Cebu in 2015 including new international services to Singapore, Japan, and Hong Kong. 

AirAsia currently holds a 14 percent share of total seat capacity at the airport. Although competition from Cebu Pacific and Philippine Airlines is intense, AirAsia has plenty of room to expand in Cebu unlike at its primary hub in Manila.  

A total of thirteen carriers currently operate out of Mactan-Cebu International Airport with Philippine Airlines and Cebu Pacific, holding the largest share of seat capacity at present. The airport sees an average of 154 commercial aircraft landings and take-offs each day. In 2014, the airport served 6.84 million domestic and international passengers.

3 comments:

  1. Why now,they should do it years ago...

    ReplyDelete
  2. Cebu Mactan is unarguably a stress free way to enter and exit Philippines. Many holidaymakers only need to visit Manila in one direction, if at all, especially if their focus is on sea and sand, but most businessmen and women have Metro Manila on their itinerary.

    The problem is that international flights into and out of Cebu may therefore be lower yielding per seat due to the almost complete lack of business travel. This however must be gradually changing as more BPO and call centres open in Cebu, Davao, Cagayan de Oro and so on. Cities like Iloilo, Bacold and GenSan are growing fast so this also creates opportunity as anyone travelling to or from these provinces does not have to go through Metro Manila.

    Airlines such as Emirates, Qantas and Singapore Airlines as well as Philippine Airlines need to consider running international flights to and from Mactan, not just concentrating on Manila. The travel trade (including online booking sites) and travellers from overseas would need education about why using Cebu is preferable but this is achievable: look at the growth in nonstop flights from overseas to Phuket, Thailand for instance.

    ReplyDelete
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