Cebgo seen accelerating fleet expansion


By Louella Desiderio | The Philippine Star

MANILA, Philippines -  Cebu Pacific subsidiary Cebgo is expected to speed up its fleet expansion this year to be able to launch new routes amid expected growth in the domestic market, according to aviation think tank Centre for Aviation (CAPA).

In its latest analysis focused on Cebgo, CAPA said the carrier is planning to expand its ATR 72 fleet with the addition of six aircraft.

With the delivery of two ATR 72-600 aircraft late last year and another two early this year, Cebgo now has a total of 12 aircraft.

“The LCC (low cost carrier) 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,” CAPA said.

With Cebgo no longer proceeding with the plan to phase out ATR 72-500s this year, its fleet will expand from 10 to 16 aircraft this year, instead of from 10 to 11 aircraft as originally planned.

“A likely bigger factor in delaying the start of the ATR 72-500 phase outs, rather than potential remarketing of aircraft issues, is the situation of relatively favorable conditions in the Philippines domestic market. The Philippines domestic market is an exceptional market in Southeast Asia in that it is undersupplied, while most of the region is suffering from overcapacity,” CAPA said.

It said Cebu Pacific is not expanding its mainline domestic operation this year as the parent airline is waiting for the delivery of the new generation A321neo before resuming expansion.

Cebu Pacific plans to take delivery of its first two A321neos later this year, followed by another 13 aircraft next year.

“By pursuing faster expansion at Cebgo, the group is able to expand its total domestic capacity by approximately three percent without any capacity growth at the parent airline,” CAPA said.

It noted that Cebgo which accounts for 15 percent of the group’s total domestic capacity, is now planning to expand seat capacity by over 20 percent this year.

“Squeezing out some capacity growth is strategically important as domestic demand in the Philippines continues to rise rapidly, driven by strong economic growth,” CAPA said.

Meanwhile, Cebgo is launching four new domestic routes next month to make inter-island travel more accessible to those outside of Metro Manila.

Starting May 15, Cebgo will start operating daily flights between Clark and Caticlan (Boracay) as well as three times weekly flights between Clark and Busuanga and three times weekly flights between Cebu and Busuanga.

The Clark-Busuanga and Cebu-Busuanga flights will be available on Mondays, Wednesdays and Fridays.

On May 16, Cebgo will begin flying between Cebu and Cotabato four times per week or on Tuesdays, Thursdays, Saturdays and Sundays.

“We believe that by opening these new routes, we are enabling more residents from Central and even North Luzon to travel to Palawan and Boracay—two of the world’s best islands, without having to make the trip to Metro Manila to catch their flights. Even guests from the Visayas who would like to explore Northern Palawan have to fly via Manila to get there. With a direct Cebu-Busuanga route, the islands of Coron and Culion are easier to get to,” Cebgo president and CEO Alexander Lao said in a statement.

Apart from promoting domestic tourism, he said the new routes are expected to enhance trade and investment as cargo services are made available by the carrier.