After the groundbreaking announcement by low-cost carrier (LCC) Cebu Pacific, which set a new record in the Philippine aviation industry with the largest commercial aircraft order, there’s much to learn. The airline signed a memorandum of understanding for 104 A321neos and purchase rights for 50 A320neo family jets, effectively planning to double their current fleet for future expansion.
As the country witnesses this significant milestone, other airlines can take valuable lessons from Cebu Pacific’s strategic moves to enhance their own growth and contribute to the development of tourism, trade, and the aviation sector in the Philippines.
Here are some lessons other airlines based in the Philippines can learn from the steps the carrier is taking for its future.
A huge fleet is a need
When an airline wants to expand and ramp up its frequencies on its routes due to growing demand, new aircraft are essential to provide enough flights and ensure the fleet is ready to handle any situation that may arise. By ordering a large number of aircraft, an airline ensures it can provide enough flights and seats for passengers, while also having aircraft on standby in case of any issues with a particular aircraft.
In the past, airlines in the Philippines only ordered small quantities of aircraft. To be fair, most airports in the country could not handle large number of aircraft and passengers. With the New Manila International Airport (NMIA) nearing its opening and other airports receiving upgrades and enhancements to cater to more passengers, it becomes a different story.
Securing slots in aircraft production is important today as airlines continue to place large aircraft orders. If other carriers cannot secure their slots early, they might miss opportunities in the coming years. Delivery delays are also expected if airlines do not plan ahead when acquiring new aircraft. As more time passes, the line becomes longer. Aside from the quantity, airlines also need modern and fuel-efficient aircraft, which result in cheaper operating costs and flight tickets for passengers.
Modern aircraft also offer more options in their configuration and features, which airlines can explore to provide good service and carry more passengers, essential for slot-constrained airports in the country. Other airlines in the country need to transition from their aging aircraft and old cabins to more modern aircraft and cabins to enhance the customer experience and be more efficient in their operations.
At the end of the day, announcing new routes and plans is not enough; a new set of aircraft is needed to support those new routes and plans airlines are sketching.
Investors, innovators, and collaborations
In 2021, Indigo Partners and the International Finance Corporation invested $250M in Cebu Pacific to financially support the LCC after recording losses due to the pandemic. They took advantage of this funding and continued to innovate their business practices, resulting in growth for the airline. The investment also brought in talented individuals like CEO Mike Szucs. The Gokongwei family embraced new ideas and practices introduced by these talented individuals, resulting in the strong recovery of the airline and now looking forward to a bright future.
After the announcement of Ninoy Aquino International Airport’s privatization, the LCC immediately voiced its support for San Miguel Corporation, the future operator of the country’s main gateway. The LCC’s executives met with SMC for collaboration to enhance the customer experience, including upgrades to the baggage handling system, the introduction of mobile boarding passes for international flights, investments in modern flight information screens, and expanded seating areas. This collaboration with the new airport operator is important to ensure improved passenger experiences, which is possible when airlines and the airport operator work together and remain open to collaborations.
Cebu Pacific is also the largest airline operating in NAIA, making their input crucial as SMC works to enhance the country’s main gateway. This collaboration should be emulated by other airlines to foster productive discussions with the future airport operator, exploring options to increase frequencies and handle more aircraft in their fleet.
Differences in management styles, past events, and long-standing inefficient company cultures in other Philippine airlines should be addressed. They should be open to more innovation by welcoming talented people, collaborating with important stakeholders, and becoming more attractive to investors to achieve growth in the present and future.
Expanding operations to other airports
As Cebu Pacific orders a large number of aircraft, it can also lead to more routes to other major airports in the Philippines, such as Clark, Cebu, and Davao. The LCC is investing in the potential of these airports to open new domestic and international routes. Having a large fleet is not just for Manila but also provides an opportunity to open new routes from other major airports in the Philippines, decongesting Manila and making air travel more accessible to people living in Visayas and Mindanao.
This will also make other parts of the country more accessible to tourism as local airports have more flights available, attracting tourists to explore these places. Moreover, it will help these areas grow and become more popular, both in the Philippines and abroad. It will provide more sustainable livelihoods and growth for these areas, contributing not only to the aviation industry but also to the lives of ordinary Filipinos.
Other airlines in the Philippines have primarily focused on Manila or other airports without expanding their operations due to their limited fleet. Expanding operations in other airports beyond Manila should be one of the reasons airlines expand their fleet, not just to replace old ones. This also challenges operators and the government to support airlines by investing in necessary enhancements at airports across the country.
Expansion should not be limited to Manila but should also include other areas in the country so that every place and its people have an opportunity to grow. Airlines should not limit their scope to Manila or Clark only but also consider options in Visayas and Mindanao.
Conclusion
Those mentioned are just some of the things other carriers should take note of as Cebu Pacific makes moves to enhance their airline and help the country grow in every aspect. Airlines should step up not to counter the LCC’s order but to enhance their own airline, not just in fleet and customer experience but also in corporate decision-making and planning. The growth of one should also contribute to the growth of others. Taking notes from others’ success is a good practice to adopt and apply.
Let the largest aircraft order in Philippine history be a motivation for other airlines as we all navigate towards a bright future ahead.
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