By: AirTravellerPH Staff
The past year, 2019, was indeed a roller coaster ride for commercial aviation. The crash of Ethiopian Air 737 MAX 8 which lead to the grounding of all 737 MAX aircraft worldwide, the announcement of the end of the A380 line, and the launch of new aircraft like the Airbus A321XLR which really made waves. The same "roller-coaster ride" indeed goes for Philippine commercial aviation which now makes 2020 more interesting.
We would say 2019 was indeed a year of ups and downs for many of our local airlines. Allow us to rundown a few of these ups and downs:
If we were to compare PAL's roller-coaster ride to a real roller coaster, we would compare it to Six-Flags's X2. High climbs and steep dips. Noteable achievements are the 8 Skytrax Awards it received like World's Most Improved Airline of 2019, and 11th Best Cabin Crew in the World. The airline also moved up the rank from 49th place in 2018 to 30th place in 2019! The airline also took delivery of 2 nostalgic Airbus A350-900 "Love Bus", a reincarnation of the 1980s livery on the first A300B4 aircraft which signaled the start of a tight relationship between PAL and Airbus. The airline also retained its Skytrax 4-Star status.
Despite all the accolades, PAL was not spared from turbulent times. First are the huge reported financial loses during the year. Biggest change though was management highlighted by the resignation of its long time President Jaime J. Bautista. He was replaced by former IBEX CEO Gilbert Sta. Maria who has committed to turn the airline around this 2020. Another sad story was the sudden loss of newly appointed PAL Holdings President Lucio "Bong" Tan Jr., who passed away after he collapsed in the middle of a basketball game.
A PAL 777-300ER operating as PR113 from Los Angeles to Manila declared an emergency landing back to LAX after engine #2 started to spit flames during take-off. All passengers and crew were evacuated safely and the aircraft did not suffer huge structural damage, although a thorough inspection of the aircraft is still ongoing to ensure its safety. The incident is still under investigation.
We would say 2019 was Cebu Pacific's year, a year of expansion, earnings, new aircraft orders, and growth. First was the 31-Airbus NEO aircraft order made during the 2019 Paris Air Show. This huge order include 16 Airbus A330-900NEO, 10 Airbus A321XLR which was also launched during that day, and additional 5 more A320NEO. All these orders were finalized later this year. By 2024 and beyond, Cebu Pacific should be operating an all-NEO fleet. The airline also took delivery of its first Airbus A321NEO and A320NEO jets. The new aircraft order including the previous 32 A321NEO orders will replace the existing Cebu Pacific fleet of A320-200. The budget airline's profits also doubled this year, the local airline that made the biggest earning this 2019.
Cebu Pacific also made the headlights after hiring the first ever transwoman flight attendants in the Philippines, Jess Labares and Mikey Vitug.
The incumbent year though was not smooth sailing for Cebu Pacific all throughout. During the first and second quarter of the year, the airline was hounded by a lot of flight cancellations, even breaching the 50 count. Its parent company, JG Summit, also lost its Chairman Emeritus, philanthropist John Gokongwei Jr., during the last quarter of the year.
PHILIPPINES AIR ASIA
AirAsia (Philippines) has indeed had its share of changes during the past year but more on internal stuff. Well the highlight is the move of its RedPoint office from the Salem Complex to the NAIA Terminal 3 complex. The new RedPoint office is very chic, bright, colorful, and modern. It even got its own hammock and swings, representing its Asian roots. We are happy to see the new office with our own eyes. Other changes include the change in top management where Ricardo "Ricky" Isla was appointed as CEO and Joseph Omar Alday Castillo was appointed Chairman of the Board. At the same time, F&S Holdings of the Romeros took in a bigger share in the company, buying out shares held by Antonio "Tonyboy" Cojuangco.
The airline also expanded its services from its Clark hub during the previous year such as Clark to Caticlan and Clark to Kalibo.
WHAT TO EXPECT THIS 2020:
Well, a lot. You will see a lot of changes, new beginnings, upgrades, and surprises in the Philippine commercial aviation this year.
Well first of all is the delivery of more aircraft to the top 3 airlines in the Philippines particularly PAL, Cebu Pacific, and Philippines AirAsia. PAL is set to get in around 2 to 4 more of its 14 remaining A321NEO SR orders. Cebu Pacific is taking in more A321 and A320NEO also this year, while Philippines AirAsia, for the very first time, is receiving 2 A321NEOs. As airlines are adding more aircraft to the fleet, most of larger capacity, expect also more destinations from Manila, Clark, and Cebu. Last year, PAL launched more domestic interisland services from its Cebu hub like Cebu to Zamboanga to Tawi-Tawi, and Davao to Manado, Indonesia. We are also expecting Cebu Pacific to launch more flights from Clark.
Speaking of Clark terminal 2 which is said to be more than 70% complete, expect more airlines, both low-cost and full service, to launch services from the new terminal. With Capt. Jim Sydiongco now sitting as the Director General of the Civil Aviation Authority of the Philippines (CAAP), expect also more improvement in our airports around the country such as terminal expansions to improve passenger experience, better navigation systems, landing equipment, etc., which would allow airlines to launch more flights.
In terms of new aircraft orders, just keep an eye on PAL. We are not confirming anything yet, so just wait for an official announcement but for now, just keep an eye on PAL. For Cebu Pacific, we do not expect them to put in an order this year. For Philippines AirAsia, we believe that their new aircraft are coming from the 200+ A321NEO order made by the mother company just lately. Keep an eye though on AirAsia X.
Expect changes also with PAL as its new President have laid down his plans on how to return to profitability this year by improving its systems, cutting costs, and by going digital. We just hope they retain their great 4-star service and 4-star rating as well. During the past years, PAL has invested a lot in making service improvements to achieve a 4-star status, and we hope this year, everything shall pay-off.
Expect also lower fares as Philippines AirAsia (PAA) is set to slug it out with Cebu Pacific to gain a bigger domestic market share. Though lately, PAA has been known to have the lowest fares but Cebu Pacific still carries more than 50% of the domestic passenger market share in the Philippines. PAA currently falls third, next to Philippine Airlines. What's working in favor for Cebu Pacific and PAL is they operate turboprops. Operating such aircraft allow these airlines to launch interisland flights to airports which cannot accomodate Airbus jets. Philippines AirAsia does not operate a single turboprop. If ever they would need to operate such small aircraft, a new airline owned by Philippines AirAsia would have to be created as no subsidiary within the AirAsia group operates a single turboprop.
The Philippines is now in a time where the center of global commercial aviation is going towards the Asia Pacific region where China will be holding the biggest number. As such, expect more passengers to be carried not only by our local carriers but foreign carriers as well, particularly the airlines from China, Vietnam, and South Korea. Expect a boom also in the low-cost carrier industry this year but also expect it to be more competitive, a time where prices will really drop.
In terms of trend, premium services is now slowing down in favor of low cost flights for the regional sector. Though, PAL still holds the biggest international passenger market share in the Philippines, if they do increase marketing activities for this year, Cebu Pacific may gain a bigger market share in terms of regional flights from the Philippines. PAL's move though to go for a 3-class configuration namely business class, premium economy, and economy is now the way to go for full-service airlines flying long-haul and ultra long-haul. Other international airlines are now removing first class, in favor of premium economy.
We are indeed excited for what 2020 has in-store for everyone. For now, we are not confirming anything yet. Lets just keep an eye on the local aviation industry.