Cebu Pacific Set For Robust Growth In 2025, Buoyed By Lower Fuel Costs, Strategic Expansion

By Kisho Kumari Sucedaram

MANILA, Oct 17 (Bernama) -- Cebu Pacific, the Philippines’s low-cost carrier, is poised for significant growth next year, buoyed by declining fuel prices, appreciation of the Philippine peso and strategic expansion of its fleet and route network.

President and chief commercial officer Xander Lao said the airline plans to open new bases in Davao and Iloilo, expanding its domestic and international operations.

“The Davao base will serve routes to Bangkok and Hong Kong, while Iloilo will connect to Hong Kong and Singapore,” he told Bernama recently.

He said the carrier will place at least two aircraft in Davao and another two in Iloilo, intending to open a crew base over time following interest from the cabin crew to be based outside Manila.

“We are also pretty excited about the opening of the New Manila International Airport (Bulacan International Airport) and expect to base several aircraft at that airport, which would certainly take our operations to greater heights,” he said.

He also clarified that the airline will not exit its operations at Ninoy Aquino International Airport -- the main airport in the city centre, and move to Bulacan International Airport once the airport is fully operational in 2028.

“We will still maintain our operations in Ninoy Aquino and at the same time, open another base at Bulacan International Airport,” he said.

Bulacan is about 50 kilometres away from Manila.

Fleet Expansion Plans

Similar to other low-cost carriers, Cebu Pacific is also transitioning to the Airbus A321, a move aimed at enhancing operational efficiency.

“The A321neo can accommodate up to 240 passengers, significantly increasing capacity compared to the A320's 180 seats.

“Therefore, this transition allows the airline to maximise slot utilisation at congested airports, particularly in Southeast Asia,” he said.

By year-end, Xander said Cebu Pacific is anticipating to operate a total fleet of 95 aircraft, including Airbus 330s, Airbus 320s, Airbus 321s, and ATR turboprops.

He said the airline is also exploring options for the A321LR, which would further enhance its long-haul capabilities. However, the business case (for that aircraft) is still ongoing.

On Oct 2, Cebu Pacific signed a landmark purchase agreement with Airbus and Pratt & Whitney for up to 152 A321neo aircraft equipped with Pratt & Whitney GTF engines.

The first order of A321neo is scheduled to arrive in 2029.

The Airbus Neo is the latest-generation aircraft that burns 15 per cent less fuel per flight and produces less noise, leading to a corresponding reduction in aircraft carbon emissions compared to the previous generation.

Routes and Market Penetration

By December this year, the carrier will operate a total of 73 routes serving Visayas and Mindanao as it opens new routes from its Iloilo, Davao, Cebu, and Clark hubs.

Xander said this expansion would bring the airline’s capacity on Visayas and Mindanao flights to 2.1 million seats, up from 1.4 million in January 2024, and increase the number of flights operating across the same network to an average of 12,000.

“While the Philippines remains a focal point, the low-cost carrier is looking to increase frequencies to destinations in Australia, Thailand, and Vietnam,” he said, adding that the airline is committed to maintaining existing routes to Malaysia despite scaling back operations to Kota Kinabalu.

He said the strategic focus on connecting more Philippine cities to key Southeast Asian destinations reflects its commitment to meeting growing travel demand.

As of September, the airline flies to 35 domestic and 26 international destinations across Asia, Australia, and the Middle East.

Navigating Competition among Low-Cost Carriers

He opined that post-COVID pandemic, the competitive landscape among low-cost carriers in the region is seen to be intensifying.

However, Cebu Pacific views competition as beneficial, citing its low-cost base as a competitive advantage.

“We think the Philippines itself is a pretty good product, and if we make the fares affordable and accessible for anyone, it will help drive some traffic here to the country. However, it is a tough market.

“We have to compete not just within the Philippines but clearly with our Southeast Asian neighbours, whether it is Scoot in Singapore or AirAsia in Malaysia,” he said.

Addressing Operational Challenges

Due to the archipelago’s location, the Philippines is among the most vulnerable countries in the world to natural disasters and climate impacts.

Hence, Xander said Cebu Pacific has five aircraft on standby in case of disasters or technical interruptions to ensure consistent service during adverse weather conditions.

He said the airline has also invested in advanced weather forecasting technologies to improve dispatch decisions, allowing for better management of flight schedules amidst unpredictable weather.

As Cebu Pacific embarks on this ambitious growth trajectory, Xander said its focus on fleet modernisation, market expansion and operational efficiency positions it well to navigate the challenges of the aviation industry.

-- BERNAMA