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Airlines continue expansion in Mactan-Cebu airport

MANILA, Philippines - Mactan-Cebu International Airport, the country’s second largest, continues to become a battlefield among local and foreign carriers as the main Ninoy Aquino International Airport (NAIA) faces infrastructure constraints and worsening congestion case.

A recent report from the Center for Asia Pacific Aviation (CAPA) said Mactan-Cebu has seen competition especially for flag carrier Philippine Airlines (PAL) and budget airline Cebu Pacific as both pursue expansion programs.

Cebu Pacific is adding capacity on seven domestic routes while PAL eyes six domestic routes from Cebu and its recently launched Cebu-Los Angeles service, the first long-haul route from the secondary hub.

Furthermore, foreign airlines have joined the competition as Emirates, Xiamen Airlines, Qatar Airways and EVA Air added new services in their existing frequencies.

Currently, Mactan-Cebu is served by 12 foreign airlines and has 12 international destinations. It handles approximately four percent of overseas Filipino worker departures and believes it can capture 35 percent with the right services.

“It expects to start handling a much larger portion of overseas workers from Cebu, as well as from other secondary cities throughout the Philippines. Cebu already has the domestic connections needed to increase its role as a hub for international to domestic transit passengers,” CAPA said.

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Even with the recent expansions, CAPA said Cebu is relatively underserved from an international perspective but domestic capacity growth is starting to outstrip growth in demand.

“Local domestic demand is growing, but not at the rate of the capacity growth. Point-to-point domestic routes are extremely price-sensitive, pressuring yields as Cebu Pacific and PAL pursue capacity expansion,” it added.

PAL’s domestic seat capacity in Cebu will increase from the approximately 40,000 weekly domestic seats to more than 54,000 weekly seats in April while total Cebu domestic operation will increase 60 percent from 110 weekly departures to 176 weekly departures.

As PAL pursues domestic expansion, Cebu Pacific also responds by adding capacity on seven of its 22 domestic routes from Cebu as it targets to maintain its share in the market despite the rapid expansion of its largest competitor, CAPA said.

Cebu Pacific has majority of the domestic seat capacity at 63 percent, followed PAL with 24 percent and Philippines AirAsia with 12 percent of the total.

“Mactan-Cebu is the most logical airport for new point-to-point routes as Cebu is the second largest city in the Philippines and Mactan-Cebu is being expanded to support rapid growth,” CAPA said.

Mactan-Cebu, one of the fastest-growing airports in Asia, recorded 14 percent growth to 7.8 million passengers in 2015 and is expected to post double-digit growth this year on the back of local and foreign expansions.

“Demand for air travel in the Philippines is expected to continue growing rapidly, boosted by rapid economic growth and an expanding middle class population,” the report said.

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