Airlines

It is good to hear that the country’s local airlines, Gokongwei-owned Cebu Pacific and Lucio Tan’s Philippine Airlines, are well on their way to recovery.

Two years of a travel slump and dizzying losses brought about by COVID-19 are no laughing matter. We can only imagine the blood pressure and stress levels of airline executives and owners. In the case of PAL, its financial troubles started even way before the pandemic.

But it is all looking positive, at least for now.

Cebu Pacific

Just a few days ago, the budget carrier founded by John Gokongwei Jr. celebrated its 26th year, and what a journey it has been.

It was sometime in the late 1980s, recalls Cebu Pacific president and CEO Lance Gokongwei, when his late father, John— known fondly as “Big John” — first toyed with the idea of starting his own airline.

Big John did not possess any experience in running an airline, but this did not deter him nor did the prospect of going against an established Goliath bother him.

Besides, it was an upbeat period as the local aviation industry was steadily opening up with the liberalization of air travel. Plus, Big John loved to travel and had a fascination for airplanes as a kid.

“He was in the United States at that time and read about a low-cost carrier called Southwest. That’s how all this started,” recalled Lance in a narration published by Cebu Pacific.

“He came up to my office one day and said, ‘I started this airline — can you think of anyone who could help?’ For me, that meant he wanted me to help, so that’s what I did.”

And so last week, Lance led the celebration as Cebu Pacific flew its 200 millionth passenger on board one of its 18 times daily Manila-Cebu flights, the route that was the first flown by Cebu Pacific back in 1996.

Moving forward, the airline expects to restore over 100 percent of its pre-pandemic domestic capacity in April 2022 after it ramped up its network with the easing of pandemic travel restrictions, marking a strong start for its 26th year.

As the summer peak approaches, the airline has noted a 200 percent increase in its average daily flights for both domestic and international combined – from about 100 flights per day in 2020, to about 300 at present.

“It is encouraging to see and feel travel confidence returning.  We thank our passengers for their continued trust, and we will endeavor to live true to our promise of providing safe, affordable, and accessible air travel for every Juan,” Lance said.

But our airlines are still facing challenges.

Last year, Cebu Pacific incurred a net loss of P24.9 billion, higher than 2020’s P22.2 billion net loss as strict lockdowns due to COVID-19 variants affected its operations.

It expects the losses to narrow this year.

Philippine Airlines

Over at the country’s flag carrier, Philippine Airlines, which also just celebrated its 81st anniversary, its new leaders, president and COO Capt. Stanley Ng and PAL director Lucio Tan III, have already announced their blueprint for a new PAL.

This includes digital innovations.

“Our digital action plan puts customer convenience at the heart of every digital innovation PAL will roll out … from customer touch points to back-office systems,” Capt. Stanley said.

PAL will also focus on network expansion for better connectivity by adding more than 1,500 flights, up 52 percent systemwide.

“Our summer schedule will cover 39 international destinations across 20 countries globally and 1,000+ more destinations through codeshare alliances and partnerships – more flights to and from the Philippines than any other airline,” he said.

In all, PAL will add more flights to North America, Middle East, Japan and Australia.

Public Service Act

But one challenge may be the Public Service Act, which would allow up to 100 percent foreign ownership of public services in the country, including airlines.

PAL, in its position papers submitted to Congress during the hearings of the PSA, said “foreign carriers will be placed not just on equal footing as Philippines carriers, but in a better position as Philippine carriers because foreign airlines will be granted access to Philippine territory while the same will not be granted to Philippine carriers.”

It said at the time that it would not be able to compete with foreign airlines that are owned or subsidized by their respective governments, such as Middle Eastern carriers.

Lance Gokongwei, on the other hand, gave this comment when I asked him about the PSA:

“We are in favor of liberalizing investment, especially in capital and technology intensive sectors such as aviation that require immense amounts of investments, especially after the pandemic.”

This could mean Cebu Pacific is open to getting foreign partners. Thus, the higher the foreign ownership allowed, the better for attracting foreign partners, an industry source said.

Clearer skies

At the end of the day, I hope our airlines survive whatever turbulence and headwinds they may encounter as they work their way to recovery.

I say this with Filipino passengers in mind -- so that we may continue to be safely connected to our families and friends and places of work -- at reasonable prices, especially in an increasingly turning and fast-moving world.

Iris Gonzales’ email address is [email protected]. Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com