Cebu Pacific cuts ticket prices by half

Despite the escalating price of jet fuel, the country’s No. 2 domestic carrier Cebu Pacific announced that it was offering, starting today, major price cuts on its air tickets by as much as 50 percent for all domestic routes.

Cebu Pacific president Lance Gokongwei said they expect the greatly reduced fare prices under their "Go" fare discount program to increase travel and boost revenues by up to 20 percent.

"Our new initiative is good for the traveling public, the economy and Cebu Pacific," Gokongwei said in a press conference yesterday at the Crowne Plaza in Ortigas Center, Pasig City to announce the airline’s new marketing program.

Under Cebu Pacific’s Go fare program, their current Manila to Cebu ticket airfare of P2,569 — already about 10 percent lower than the price offered by the competition — will go down to as low as P999, exclusive of the add-on fees such as insurance, fuel surcharges and the 10-percent value-added tax.

Cebu Pacific’s Manila to Davao route ticket price will go as low as P1,499 from the current P3,239; Manila to Zamboanga, P1,499; Manila to Roxas, P699 from P2,149; Manila to Bacolod and Manila to Iloilo at P999 from P2,449; Manila to Butuan, P1,299 from P3,239; Manila to Cagayan de Oro, P1,299 from P3,239; Manila to Tagbilaran, P1,299 from P3,239; Manila to Dumaguete, P1,299 from P2,569; Manila to Cebu, Manila to Tacloban, Manila to Puerto Princesa and Manila to Kalibo will be offered at P999 from P2,569; Cebu to Zamboanga and Davao to Zamboanga will be offered at P999 from the current P2,319; Cebu to Davao, P999 from P2,249; and Cebu to Iloilo, P699 from P1,759.

Gokongwei said that with the low fares, air travel within the country would even be cheaper than taking a ship, which takes more time.

"This is all about getting people to think about flying. For those who fly today, we would like to encourage them to fly more frequently, and for those who haven’t flown before, we want to welcome them on board and introduce them to air travel," he said.

Cebu Pacific general manager Bong Mojica said the Go airfare rates would be offered permanently and that the pricing scheme is not just a seasonal offer.

However, he said there is a catch — to get plane tickets under the Go fare program, one would have to book a flight early since it is offered under a pre-selling concept.

"These reduced fares will be available year round, for 365 days," Mojica emphasized.

He said there will be five "fare buckets" or fare levels with about P200 to P300 added per fare bucket if a passenger could not get tickets under the "Go" program first, and so forth until it reaches their regular ticket price which is still five to 15 percent lower than the competition.

"The secret is to book early and to also be flexible with your travel plans. If you are willing to plan a month or two ahead and to travel midweek or on an early midnight flight, then chances are you will get yourself a real bargain," Mojica said.

He said the implementation of the fare discount program fulfills two of the airline’s four main objectives: increased market stimulation and increased fleet utilization. The other two objectives are fleet simplification and on-line distribution.

"We have set aside more than a million seats at fare levels below today’s fare levels — that’s about 30 percent of our total overall capacity over the coming year. Of the one million seats, more than 300,000 seats will be available at the lowest advertised fare levels," Gokongwei said, meaning the Go fare rates.

He added that the new program is based on "studies that pre-selling seats at lower prices would generate higher revenues" and make Cebu Pacific "financially stronger."

By selling discounted seats that otherwise would not be sold, especially during the lean months, the airline believes it would maximize its revenues and "smooth" out some of the demand peaks and valleys of the seasonal airline business.

"This is the revenue model that made many foreign airlines, especially Southwest Airlines, on which (Cebu Pacific) was patterned, successful," Mojica said.

Cebu Pacific pioneered low fares in the country when it started operations in March 1996, forcing other airlines to also lower their fares. It was also the first to introduce on-time service, e-ticketing, fun games on flights, and flight booking through text messages.