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Saturday, November 19, 2005
Cebu Pacific lowers rates for 1M seats
GOKONGWEI-controlled Cebu Pacific (CEB) has set aside more than one million seats to be sold at fares as low as P699 one-way for travelers, who book their flights early.
Aside from this, CEB president Lance Gokongwei said some 300,000 seats of the one million passengers will be sold at the “lowest advertised fare levels.”
“The more than a million is about 30 percent of our total overall capacity over the coming years. CEB’s offering of substantially lower fares follows studies that pre-selling seats at lower prices would generate higher revenues and make CEB financially stronger,” he said.
Gokongwei said the lower fares, which allows travelers to save of from P1,000 to P2,000 per leg, is also good for the traveling public and the economy as this would promote local tourism and closer family ties since travel to the provinces will become very affordable.
“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.
CEB general manager Bong Mojica said the company has tested the lower fares on a number of routes.
“We are excited by the market’s warm reception. Now we are ready to offer the reduced fares the whole year round on all our domestic destinations,” he said.
Permanent
Mojica said the new fares are not promotional fares but a permanent offer of discounts like the practice of low fare airlines worldwide.
He said the idea is to allocate seats to be sold in advance at discounted fares. The remainder of the seats would be sold at regular prices.
“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 mid-week or on an early morning flight, then chances are you will get yourself a real bargain,” Mojica advised.
He said the low fare offer is a revenue model that CEB patterned after foreign airlines, especially Southwest Airlines.
By selling discounted seats that otherwise would not be sold during the lean months, CEB would be maximizing its revenues and, as a consequence, “smoothing some of the demand peaks and troughs of the seasonal airline business,” Mojica said.
With revenues and passenger loads more stable throughout the year and with extra income from increased flight frequencies as demand goes up, CEB would be financially stronger and in a better position to serve the Filipino public, he said.
CEB pioneered low fares in the country in March 1996, forcing other airlines to follow.
It also was the first to introduce on-time service, e-ticketing, fun games on flights and flight booking through SMS.
CEB now operates two brand-new A320 and two A319 aircraft and will take delivery of two more A319s next month.
Eight more will be delivered next year until February 2007 when it shall have completed its re-fleeting program. The airline flies its Manila and Cebu hubs, currently servicing 14 domestic destinations, Hong Kong and South Korea. (JBN)
(November 19, 2005 issue)
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