CebPac confident of PH aviation growth

CebPac confident of PH aviation growth
Cebu Pacific CEO Michael Szucs during the Philippine Aviation Summit hosted by the European Chamber of Commerce of the Philippines (ECCP) and co-presented by Cebu Pacific. Photo courtesy of ECCP.
  • Cebu Pacific is optimistic the local aviation sector will continue its post-pandemic growth despite global supply chain and operational challenges facing the industry
  • Cebu Pacific CEO Michael Szucs said the Philippine advantage includes a growing economy, its strategic location in ASEAN, and a growing middle-class population
  • The low-cost carrier is in talks with aircraft manufacturers Airbus and Boeing for the “largest order by far that we will have ever made”

Cebu Pacific is optimistic the local aviation sector will continue its post-pandemic growth despite global supply chain and operational challenges facing the industry.

Cebu Pacific CEO Michael Szucs, in a presentation during the recent Philippine Aviation Summit, highlighted the advantages and opportunities of the Philippine aviation industry.

Szucs noted the Philippines “is back on that treadmill again” as the economy recovers from the COVID-19 pandemic and expected to maintain robust growth in the next few years.

He pointed out another advantage: the country’s young population and growing middle class, which he noted are “increasing the wealth of the nation but also wanting to travel.”

Moreover, the Philippines’ strategic location within the Association of Southeast Asian Nations (ASEAN) positions it as a regional hub, facilitating enhanced connectivity with 25 of Asia’s 40 most populous metropolitan areas reachable by short flights from Manila.

Szucs identified significant market growth opportunities due to low air travel penetration, while the recovering and growing tourism industry will drive increase in travel demand.

Further, he highlighted ongoing infrastructure projects, particularly for airports, that will provide additional capacity to cater to growing travel demand.

These include rehabilitation of Ninoy Aquino International Airport, construction of the New Manila International Airport in Bulacan, and the Sangley International Airport project, all expanding the Greater Capital Region’s capacity.

Various regional airport projects are also ongoing or in the pipeline to improve connectivity and decongest main air hubs.

With the forecasted increase in demand, Szucs said Philippine carriers will need to grow by almost quadrupling their aircraft hulls by 2042.

Szucs said Cebu Pacific is in talks with two aircraft manufacturers, Airbus and Boeing, for the “largest order by far that we will have ever made.”

“And this is us lining [up] our commitment to coincide with the commitment the government and the private airport operators as well are making in terms of this country and developing the sector as a whole,” Szucs said.

In an interview with media on the sidelines of the event, Szucs said in a few weeks, they will launch a request for proposals from both manufacturers and will decide which to tap. The process may take three to six months, Szucs noted.

He declined to provide the exact number of aircraft that they will order but noted “looking at an order that takes us… well into the 2030s.”

Regarding concerns about Pratt & Whitney (P&W) engines, Szucs said they expect the engine issues to be resolved by the time of the order.

One of the industry problems identified by Szucs in his presentation is the matter of the P&W engines. While the problem does not compromise safety, it significantly lengthens aircraft engine maintenance times, going from 90 to 240 days.

These engines are used in A320/321 NEO planes worldwide. Cebu Pacific anticipates its fleet availability will be impacted by P&W engine issues in 2024, affecting its 25 P&W-powered Airbus aircraft.

READ: Engine issues to cut Cebu Pacific fleet growth in 2024

Other industry challenges include scheduled aircraft delivery delays from manufacturers and supply chain issues affecting spare part availability.

These challenges prompted Cebu Pacific to enhance contingency plans and prioritize operational resilience.

Cebu Pacific currently flies to 35 domestic and 24 international destinations spread across Asia, Australia, and the Middle East. At the end of 2023, Cebu Pacific’s fleet will total 76 aircraft.