[ Malaya.com.ph ] June 12, 2008
By GENIVI FACTAO
Cebu Pacific (CEB) yesterday said it will slash its domestic fares permanently by 32 percent starting today to encourage more flyers.
Candice Iyog, CEB vice president for marketing said the airline is not undercutting prices of other airlines but it is a strategy for growth.
"We really hope that this new move is deemed as a positive change in the industry and we encourage other airlines to do the same," she added.
"We do this not to undercut anyone but because this is the business and kind of service that we can offer," she said.
She added that Cathay Pacific and Singapore Airlines continue to thrive their businesses along the same model and they take pride on it.
The fare cut, Iyog said, will encourage more travelers despite this trying times.
"We want to be the catalyst and entice other airlines to follow suit", she said.
Cutting domestic fares is Cebu Pacific’s own business model in order to grow the market, she said.
"We wanted to show that it is still affordable to fly. This strategy is not anymore about pricing but to give the people the option to still fly despite the price increases," Iyog said.
Cebu Pacific intends to grow its market to 7 million by the end of the year from last year’s 5.4 million. The Gokongwei -owned airline posted a 27 percent growth in 2007 from 2006.
She further said that to be able to sustain its business model, "we have to properly manage our allocation."
"I think they will not make good to play this game. Maybe they can offer more, but maybe not with our kind of business model," she explained.
Iyog said the company wants to grow the entire market, adding that if due to economic crunch, travel would stop, that would not be good for the market.
The firm is also studying, if it could offer the reduce fares in international market.
The new lower all inclusive fares, inclusive of fuel and insurance surcharge, aviation security fee and 12 percent VAT, will take effect today.
The "all in pricing" format is introduced with a seat sale of more than half a million seats from June 12 to 17, valid for travel on July 1 to October 15.
The "all in" fares, or the actual amount for short travel such as Manila -Legazpi is at P699 one way, while a one-way Manila-Cebu flight would cost P999.
The Manila -Davao sector would cost only P1, 499 during the seat sale. At seat sale levels, the reduce cost represent savings of up to 56 percent over today’s rate.
After the seat sale, the one-way Manila-Davao would cost P2, 499 "all in" while a one-way Manila -Cebu is sold at P1, 4999. Out of pocket cost for one-way Manila-Legaspi is P999 one way.
She added that in this way the firm is also helping the tourism industry grow through the reduced "all -in" fares.
CEB has a fleet of 10 A319s, 8 A320s and 2 ATR72-500 aircraft and flies to 16 international routes.
They plan to add another destination in Kota Kinabalu next month as well.
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