Vol. XXII, No. 115 [ BusinessWorld Online ]
Tuesday, January 13, 2009 | MANILA, PHILIPPINES
LOCAL CARRIER South East Asian Airlines (SEAIR) will launch a budget brand in April that will compete for regional passengers with airlines flying out of the Diosdado Macapagal International Airport in Clark, Pampanga.
The airline will use its two new 180-seater Airbus A320 aircraft, which it had leased from Singaporean budget carrier Tiger Airways, to fly to new international destinations, SEAIR President Avelino L. Zapanta said yesterday.
"That’s the future. If you read the prognosis of the industry, air travel in this part of the world is still sheltered from the economic slowdown," he said in an interview.
In August, the company received regulatory approval to rent the two new aircraft, originally scheduled for delivery in February last year. But opposition from SEAIR rivals had before the Civil Aeronautics Board (CAB) delayed the approval.
The rival airlines earlier claimed SEAIR was fronting for the Singaporean budget airline.
Mr. Zapanta said SEAIR’s low-cost brand would compete with other budget carriers operating from theClark terminal.
These include Gokongwei-owned Cebu Pacific and Zest Airways, formerly Asian Spirit.
SEAIR is planning to fly from Clark to Bangkok, Singapore, Hong Kong and Macau. It also plans to fly locally to Cebu and Davao from Clark.
"Actually, it’s a commercial decision. [Airlines] need to be creative in the face of challenges in the market... You have to be flexible to survive," CAB Executive Director Carmelo L. Arcilla said in an interview yesterday. "They have to reinvent themselves," he added.
He welcomed SEAIR’s eventual shift to offering lower prices, saying it would be good for the market.
Mr. Zapanta said the airline would seek to become the first "real" budget carrier in the country. "In truth,there aren’t really any local low-cost carriers in the country, as some airlines claim to be," he said.
Examples of low-cost carriers in the region include Malaysia’s Air Asia and Thailand’s Thai Airways. Both airlines, Mr. Zapanta said, operate only from secondary terminals, do not carry cargo and do not offer interline services where a passenger can have a connecting flight on a different airline.
In-flight frills such as food are also not supposed to be offered for free in budget carriers.
But the CAB’s Mr. Arcilla said it would be difficult to judge other airlines about their claim to be low-cost carriers.
"It’s not easy to judge a carrier because the model itself is evolving," he pointed out.
"What we described as budget carriers yesterday could have evolved into an entirely different animal altogether today, he said.
He added that an airline might be considered a budget carrier, even if it does not fit the classic definition of low-cost carriers.
SEAIR considers itself a "leisure" carrier because its main destinations are tourist spots.
Local SEAIR destinations include Boracay Island via Caticlan, and Busuanga, El Nido and Puerto Princesa in Palawan. But it is also the only airline that flies to Tawi-Tawi and Jolo in Mindanao.
Based on CAB data, international traffic in the country grew by 8.57% to 9.16 million in January to September from 8.43 million a year earlier. — Paolo Luis G. Montecillo