Airlines see best 4th quarter this year

MANILA, Philippines — The country’s largest airlines are preparing for what could be their best performing fourth quarter since the pandemic, expecting to sell at least nine out of 10 seats until December.

Flag carrier Philippine Airlines (PAL) and low-cost operator Cebu Pacific anticipate their fourth quarter output to equal, if not exceed, the levels they reached prior to the pandemic in 2019.

PAL president and chief operating officer Stanley Ng projects  holiday demand to hit the same level as the summer surge, especially from the domestic market.

“Our outlook for (fourth quarter) is robust, specifically coming out of the low and shoulder travel season in October through the first of November. Demand resilience continues across the system, with the domestic recovery almost restored and strong demand expected for the peak Christmas season to match the levels of travel observed during the summer peak,” Ng told The STAR.

At present, PAL is recording a load factor of around 80 percent for its domestic flights. Airlines measure their load factor, or the percentage of seats sold against the slots available, to gauge the demand for a certain period.

PAL is eyeing to post a load factor of as much as 90 percent between October and December.

On the other hand, Cebu Pacific president and chief commercial officer Alexander Lao expects the October and November demand to be lifted by domestic travel for All Saints’ Day visits.

Cebu Pacific believes its fourth quarter load factor will outperform the pre-pandemic high of 87 percent in 2019 with its system-wide capacity now restored to 94 percent.

“The fourth quarter is looking rosy, with October and November picking up due to Undas traffic, driven by domestic demand. Overall, the fourth quarter looks good with the load factor expected to exceed the pre-pandemic levels of 87 percent,” Lao told The STAR.

“September system-wide capacity was at 94 percent of pre-COVID, with domestic at 99 percent and international at 81 percent. The market has been responsive to promotional activities and has been driving demand as well,” he added.

However, Ng said PAL is experiencing some weakness in air travel from international travelers, particularly from Japan, whose currency is suffering in the foreign exchange.

Tokyo is facing pressure to prevent the Japanese yen from further depreciating, as the currency is struggling to withstand the widening gap in interest rates between the US and Japan.

“International demand continues, although we are seeing pockets of weakness from Japan due to currency and lagging demand for international outbound travel,” Ng said.

For the year, PAL wants to expand its passenger volume by 55 percent to 14.5 million from 9.3 million a year ago. Cebu Pacific aims to exceed its pre-pandemic high of 22.8 million.

The fourth quarter forecasts of PAL and Cebu Pacific are supported by the demand recovery for air travel. The Ninoy Aquino International Airport (NAIA) has welcomed 33.76 million travelers as of September, already beating the 2022 total of 30.94 million.

The Manila International Airport Authority (MIAA), regulator of NAIA, said that flight volume totaled 206,050 between January and September, marking a 31 percent increase when compared to the same period in 2022.

With these numbers, MIAA officer in charge Bryan Co said NAIA is on track to hit the target of facilitating 45 million passengers and 275,000 flight movements in 2023.

“These projected flight estimates are poised to surpass the pre-pandemic levels of 2019, and they reflect the resilience and recovery of the aviation industry in the Philippines,” Co said.