Australia-Philippines market booms resulting in 37 weekly flights for this summer

    Philippine Airlines (PAL) is planning further expansion in the Australia market as Melbourne increases to daily and Sydney to 11 weekly flights.


    Highlights

    • Philippine Airlines will operate 22 weekly flights to Australia this summer as Sydney is upgraded to 11 frequencies and Melbourne to seven frequencies;
    • Cebu Pacific and Qantas are also expanding in the Australia-Philippines market with new services to Melbourne for Cebu Pacific and an additional frequency on Sydney-Manila for Qantas;
    • There will be a record 37 weekly nonstop flights between Australia the Philippines during peak periods this summer.

    PAL’s Australia operation will be up to 22 weekly flights this summer when also including its new four times weekly nonstop service to Brisbane. The total number of Australia-Philippines flights will be up to a record 37 weekly flights during the peak season this summer, compared to only 27 flights a year ago, driven by expansion from PAL and (to a lesser extent) Cebu Pacific and Qantas.

    PAL recently filed a new Sydney-Manila schedule which features 11 weekly flights from Dec-2018. For the peak months of December and January, PAL will operate seven weekly flights with 309-seat three class A330-300s and four weekly flights with 168-seat two class A321neos. From 1-Feb-2019, PAL plans to operate all 11 Sydney flights with A321neos.

    PAL’s new fleet of A321neos feature lie flat business class seats and seatback IFE in economy. The A330-300s it uses to Australia feature lie flat business class seats and premium economy.

    The new Sydney schedule is not unexpected. Blue Swan previously reported that PAL was planning to use its new fleet of A321neos to increase Sydney to up to 14 per week but A330s would still be operated during peak periods. While PAL for now plans to operate all Sydney flights with A321neos in February, the A330 will likely come back later in the year to meet seasonal demand.

    See related report: Philippine Airlines improves Brisbane and Sydney product with new A321neos

    A double daily service to Sydney is possible later in 2019 depending on how the new schedule with 11 weekly flights performs. Providing 14 weekly flights would enable PAL to offer Sydney-London connections daily.

    PAL introduced a split schedule in Sydney in 2015 with three daytime flights from Manila and three early morning departures from Sydney in order to offer London connections on a two-way basis. The prior schedule of overnight flights from Manila and late morning flights from Sydney only enabled connections from London and not from Sydney.

    The new schedule from Dec-2018 will add a fourth daytime frequency from Manila and a fourth early morning departure from Sydney, while restoring the overnight flight from Manila and late morning departure from Sydney to daily.

    Qantas operates Sydney-Manila six times per week and recently announced a new daily schedule from late Oct-2018. Cebu Pacific currently serves the route with five weekly flights. It offered a daily service during peak periods last summer (December and January) but plans to have only five weekly flights during the peak period this summer. However, due the launch of Melbourne, Cebu Pacific will have a record eight weekly flights to Australia this summer.

    Meanwhile, Qantas will be up to seven weekly flights to Australia and PAL will be up to 22 weekly flights. Combined the three airlines will have 37 weekly flights in the Australia-Philippines during the peak summer season compared to 27 frequencies last summer.

    Australia-Philippines nonstop passenger traffic increased by 11% in 2017 to 611,000, according to BITRE data. The Philippines reported a 3% increase in Australian visitor numbers in 2017 to 259,000, while Australia reported a 13% increase in Philippine visitor numbers to 127,000.

    Overcapacity is a concern as the number of flights increases. The average load factor on Australia-Philippines flights in 2017 was only 74%. PAL particularly struggled to fill seats, experiencing an average load factor on Australia-Philippines routes of 69%, while Cebu Pacific had a higher 77% load factor and Qantas a strong 88%. As PAL adds flights to Melbourne and Sydney, its load factor will likely be pressured even further.