The Philippines’ low-cost carrier, Cebu Pacific Air, is to further extend its long-haul network from September 2014 with the introduction of direct flights from Manila to Sydney, Australia and to Kuwait, to serve Filipino expatriates and open more opportunities for tourism. The two destinations join Dubai in the network of its long-haul division which flies Airbus A330-300s configured in an all-Economy, 436 seat arrangement.

The Sydney route will commence on September 9, 2014 and will be operated on a four times weekly basis, increasing to five per week later this year to coincide with the peak holiday season. The new service will provide tourism benefits and more choice for passengers on a city pair already served by Philippine Airlines and Qantas and will strengthen Sydney Airport’s status as a low-cost carrier hub.

“Sydney Airport is Australia’s largest international low cost carrier airport, so we’re well placed to welcome Cebu Pacific Air to Australia for the first time,” said Kerrie Mather, chief executive officer, Sydney Airport. “Low-cost carriers such as Cebu Pacific Air are increasingly popular with Australian travellers, and this new service will provide more choice and value for passengers travelling to and from the Philippines.”

The Cebu Pacific service will provide an additional 226,800 seats per year on the Manila - Sydney route. Philippine Airlines and Qantas both operate four weekly flights on this direct route using A340-300 and A330-300 equipment, respectively. However, the dense configuration of the Cebu Pacific widebody means overall weekly capacity will grow 77.7 per cent when it enters the market.

“We expect both inbound and outbound tourism to grow as a direct result of this new service – with more than 170,000 passengers per year, including around 40,000 Filipino visitors a year with a total visitor expenditure of more than $74 million,” added Mather. According to MIDT data, an estimated 182,000 bi-directional O&D passengers flew between Manila and Sydney in 2013, up 9.8 per cent on the previous year.

In our analysis, above, we look at average air fares being offered by Philippine Airlines and Qantas between Manila and Sydney over the past ten years. Qantas has served the route continuously during this period, while Philippine Airlines reintroduced non-stop Manila – Sydney sectors in November 2007 after modifying its Australian schedule.

Cebu Pacific will introduce a lot of capacity into the market but expects its low fares to help stimulate the market and allow it to compete with the existing operators at the lower end of the market. There are an estimated 300,000 Filipinos based in Australia, according to latest statistics. “We are excited to launch our operations in Australia with the Sydney - Manila service and introduce our trademark low fares to the market,” said Alex Reyes, general manager for long-haul, Cebu Pacific. “Sydney is also the nearest airport for many Filipino expats, making this route a strategic expansion for our long-haul services.”

The Sydney link will commence shortly after Cebu Pacific introduces a three times weekly link between Manila and Kuwait from September 2, 2014. The low-cost carrier will be the only carrier to offer non-stop flights between Philippines and Kuwait, a market of around 193,000 bi-directional O&D passengers in 2013. Kuwait Airways does serve the Philippines’ capital from Kuwait City but via a stop in Bangkok, Thailand.

Our analysis, below, highlights the strong growth in passenger demand between the Philippines and Kuwait, despite the lack of non-stop air services. Around a quarter of this traffic in 2013 (26.8 per cent) was carried by Kuwait Airways on its direct service via Bangkok, while notable flows were also seen with Emirates Airline (21.5 per cent), Etihad Airways (16.2 per cent), Gulf Air (13.5 per cent) and Qatar Airways (13.3 per cent) via Middle East hubs.