CebuPac beats PAL with record domestic ridership in May

MANILA, Philippines - Low-cost airline Cebu Pacific has set a new record for the number of domestic passengers carried in a month, beating the decade-old record held by rival Philippine Airlines (PAL). In a statement, the Gokongwei-led carrier on Monday said it had carried 512,081 domestic passengers in May, 18% higher than a year earlier and bigger than the 463,423 passengers carried by PAL in May 1997. Candice Iyog, Cebu Pacific vice-president for marketing, traced the record number to their low year-round promotional fares. "This is proof that [Cebu Pacific’s] low-fare business model works, despite the current market condition," she said in an interview. Consumer prices, which reached a 17-year high of 12.2% in July, are still expected to peak in October, and Cebu Pacific has been trying to perk air travel by cutting fares. The airline expects even more passengers following its transfer to the Ninoy Aquino International Airport Terminal 3 (NAIA-3). "We hope to carry more passengers this year and passengers can expect a better airport experience with Cebu Pacific operating both domestic and international flights from NAIA-3," Ms. Iyog said. Ms. Iyog said they might be able to break the record towards yearend during the holiday season. Data from the Civil Aeronautics Board showed that while PAL carried fewer passengers in May at 415,064, the number was still 12% higher than a year earlier. PAL officials declined to comment on the results. Claire S. Quiray of brokerage Accord Capital Equities Corp. said increased air travel during an economic slowdown was odd. She said one explanation is that the "holiday economics" of the Arroyo administration, which tries to stimulate consumer spending by moving national nonworking holidays to Mondays for a longer weekend, might be working. Another reason for the increase in air travel is that those who can afford air travel are not as affected by the economic slowdown as other sectors of the economy. Otherwise, "it does not make sense."