ANALYSIS: Philippines set to see connections to Europe grow

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Cebu Pacific’s impending removal from the European blacklist of banned operators could spell good news for Filipinos looking for options in the under-served Philippine-Europe market.

Flightglobal’s FlightMaps Analytics shows that flag carrier Philippine Airlines (PAL) and KLM Royal Dutch Airlines are the only carriers currently operating services between the Philippines and European countries.

There are only two European destinations - Amsterdam and London - served from Manila’s Ninoy Aquino International Airport through scheduled passenger flights.

PAL launched the five times weekly service from Manila to London Heathrow using Boeing 777-300ERs only last November, after it became the first Philippine carrier to be removed from the EU ban list. It also operates a chartered service to Vladivostok in Russia.

Philippine direct services to European countries

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FlightMaps Analytics

Flightglobal’s Capstats database shows that seats from Manila to Europe have stayed relatively constant throughout the years. In 2009, there were 140,375 seats on the Manila-Amsterdam route. The figure dropped to 127,304 in 2011 and 127,913 in 2013.

This means that a portion of those travelling from the Philippines to Europe probably do so through connections at a hub, such as Singapore, Hong Kong or even Japan.

Capstats shows that in 2013, passengers at Changi Airport had direct flights to 13 points in Europe, through 2.8 million seats offered by nine airlines. Ten airlines meanwhile offered a total of 2.3 million seats between Hong Kong and Europe in 2013.

Connections to Europe from the Philippines however look set to improve since PAL has indicated plans to launch services to destinations such as Paris, Frankfurt, Amsterdam, Rome and Madrid. Cebu Pacific's impending removal from the EU ban list - the country's civil aviation authority is expected to make an announcement on 10 April - also puts pressure on PAL to bring those European route launches forward to gain a first mover advantage.

The low-cost carrier's general manager for long-haul Alex Reyes has previously told Flightglobal that the airline was looking at launching European services after the removal of the EU ban, since its Airbus A330s would allow it to reach some parts of the continent non-stop. In fact, Cebu Pacific has applied for rights to fly to Italy and also Moscow.

These European routes would however focus largely on outbound and inbound tourist traffic, rather than Filipinos working overseas, which has so far been the primary focus of Cebu Pacific’s long-haul arm.

The low-cost long-haul operations, which launched last October, would however likely start services to Europe only in the longer term, when its business stabilises. The young unit is still losing money and booking rather low load factors as it learns to play a different ball game in a more challenging market. Operating long-haul also means Cebu Pacific loses the aircraft utilisation advantage it typically has on short-haul routes over legacy carriers.

The carrier now has three A330s, which it deploys on the Manila-Dubai route and also some regional services, and will take delivery of another three of the type this year. The carrier has said the incoming aircraft will first be used to start services to Saudi Arabia and Australia.

Why Europe is so under-served from Philippines would require a look back to 1998 when PAL dropped all services to Europe and many other markets in a bid to save itself from bankruptcy. Thereafter plans to restart services to Europe never materialised and instead PAL entered into several codeshare agreements with carriers such as Air France and KLM. The EU then imposed a blanket ban on Philippine operators in 2010.