Carriers hold discussions with manufacturers as domestic competition gets hotter

ATR and Bombardier are close to their first new-aircraft sales deals in the Philippines, where competition on regional routes is expected to intensify later this year.

Industry sources say Air Philippines, Cebu Pacific and Seair are all looking to order new turboprop aircraft and deals with at least two of the carriers are considered close. The deals will be market-opening ones as the Philippines until now has been home only to older turboprop types.

The sources say Air Philippines, which now operates Boeing 737-200s, but which in the past operated NAMC YS-11 turboprops, is close to placing firm orders with Bombardier for three Dash 8 Q300s, for delivery in November, February and April.

The Air Philippines deal with Bombardier, which has been negotiated on the carrier's behalf by Philippine Airlines, would also include three options. PAL and Air Philippines are run separately, but both are controlled by local tycoon Lucio Tan.

Low-cost carrier Cebu Pacific is, meanwhile, also close to a turboprop deal, the sources say, and it is expected to opt for larger ATR 72s. Cebu Pacific currently only operates Airbus A320-family narrowbodies on domestic and international routes.

If deals are formalised, Air Philippines and Cebu Pacific will use their new turboprops to challenge smaller operators Asian Spirit and Seair, which operate older turboprop types such as Let L-410s, de Havilland Canada Dash 7s and Dornier 328s.

The smaller carriers make most of their money from services between Manila and Caticlan, which is a gateway to the tourist island of Boracay, and Air Philippines and Cebu Pacific will use new aircraft to challenge them on this and other regional domestic routes. The aircraft may also be used on short-haul international routes.

Seair confirms that with the prospect of new competition it too is looking at ordering ATR or Bombardier aircraft and is in talks with both manufacturers. Air Philippines and Cebu Pacific are looking to add smaller aircraft as both Asian Spirit and Seair are seeking to challenge them on traditional narrowbody routes.

Source: Flight International