Airline Industry of the Philippines Philippines 1. SCOPE OF PRESENTATION θ Timeline of Airline Industry in the Philippines θ Philippine Aviation Fiures θ!ar"et Shares θ#ey Airlines in the Philippines as of $%1$ θ Porter&s Five For'es θ PEST(E Analysis $. TI!E(INE OF AIR(INE IN)*STR+ IN T,E P,I(IPPINES - 1/10 Creation Crea tion of Offi'e under the )epartment of Commer'e and Communi'ations to handle aviation matters. - 110 Philippine Airlines 2as founded. - 13$0 Reorani4ation of the Civil Aeronauti's 5oard and the Civil Aeronauti's Administration 6Repu7li' A't No 889: - 18/0 Philippine Airlines Airlines 6PA(: 6PA(: 2as ranted had a virtual monopoly of the 'ountry&s 'ivil aviation industry industr y - 180 PA( 7e'omes a monopoly in domesti' travel. /. TI!E(INE OF AIR(INE IN)*STR+ IN T,E P,I(IPPINES - 18;0 PA( PA( 2as iven a ne2 fran'hise 7ut 2ith a provision ¬
uen'ies as 2ell as overnment 'ontrol on fares 2ere removed ¬ En'ouraed at least t2o operators in any route ¬ !ar"ets 2ith at least t2o operators are dereulated 2ith reard to fare - 10 PA(& PA(&s s mar"et share s hare de'reased sinifi'antly Competition intensified . AIRPORTS IN T,E . AIRPORTS T,E P,I(IPPINES As of %/ ?uly $%1 11 International Airports $9 )omesti' Airports 3. AIR(INES IN T,E P,I(IPPINES CO!!ERCIA( AIR(INES Airline Callsin 3. AIR(INES Commen'ed Operations AirAsia @est @EST AIRA+S AIRA+S 13 Ce7u Pa'ifi' CE5* AIR 19 ITI Air Air B PA( PA( EDpress P,I(IPPINE 19 Philipines Philipines AirAsia AirAsia P,I(TRA $%1 Philippine Airlines P,I(IPPINE 11 Philippines AirAsia COO( RE) $%1% S"y Pasada $%1% S"y?et B $%1$ Tierair Philippines SEAIR 13 9. AIR(INES IN T,E P,I(IPPINES C,ARTERE) AIR(INES Airline Callsin 9. AIR(INES Callsin Commen'ed Operations Aero !aesti' Air2ays Air (in" International Air2ays Air Repu7li> Airlines $%11 Aviatour Aviatour Air Cy'lone Air2ays 19% Paradise Air INAEC G IloiloBNeros Air 1// EDpress Interisland Airlines TRIB5IR) Island Aviation Aviation SORIANO 8. AIR(INES IN T,E P,I(IPPINES C,ARTERE) AIR(INES Airline Callsin 8. AIR(INES Callsin Commen'ed Operations (ionair !osphil Aero !OSP,I( $%%9 Norths"y Air Pa'ifi'air Pa'ifi' Pearl Air2ays PACIFIC PEAR( $%%9 S"y?et $%1$ South PhoeniD Airlines $%1% Su7i' Seaplane Air Pa'ifi'
;. AIR(INES IN T,E P,I(IPPINES CAR "m <)P per Capita *S) $91 Tourists Arrivals ./! )omesti' Air Passeners Int&l Air $%.9! Passeners 19.8! (CC Penetration Rate 6)omesti': 8;.%= (CC Penetration Rate 6Int&l: $;./%= 1%. P,I(IPPINE AHIATION IN FI<*RES Private Airports a''ounted for 3;.1= of the total reistered airports in the 'ountry in $%1%. Out of the ;3 national airports operatin in the 'ountry in $%1% /; or .8= are in (u4on $$ or $3.= are in the Hisayas and the remainin $3 or $.= are in !indanao. Total passener movement in the 'ountry&s airports in'reased from 1. !illion in $%%1 to 3$.1 !illion in $%11 in'reasin at an averae rate of 1%.1= per annum. !ore than half 63/.=: of total passeners in the NCR airports in $%1% 2ere domesti' passeners. Air'raft movement in'reased from //%/ in $%%1 at an averae rate of /.= per annum. The NCR a''ounted for the 7iest share of 1.= of the total movement. 11. P,I(IPPINE AHIATION IN FI<*RES 8% Reistered Airports $%%1B$%1% ;8 8; 111 11; 11; 11; 11; 11; 11; 1% 1$% 1%% ;% 9% % $% % $%%1 $%%$ $%%/ $%% $%%3 $%%9 $%%8 $%%; $%% $%1% National Private 1$. P,I(IPPINE AHIATION IN FI<*RES 9% 3% % /% $% 1% % $%%1 $%%$ $%%/ $%% $%%3 $%%9 $%%8 $%%; $%% $%1% $%11 in millions Num7er of Passener !ovement $%%1B$%11 1/. P,I(IPPINE AHIATION IN FI<*RES %.8% %.93 %.9% %.33 %.3% %.3 %.% %./3 %./% %.$3 %.$% $%%1 $%%$ $%%/ $%% $%%3 $%%9 $%%8 $%%; $%% $%1% $%11 in millions Num7er of Air'raft !ovement $%%1B$%11 1. P,I(IPPINE AHIATION IN FI<*RES #orea *SA ?apan China Tai2an Australia Sinapore Canada ,on #on !alaysia Others $= 13= 1%= 9= 3= = /= /= /= /= $= In7ound of Tourists 7y Country of Oriin $%1$ 13. P,I(IPPINE AHIATION IN FI<*RES $%% Annual Survey of Philippine 5usiness and Industry 6ASP5I: J Transport Storae and Communi'ations for all Esta7lishments K Final Results PARTIC*(ARS TOTA( 6in millions: SC,E)*(E) AIR TRANSPORT 6in millions: Employment %.1; %.%%$/ Halue Added 6P,P: $8%% $398%% Compensation 6P,P: 9$1%% $%% Revenue 6P,P: 38;/%% 81%% Cost for Operatin 6P,P: /;$%% ;;%% (a7or Produ'tivity 6P,P: $.$%L Lsurpassed the national averae of P1.!
19. )O!ESTIC !AR#ET S,ARE 6= of Seats: .%= 1.$%= 1;.9%= 1$.;%= .9%= Ce7u Pa'ifi' Philippine Airlines PA( EDpress Air AsiaG@est Tier SEAir 18. INTERNATIONA( !AR#ET S,ARE 6= of Seats: 19.%= $/.$%= 8./%= /.3%= /.%= $.8%= /9.$%= /./%= /.%= Ce7u Pa'ifi' Philippine Airlines Cathay Pa'ifi' #orean Air Sinapore Airlines Asiana Airlines Emirates @est Air Other 1;. P,I(IPPINE AIR(INES 6PA(: )estinations0 $ domesti' /1 international Fleet 0 % O2ners0 (u'ioTan and San !iuel roups - Aims to reBenter the European mar"et and eDpand in North !ar"et - PA( a''ounts for 1;= of total lo'al 'apa'ity. - PA(Ms fleet moderni4ation proram has lifted the 'ountryMs imports portfolio in ?uly and has led the t2o lo7al iant air'raft manufa'turers BB Air7us and 5oein BB s'ram7lin for PA(Ms orders. In Auust PA( pla'ed a *S8 7illion order the 7iest airline deal in Philippine aviation history. 1. CE5* PACIFIC )estinations 0 /$ domesti' 1 international Fleet 0 1 O2ners0 uired a sta"e in PA( in April. $1. SEAIR )estinations0 1% domesti' 3 international Fleet 0 3 O2ners0 Tier Air2ays Filipino partners - SEAIR 2as the first airline lo'ator at Clar"field Pampana no2 a maor aviation hu7. - A2arded 5est Airline of the +ear for $%%$ $%%/ and $%% 7y the Philippines& Consumer ED'ellen'e A2ard. In $%1% SEAIR 2as a2arded uirements 2ithout a stron 'ustomer 7ase Customer tends to 'hoose 2ellB"no2n 7rands for safety and se'urity reasons Stron eDistin player Stri't reulations implemented
$9. PORTER&S FIHE FORCES (o2 s2it'hin 'osts 7et2een airlines 7e'ause 'hoi'es 2ill 7e 7ased on destinations 'ost and time Ea'h airline has a ni'he i.e. some fo'us on 'ost 2hile other on amenities Tiht reulations on the side of the 7uyersGfliers 5arainin Po2er of 5uyers $8. PORTER&S FIHE FORCES (i"eliness of su7stitutes in terms of trains and 7us is very minimal. Threat of su7stitute for reional airlines is hiher than international 'arriers Threat of Su7stitutes $;. PORTER&S FIHE FORCES !ain 'omponents needed for an airline 'ompanies are fuel air'raft and la7or Airline 'ompanies 'annot easily s2it'h suppliers for there are only fe2 eDistin suppliers. !ost airline 'ompanies have lon term 'ontra'ts 2ith their suppliers Chane of pri'es 7y suppliers 'ould mean a sinifi'ant finan'ial 'hane to the airlines (i"elihood of a Supplier to interate verti'ally is lo2 5arainin Po2er of Suppliers $. PORTER&S FIHE FORCES The num7er of 'ompetitors stays the same for a lon run. 5rand identities differ on different airlines. FiDed 'osts are eDtremely hih in this industry Intense pri'e 'ompetition Rivalry /%. PEST(E ANA(+SIS P S E T PO(ITICA( ( E (Euipment and fuel. //. SOCIA( In'reasin num7er of Philippine population. In'reasin num7er of flyers. (are and 'ontinuously in'reasin mar"et for airline firms. Customers are no2 pri'eBsensitive ith the introdu'tion of ele'troni' messain and so'ial media air travel for 7usiness meetins are redu'ed. Flyers are 2ellBinformed of the servi'es of the airline firms. /. TEC,NO(O
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