Talk of CebuPac-Tiger deal prompts call for new players

Posted at 01/07/2014 6:30 PM | Updated as of 01/07/2014 6:30 PM

MANILA – The Centre for Aviation (CAPA) is urging aviation authorities in the Philippines to open the industry to new entrants with the possible acquisition by Cebu Air Inc. (Cebu Pacific) of Tiger Airways Philippines.

CAPA said authorities should “leave the door open” for new entrants as the slots at the Ninoy Aquino International Airport (NAIA) will be dominated by the major players Cebu Pacific, flag carrier Philippine Airlines (PAL), and AirAsia Zest.

“Philippine authorities however should think carefully and leave the door open for potential new entrants. As more slots at Manila become available in the future, rules can be put in place to give priority to new entrants,” CAPA stated in its latest analysis entitled “Cebu Pacific eyes TigerAir Philippines. Should Philippine authorities allow a takeover?”

CAPA said having three main players along with several smaller regional carriers may be sufficient for a domestic market the size of the Philippines.

CAPA also said if the acquisition of TigerAir pushes through, it is “a smart strategic move” on the part of Cebu Pacific.

An acquisition will increase Cebu Pacific’s share of scheduled commercial aircraft slots at Manila to around 38 percent compared to PAL's 35 percent.

“Cebu Pacific could use the additional slots to expand its already leading share of the domestic market or support further international expansion, where it is still smaller than PAL,” CAPA said.