Airphil Express Marketing Plan

INDUSTRY PROFILE

In the wake of the global economic downturn, one of the hardest hit industries worldwide has been the aviation industry. In early 2009, the Centre for Asia Pacific Aviation (CAPA) reported that passenger demand fell 3.5% with an average load factor of 75.6%. Furthermore, the CAPA and airlines worldwide expected losses of 5.6 billion in 2010. As a result of these, one trend that emerged was company mergers of two, sometimes three airline companies just to cut down on cost and stave off bankruptcy. Another popular trend that has gained prominence during the crisis is the low-cost carrier (LCC) business model.

While the competition from within the aviation industry has intensified with the growth of LCCs, airlines still must also compete with other modes of transportation even for long distance domestic travels. For long distance domestic travels, we may consider buses and private vehicles as primary modes for land based travel and commercial ships for sea based travel. According to the Land Transportation Office (LTO), approximately 5 million vehicles were registered in 2007; 2 million in cars and utility vehicles and 30,000 of which were buses. Meanwhile, sea transport reported 42 million in passenger traffic according to the Philippine Ports Authority (PPA). On the other hand, air transport only generated 26 million in passenger traffic according to the Air Transport Authority (ATO).

Comparing the three transportation modes, we can see that a large part of the domestic passengers market is still dominated by sea transport while there is potential for both sea and air to capture the relatively small percentage held by land based transport

From the list shown above, six carriers are competing commercially: Philippine Airlines, Cebu Pacific, Airphil Express, Zest Air, Seair and Spirit of Manila. The rest offer either domestic charter flights or cargo services. Of these, Philippine Airlines, the flagship carrier of the country, is the only one that offers international flights while Cebu Pacific and Spirit of Manila currently offer the largest number of regional destinations. Airphil Express, Zest Air and Seair offer mostly domestic flights. Recently, Airphil Express opened it's regional flight to Singapore.

In the Philippine domestic flight market, Cebu Pacific is the leading carrier capturing 45.6 percent market share followed by Philippine Airlines, Airphil Express, Zest Air, Seair and lastly, Spirit of Manila Airlines. According to data from the CAAP, Cebu Pacific flew 5.4 million domestic passengers, half a million passengers more than the combined traffic of Philippine Airlines and PAL Express. PAL flew 4.9 million passengers; Air Philippines carried 1.12 million; Zest Air, formerly known as Asian Spirit had 902,935 passengers; and Seair flew 217,885 passengers.

Philippine Aviation

In the Philippines, there are 23 airlines (commercial, chartered and cargo) which currently have an Air Operator Certificate issued by the Civil Aviation Authority of the Philippines (CAAP, formerly ATO).

Mosphil Aero

Pacific East Asia Cargo Airlines

2GO

Pacific Pearl Airways

Air Link International Airways

Philippine Airlines

Airphil Express

South East Asian Airlines

Asia Overnight Express

South Phoenix Airlines

A Soriano Aviation

Spirit of Manila

Cebu Pacific

Subic Air

Corporate Air

Subic Seaplane

Cyclone Airways

TransGlobal Airways

Interisland Airlines

Zest Airways

Island Transvoyager Inc

Laoag Air

Airphil Express Company Profile

Airphil Express, formerly known as Air Philippines was established as a sister company to PAL in 1995 after the Lucio Tan Group acquired it. Recently, it was rebranded Airphil Express as an independent carrier from that of PAL Express.

Airphil Express, according to its mission statement, aims to provide the following:

1. Safe and reliable air transportation with the best service at the least cost to customers

2. Career development and job satisfaction to employees

3. A fair return of investment to its stockholders

Destinations

Bacolod, Busuanga, Cagayan de Oro,

Calbayog,

Catarman,

Caticlan (Boracay),

Cebu,

Davao,

Iloilo, Jolo,

Kalibo,

Legazpi,

Masbate,

Naga,

Ormoc,

Puerto Princesa,

San Jose(Mindoro), Singapore, Surigao, Tacloban, Tagbilaran, Tuguegarao and Zamboanga

Routes

Manila-Bacolod (v.v.)

Manila-Busuanga(v.v.)

Manila -Cagayan de Oro (v.v.)

Manila-Calbayog(v.v.)

Manila-Catarman(v.v.)

Manila-Caticlan(v.v.)

Manila- Davao (v.v.)

Manila-Iloilo (v.v.)

Manila-Kalibo (v.v.)

Manila-Masbate (v.v.)

Manila-Naga (v.v.) Manila-Ormoc (v.v.)

Manila- Puerto Princesa (v.v.)

Manila-San Jose(v.v.)

Manila-Surigao(v.v.)

Manila-Tagbilaran