Saturday, March 22, 2014

Emirates Cancels Clark Route

Emirates will be cancelling its route between Clark International Airport and Dubai beginning on May 3, 2014 just 7 months after the route was launched at the start of October 2013. 

The route was launched with much fanfare as the first long haul route to be operated out of a Philippine gateway other than Ninoy Aquino International Airport in Manila. But stiff competition and new capacity from Philippine Airlines, PAL Express, and Cebu Pacific undercut any hopes of the route's survival.

Earlier this year, the Centre for Aviation published a report indicating that the United Arab Emirates-Philippines market wassuffering from overcapacity. In the report, it was stated that capacity reductions are inevitable after 24 weekly non-stop flights were added between the two countries in the fourth quarter of 2013. 

Fares dropped to record low levels as the three Philippine carriers dumped capacity into the market while struggling to fill their new A330 aircraft. The Centre for Aviation warned that load factors could only be sustainable during peak periods and that if capacity was not reduced for the rest of the year, losses were likely for all carriers.

Although considerable traffic exists between the two nations, yields are typically low with seasonal fluctuations. All Philippine carriers virtually entered the market at the same time which ultimately undercut Emirates as well. Emirates was already serving Manila with three daily flights when it added a fourth to Clark using a Boeing 777-300ER.

While Emirates had an advantage over Philippine carriers of being able to backfill flights with connecting passengers bound for other parts of the Middle East, Africa, and Europe, it was unlikely that the airline would not be impacted in any way by the new capacity added by the three Philippine carriers. By the end of October 2013, Emirates was already flying double the capacity it had to the Philippines in 2012 on top of the capacity added by Philippine carriers. 

It was widely believed at the time that Etihad would follow suit with service between Clark and Abu Dhabi after Qatar revealed that it would launch a daily service between Clark and Doha on October 28, 2013. However, Etihad wisely chose to maintain its existing two daily flights to Manila with no increases in capacity. Etihad has not boosted capacity to the Philippines since it introduced its second daily flight to Manila in November 2011.

Cebu Pacific, PAL Express, and Philippine Airlines have all had the advantage of offering domestic connections to passengers but that has not spared any of them from the challenging market conditions. Cebu Pacific was forced to scale back service in January and February 2014 down to five weekly flights from its previous schedule of daily flights as it learned to adapt to the seasonal fluctuations of the market. However, the carrier increased frequency back to six weekly flights for March with a plan of restoring daily flights in preparation for Easter. Meanwhile, PAL Express recently announced that it will be increasing its flights to Dubai at the end of March up to six weekly flights using its Airbus A330 aircraft. 

The last Emirates flight to Clark will depart on May 3, 2014 served by a Boeing 777-300ER aircraft. For the month of April, the airline will continue to operate a daily schedule as follows:

EK338 DXB0400 – 1620CRK 77W D
EK339 CRK1800 – 2305DXB 77W D

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