Cebu Pacific has signed an agreement with Switzerland-based IPR Conversions to convert two of its ATR 72-500 passenger aircraft into freighters, driven by domestic e-commerce demand.
The move will make Cebu Pacific the only passenger airline in Philippines with dedicated maindeck capacity. The low-cost carrier with predominantly a Southeast Asian network and an extensive domestic network is a key logistics partner of Alibaba-owned Lazada, the dominant e-commerce platform in the country. E-commerce in the Philippines has been severely hampered by Customs issues, with rampant corruption slowing the growth of cross-border e-commerce into the country, but something Lazada has managed to overcome.
“We will be able to offer cargo capacity that no other carrier in the Philippines can provide,” said Lance Gokongwei, president and CEO of Cebu Pacific.
“With the freighter aircraft, we will further support the growing needs of the logistics industry, especially as the Philippines’ e-commerce businesses expand rapidly and look for faster delivery schedules,” he added.
Cebu Pacific expects to receive the first of two converted aircraft in the fourth quarter of 2018. The cargo aircraft will continue to be operated through Cebu Pacific’s wholly owned subsidiary, CebGo.
IPR Conversions, based in Lausanne, Switzerland, is a leading ATR freighter conversion service provider. The conversion of two of CEB’s passenger ATR 72-500 aircraft into dedicated air freighters involves the installation of a large cargo door, allowing standard containers and pallets used throughout the aviation industry to be loaded.
The aircraft will have capacity for seven AKE Unit Load Device (ULD) containers, and will be able to carry more than seven tonnes of cargo.
Both aircraft will be converted at the facility of Sabena Technics DNR S.A.S. in Dinard, France. Sabena is one of France’s leading maintenance and modification services providers for both civilian and military aircraft.
Cebu Pacific has about 50 per cent market share for domestic air cargo, currently utilising belly space of its largely A319/320 passenger aircraft fleet.
Between January and March 2018, Cebu Pacific carried 34,765 kgs of cargo while its CebGo domestic low cost division uplifted 1,033 kgs of cargo, according to the Philippines Department of Transportation, Civil Aeronautics Board.
The other dominant carrier, Philippine Airlines uplifted 11,392 kgs of cargo over the same period with its domestic low cost division, PAL Express, uplifting 17,785 kgs of cargo.
Cebu Pacific’s cargo services have grown considerably, with revenues growing 29 per cent in 2017, to PHP 4.6 billion (USD 86 million); and 26 per cent in the first quarter of 2018, to PHP1.3 billion (USD 24 million).