My recent post on Cebu Pacific delays and consumer advocacy got me thinking the other day… Why isn’t there more intelligent and analytical coverage of service industries in this country? Are writers and publishers so afraid that this kind of reporting will kill off paid advertising? I often turn the pages of the local papers and lament the lack of interesting content, and often rattle off several potential articles that I would like to read instead… Many topics require extensive research and analysis, but others may only need a few hours of simple googling to form the kernel of an article that will at least get people to think and act intelligently. I felt this way several times in the past, and once got annoyed enough to write this simple post (which took days of work) on pricing arbitrage (differentials) for a limited number of items at 5 Manila groceries, which I have now retitled as Marketman’s “Consumer Report #1.” For Report # 2, I started with an obvious premise, that I and the vast majority of the readers of this blog assume that Cebu Pacific, with its dodgy on-time performance, refund policies, etc., MUST have significantly lower ticket prices than its main rival, Philippine Airlines. True or false?
I randomly selected 10 different flights (2 to Cebu) and 8 other popular local destinations that probably account for 80+% of all local air passenger traffic. Then I selected a time of day, morning, afternoon, all day for each destination, without checking any prices. Then I randomly selected 3 day travel periods throughout the month of June 2009, without paying attention to flight days (as mid-weeks are generally less busy). Then I went on Cebu Pacific and Philippine Airlines websites and checked on the cheapest available standard fare (no extra promos, with normal luggage, etc.) for the date and time specified. I realize this is a tiny sample, but you will still be surprised by the results, I know I certainly was.
Here are the results, based on hypothetical bookings made last Thursday night. Prices do change often as planes fill up. My apologies for the lack of tables, I don’t know how to do that on this blog software… Oh and I should say that the VAST majority of tickets booked at these airlines are NOT the super low sounding promo fares, those are alloted a limited percentage of seats on each flight… most are booked at their published rates on their websites.
Trip #1 : Manila – Cebu – Manila (18-21 June 2009) Morning Flights
CEBU PACIFIC: PHP2,717.12 Dep 0800 / Ret 0945
PHIL. AIRLINES : PHP3,192.00 Dep 0730 / Ret 0945
Trip #2 : Manila – Cebu – Manila (12-15 June 2009) Evening Flights
CEBU PACIFIC: PHP4,166.40 Dep 2015 / Ret 2105
PHIL. AIRLINES : PHP3,253.00 Dep 2000 / Ret 2015
Trip #3 : Manila – Davao – Manila (15-18 June 2009) Morning Flights
CEBU PACIFIC: PHP5,097.12 Dep 0755 / Ret 0630
PHIL. AIRLINES : PHP5,210.00 Dep 1015 / Ret 0725
Trip #4 : Manila – Zamboanga – Manila (19-22 June 2009) Anytime
CEBU PACIFIC: PHP4,253.76 Dep 1440 / Ret 1645
PHIL. AIRLINES : PHP2,793.00 Dep 2000 / Ret 1700
Trip #5 : Manila – Bacolod – Manila (23-26 June 2009) Aft/Eve
CEBU PACIFIC: PHP1,655.36 Dep 1715 / Ret 1525
PHIL. AIRLINES : PHP2,793.00 Dep 1710 / Ret 1905
Trip #6 : Manila – Tagbiliaran – Manila (26-29 June 2009) Anytime
CEBU PACIFIC: PHP3,346.56 Dep 0615 / Ret 0800
PHIL. AIRLINES : PHP2,793.00 Dep 1500 / Ret 1000
Trip #7 : Manila – Caticlan – Manila (30-03 Jul 2009) Morning
CEBU PACIFIC: PHP3,105.76 Dep 0825 / Ret 0840
PHIL. AIRLINES : PHP2,793.00 Dep 0610 / Ret 0745
Trip #8 : Manila – Laoag – Manila (24-27 June 2009) Only Flight
CEBU PACIFIC: PHP2,536.88 Dep 1810 / Ret 1955
PHIL. AIRLINES : PHP3,217.00 Dep 0545 / Ret 1150
Trip #9 : Manila – Legaspi – Manila (02-05 June 2009) Morning
CEBU PACIFIC: PHP2,336.32 Dep 1025 / Ret 1150
PHIL. AIRLINES : PHP2,213.00 Dep 0640 / Ret 0820
Trip #10 : Manila – Busuanga – Manila (24-27 June 2009) Morning
CEBU PACIFIC: PHP1,454.88 Dep 1320 / Ret 1440?
PHIL. AIRLINES : PHP2,213.00 Dep 1300 / Ret 1430
Surprised? I was definitely shocked to see that Cebu Pacific was only cheaper on 5 out of 10 flights. And the difference in price, for most legs, was less than the cost of a hot dog and diet coke in case the flight was delayed! Even more surprising, if I bought all of these tickets as stated, the total cost of 10 tickets would have been:
Cebu Pacific PHP30,680.16
Philippine Airlines PHP30,470.00
Yes, Philippine Airlines was actually LESS EXPENSIVE. Hello?! Good grief, I realize this is a small sample, but what it tells you is that MANY people may have a mistaken impression about false economies and savings with respect to domestic airline tickets. Penny wise, pound foolish I say. Actually, I hope more and more people do make illogical, irrational purchasing decisions, so that way there will be more seats left on PAL for me. :) The moral of the story? Hmmm, I will leave that up to you to conclude.