InsiderPH learned the Philippine aviation regulator issued today a final demand letter to the carrier via president Suresh Bangah covering P833.7 million in unpaid obligations, giving the airline a non-extendible five-day deadline to settle.
AirAsia Philippines, one of leading domestic carriers alongside Cebu Pacific and Philippine Airlines, is part of the regional AirAsia Group, led by Malaysian tycoon Tony Fernandes.
The said includes unpaid air navigation, landing, and parking fees, as well as unremitted domestic passenger service charges (DPSC) collected from passengers.
“Despite repeated written demands, reconciliation meetings, and follow-ups, the foregoing obligations remain outstanding as of date. This continued non-compliance is a matter of serious concern to the Authority,” CAAP said.
What happened?
An insider familiar with the situation said the amount had been growing over the years, prompting more drastic action despite CAAP’s earlier efforts to accept staggered payments to ease the financial burden on AirAsia Philippines.
The airline’s government debt, including interest payments, could reach or exceed P1 billion, the insider added.
CAAP wants to mitigate holiday travel risk
One major concern was the potential inconvenience this might cause passengers with the busy Holy Week travel season coming.
“We don’t want the passengers to bear the inconvenience,” the insider said, adding they might take calibrated steps like limiting access in certain CAAP-run airports.
This also comes as the aviation sector is impacted by soaring jet fuel costs linked to the US-Iran war as fuel makes up a significant share of operating expenses.
Licenses, access on the line
Sanctions outlined by CAAP include withholding of services and accounting clearances, suspension or non-renewal of licenses and permits, and revocation of access passes within CAAP facilities.
The regulator may also pursue civil and criminal actions to recover the unpaid amounts along with penalties and interest, InsiderPH learned.
Another key area of dispute were DPSC collections, which includes money collected from expired and unutilized tickets.
“It is emphasized that such collections constitute trust funds held for the benefit of CAAP and must therefore be properly accounted for and remitted in accordance with existing regulations and the provisions of the Memorandum of Agreement,” CAAP said.
2025 leadership shift
The AirAsia Group appointed Bangah as president and general manager of AirAsia Philippines in July last year.
He currently leads a growing operation with 15 Airbus A320 aircraft serving a network of domestic and international routes.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
