During a business forum on Monday, leaders of AirAsia Philippines, Cebu Pacific, and Philippine Airlines identified new growth areas overseas, including and Japan and India, to help offset weak demand from the Chinese mainland.
“The challenge to us is China, which used to be a huge 30 percent of our total passenger traffic in 2019,” Ricardo Isla, CEO of AirAsia Philippines, said during the Economic Journalists Association of the Philippines-San Miguel Corp. aviation forum.
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Domestic carriers are preparing for expansion as Manila’s Ninoy Aquino International Airport is set to be privatized by an SMC-led consortium on Sept. 14 this year.
Cebu Pacific has already announced a historic aircraft order last July, while Philippine Airlines aims to surpass its pre-pandemic fleet of around 90 planes in the coming years.
AirAsia PH to wind down China operations
“We used to travel to seven cities in China. Now, we restarted with four cities, we reduced to two cities and by fourth quarter, no more China flights for us,” he said.
“At the end of the day we have to make sure we are building profitability,” Isla said.
Cebu Pacific: positioning for growth
“There are some issues between the Philippines and China,” Xander Lao, the president and chief commercial officer of Cebu Pacific, said during the forum.
Assuming those issues will be resolved over time, he said " the question the Philippines has to ask is how to position ourselves to be more competitive among our Asean peers."
New markets for PAL
Philippine Airlines president Stanley Ng said new destinations under study include Europe and India, which has promising growth prospects.
“The growth is really good, it’s like the Philippines with its growing middle class and more people are traveling,” Ng said.
Developing international provincial hubs
For Cebu Pacific, Lao said expansion moves include the recently-launched Kaohsiung in Taiwan and Chiang Mia, Thailand, which will be launched next month.
Lao said they’re also opening new international routes from Iloilo (to Singapore and Hong Kong) and also from Davao, one of the country’s busiest gateways.
AirAsia is bullish on Japan
Isla said AirAsia Philippines will launch Manila-Nagoya flights by the end of October and trips to Okinawa by the first quarter of 2025, becoming the first Philippines-based airline to cater to Japan’s southern islands.
Other new routes in the first quarter include Penang in Malaysia and Phnom Penh in Cambodia.
“We are taking on the China challenge and [we can build more] muscle in countries like Thailand, Malaysia and Japan,” Isla said.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
