Budget carrier Cebu Pacific expects $5 million in foregone revenues due to the six-month closure of Boracay Island, according to the report of the Centre for Asia Pacific Aviation.
Citing executives from Cebu Pacific, CAPA said the budget airline’s Caticlan and Kalibo flights accounted for 6 percent to 7 percent of its total traffic and six percent of total revenue.
“The group said that under the worst case scenario the six month closure of Boracay will have a $5-million impact on its bottom line,” CAPA said.
“However, the $5 million impact assumes Cebu Pacific is unable to recover some of these losses by increasing operations on other routes. Depending on the success of capacity redeployment efforts, Cebu Pacific believes the financial impact will be closer to $3 million,” it added.
Despite the closure, Cebu Pacific will initially maintain a small number of flights in Caticlan and Kalibo to cater to local residents
To serve local residents and ensure continuity of commerce in Northern Panay island, Cebu Pacific will operate a number of flights for Kalibo and Caticlan from April 26 to October 27.
Cebu Pacific is the market leader at Caticlan, accounting for 42 percent of total seat capacity. This includes a 14-percent share of its turboprop subsidiary Cebgo and 28 percent of its main jet operation.
Philippine AirAsia currently has a 33-percent share of seat capacity at Caticlan, while PAL has only 23 percent.
All of PAL’s flights at Caticlan are run by the domestic subsidiary PAL Express, which operates A320 family aircraft and Dash 8 turboprops. The balance of 3 percent of seat capacity at Caticlan is generated by the small independent regional airlines AirSWIFT and SkyJet
CAPA said a six month closure meant the island will likely only attract 1 million total visitors this year, compared with approximately 2 million in 2017, including domestic tourists.
Visitor numbers to Boracay increased 7 percent in March to 172,000.
CAPA said about one million of the 6.6 million overseas visitors to the Philippines in 2017 stopped in Boracay.
Boracay is popular with Chinese and South Korean visitors, which are the largest markets for the Philippines tourism industry. Chinese visitor numbers to the Philippines increased 43 percent in 2017 to nearly 1 million, while South Korean visitor numbers were up 9 percent to 1.6 million.