“The excessive charges at NAIA could defeat any hope of recovery soon”
THE Philippine tourism industry contributes a significant portion of the country’s gross domestic product and is a main source of employment. The share of tourism in our economy reached its highest level in 2023 at 8.6 percent, according to official statistics.
The Philippines actually experienced one of the longest COVID-related lockdowns, and finally re-opened its borders to the world in the first months of 2022. A shift in tourism branding is expected to further increase international visitors in an increasingly competitive post-COVID tourism market.
While the Philippines has encountered political and social challenges that have affected our tourism industry, the government now wants to create a more favorable environment for tourism.
But there are worries that the recent increase in fees at the Ninoy Aquino International Airport could hinder the growth of our travel and tourism sector in the years ahead.
While international visitor arrivals increased last year, it failed to meet the target. The Philippines may face a similar shortfall in 2025 due to the new charges at NAIA.
In 2024, international visitor arrivals grew 9 percent to 5.9 million, but did not reach the 7.7 million target. The Philippines may again miss the 2025 goal of 8.3 million if NAIA, the country’s main gateway, insists on the fee hikes.
Airlines have expressed concern over the increases, including higher passenger service charges and fees for aircraft operations. The price hikes may impact airline expansion plans and add to existing concerns, including foreign exchange fluctuations and geopolitical tensions.
The recent transfer of NAIA’s operations to a private entity has led to significant fee increases, raising concerns among travelers and airlines. These higher costs could discourage travel and negatively impact the industry’s growth.
Despite potential headwinds, airlines are optimistic about the future of travel in the Philippines. This optimism is fueled by factors such as declining jet fuel prices, airport upgrades and fleet expansion plans.
However, the success of the travel sector heavily relies on the government’s commitment to improving airport infrastructure at NAIA.
By Sept. 2025, the passenger terminal fees, also known as passenger service charges, will increase by 72 percent to P950 from P550 for international flights and by 95 percent to P390 from P200 for domestic trips.
The New NAIA Infra Corp., a consortium led by San Miguel Holdings Corp. in partnership with Incheon International Airport Corp., claims that passengers would benefit from the overall improved experience with the adjusted fees.
The fee increases are part of NAIA’s modernization under NNIC, which took over operations on Sept. 14, 2024, in exchange for P170.6 billion the consortium promised to invest in upgrading and rehabilitating the airport.
Car parking charges were also raised substantially from P300 to P1,200 for overnight parking; and from P40 for the first three hours and P15 for every succeeding hour to P50 for the first two hours and P25 for every succeeding hour for short-term parking.
Aside from the terminal and car parking fees, NNIC is also raising aircraft parking fees, landing and take-off fees, and cargo terminal fees.
AirAsia Philippines earlier said they were awaiting the government response to the industry’s plea for intervention at NAIA.
The budget carrier wants a balanced approach that aligns with operational realities in the aviation industry, while prioritizing the welfare of its passengers.
AirAsia Philippines wants to fly 7.5 million passengers this year, confident that the reorganization of its parent firm Capital A Bhd. would lead to fleet and network expansion.
Cebu Pacific, for its part, received 17 aircraft in 2024 and is scheduled to welcome seven more in 2025.
It believes stable fuel prices, the upgrades of multiple airports and the airline’s continued aircraft delivery program give it confidence as it expands its hubs in Manila, Cebu and Clark, while opening two new ones in Iloilo and Davao.
Local airlines were trying to recover from the severe impact of the COVID-19 pandemic and began investing in fleet expansion to meet the rising demand, but the excessive charges at NAIA could defeat any hope of recovery soon.
(Email: ernhil@yahoo.com)