After weathering the turbulence of the pandemic, the Philippine aviation industry finds itself with clear skies and a bright future ahead.
Passenger traffic skyrocketed 63.31 percent in 2023, reaching a total of 53.77 million passengers compared to 32.33 million in 2022.
The impressive growth was driven by the strong performance of domestic travel. A record-breaking 28.96 million passengers flew domestically in 2023, marking the highest number in the past three years.
International travel also saw a significant upswing, surging 152.39 percent in 2023 to 24.81 million from just 9.83 million in 2022.
Industry leaders are optimistic about the future of the local aviation sector. Christoph Gartner, vice president of network planning for Philippine Airlines (PAL), highlights the Philippines’ strong economic growth, rising middle class and strategic location as key ingredients for continued expansion.
“So I think all the ingredients are there for the Philippine market to grow in the future,” Gartner said.
Return to normal growth
Adding to the positive outlook, Anna Isabel Bengzon, PAL’s chief financial officer, projects a return to “normal growth” for the airline in 2024, anticipating a high single-digit passenger increase.
The flag carrier reported a net income of $379 million (P21 billion) last year, up 92 percent from $197 million (P11 billion) logged in 2022.
PAL’s total net revenues grew 27 percent from $2.6 billion (P139 billion) to $3.2 billion (P181 billion).
Rival Cebu Pacific of the Gokongwei family also said that the prospects for the airline industry in the Philippines remain promising.
The budget airline said the demand for air travel is projected to increase in the coming years, underpinned by infrastructure developments toward easing airport congestion and improving connectivity.
“This will be further supported by the optimistic economic growth outlook for the Philippines and the broader Southeast Asia region,” it said.
“A return of the global aviation industry to normal growth patterns is expected in 2024. International recovery will still be a major focus for most Asia-Pacific airlines, with mainland China’s demand and traffic rebound considered as crucial factors toward the region’s return to pre-pandemic levels,” Cebu Pacific said.
Cebu Pacific president Alexander Lao said Cebu Pacific expects to grow its capacity by 5 percent to 8 percent this year.
“We’re pretty confident in reaching the higher end of that growth projection in terms of overall capacity. Normally, we would grow our passenger count by maybe 1 or 2 points higher than capacity,” he said.
The budget airline posted a net income of P7.9 billion last year, a turnaround from the P14-billion net loss in 2022.
Cebu Pacific generated P90.6 billion in revenue in 2023, a 60-percent increase from the previous year.
Ricky Isla, chief executive of AirAsia Philippines, said the airline would continue to strengthen its domestic presence this year while leveraging on its strong route network across Asean and beyond.
“The full return of our pre pandemic fleet this 2024 is seen to optimize flight frequency, re-activate previously shelved destinations, and open more international routes that will satisfy the travel needs of our guests,” Isla said.
Isla earlier said AirAsia Philippines plans to reactivate its entire fleet in the third quarter of the year as it reopens more domestic and international routes
