Domestic air travel market seen growing despite Boracay closure as other markets develop

BusinessWorld Online

AVIATION think tank Centre for Asia Pacific Aviation (CAPA) said the domestic air travel market will continue growing this year despite the six-month closure of Boracay.

“The six-month closure of Boracay, the most popular destination in the Philippines for both domestic and foreign tourists, will impact the overall domestic market. However, the market should still be able to achieve growth in 2018,” it said in a report.

“Most domestic flights from Caticlan and Kalibo are from Manila, where domestic routes are generally undersupplied due to the slot restrictions. Philippine carriers are reusing the slots that had been used for Manila-Caticlan and Manila-Kalibo flights to other domestic routes,” the report added.

Cebu Pacific, Philippine Airlines and Philippines AirAsia said in April they will redirect flights serving Caticlan and Kalibo to other destinations due to the government-initiated rehabilitation measures in Boracay.

Cebu Pacific canceled daily flights to and from Caticlan and Kalibo for the period April 26 to Oct. 27. Philippine Airlines has done the same, and expanded the number of flights to other tourist destinations such as Cebu, Iloilo, Puerto Princesa, Bacolod, Busuanga, Siargao, Dumaguete and Cagayan De Oro. AirAsia has added flights to Cebu, Davao, Palawan and Iloilo.

Cebu Pacific kept six flights for Caticlan and Kalibo, Philippine Airlines seven flights for Caticlan and nine for Kalibo, and AirAsia two flights each for Caticlan and Kalibo, to accommodate locals traffic.

CAPA said the Boracay closure will cause a “sharp decline in traffic” for Caticlan and Kalibo this year, noting that Caticlan nearly doubled its seat capacity last year following the extension of its runway in late 2016.

“The extended runway enabled Caticlan to accommodate narrow-body jets, prompting AirAsia to launch services and Cebu Pacific and PAL to upgauge their Manila-Caticlan flights from turboprops. The growth on the Manila-Caticlan route accounted for virtually all of the 2% domestic traffic increase at Manila in 2017,” it said.

But it emphasized that growth in domestic flights is expected to remain strong, as passengers that intended to visit Boracay still have many options.

“The Philippines GDP is expected to grow another 7% in 2018. Demand for domestic air travel will continue to grow as the economy and middle class expand,” the report added.

AirAsia President and Chief Executive Officer (CEO) Dexter M. Comendador told reporters last week that the company maintains a positive outlook for the domestic market in 2018.

“Boracay is just a glitch. There’s Panglao (in Bohol), Puerto Princesa, Davao, Cebu. There are other places,” he said. — Denise A. Valdez


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