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PH airlines primed to take bigger share of commercial air traffic

business / Editors' Picks
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PH airlines primed to take bigger share of commercial air traffic

Aided by industry consolidation in recent years, the Philippines is set to catch up with regional peers and become the third-fastest growing market for commercial aviation in 2016, according to an aviation think tank.

Capa Center for Aviation said in a report the country already posted “high” single digit growth in terms of passenger volume in 2015. The top three growth markets were Thailand, Vietnam and Cambodia, each with double digit growth, it said.

However, Capa noted Cambodia’s tourism sector was showing a slowdown, while the Philippines was seeing an upswing in demand “boosted by a surging economy.”

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Last year, the Philippines saw domestic passenger growth at 8.5 percent to 22.1 million flyers, and 10.5 percent on the international side to 19.8 million. That means total passenger growth last year was at 9.4 percent.

“Growth in the Philippines will likely again be in the high single digits—or even perhaps the low double digits—in 2016. It was the fourth fastest-growing market in Southeast Asia, but could be the third fastest-growing in 2016 as growth in Cambodia slows,” Capa said.

Low oil prices have helped profitability, as well as the acquisition by Cebu Pacific of Tiger Airways (now called Cebgo) in 2014. That left just three main players in the domestic space: Philippine Airlines, Cebu Pacific and Philippines Air Asia.

Capa said growth was also being driven by massive re-fleeting activities, especially by the region’s low-cost carriers.

In a separate report, Capa said regional low-cost carrier fleets were growing, albeit at a slower pace. The 21 budget airlines in the region are now operating close to 600 planes, about 50 more than the start of 2013. This year, Capa projected their combined fleet to grow by 10 percent.

Cebu Pacific is tied with Indonesia’s Wings Air as the operator with the third largest fleet, each with 49 planes, data from Capa showed.  The top two are Indonesia’s Lion Air (113 planes) and Malaysia’s Air Asia (81 planes).

“While the rate of growth has been slowing, the order book suggests at some point the rate of low cost carrier growth in Southeast Asia will re-accelerate,” Capa said.

It added Southeast Asian budget carriers currently have over 1,100 orders, including almost 90 wide-body aircraft.

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TAGS: airlines, Business, economy, News, PH, Philippines
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