Cebu Pacific and Philippine Airlines are ramping up route activity amid a strong rise in the country’s GDP and plans for a major new Manila airport, writes Mike Miller
Major investment in Philippine aviation infrastructure during an economic boom is leading to a high-growth period for the country’s airlines.
Flag carrier Philippine Airlines (PAL) and high-growth Cebu Pacific Airlines are benefiting from more slots at the capital city airport in Manila and renewed interest from Asian travellers to visit the South Pacific archipelago. Both are adding flights seemingly every month as the country experiences a significant travel boom ahead of a massive new airport opening in 2028.
The Philippines “is getting recognised more and more as a place to visit,” said Cebu Pacific CEO Mike Szucs during Routes World in Hong Kong.
New PAL president Richard Nuttall said the travel boom is due to extensive investment in Manila’s aviation and local infrastructure, as well as investments in other airports within the Philippines. “There’s been a change in Manila from a handful of five-star hotels to a whole new city of five-star hotels,” he said. “It’s just a completely different place.”
Szucs added: “There are 150 million people in the Philippines. It’s a fast-growing country with high GDP growth – in the 5-6% range – and a country with an average age of 26-27. As GDP increases the propensity to travel increases. Overall, whether it’s visiting friends and relatives or travel abroad, there’s plenty of room to grow.”
As Cebu Pacific takes delivery of new aircraft, it expects to open three new domestic bases in the Philippines after Manila and Cebu, Szucs said.
Manila’s existing downtown Ninoy Aquino International Airport has been hamstrung by having only two runways with no chance for a third due to commercial build up around the airport. The government recently shifted turboprop flights out to other regional airports to free up capacity for larger aircraft. That action took effect in October, allowing the airport to increase slots for larger aircraft from 42 per hour to 48. That move is benefitting PAL and Cebu Pacific, both of which are now profitable.
New airport
After the government flirted with, cancelled, and revived airport privatisation efforts, a final deal was reached in February 2024 to continue to build New Manila International Airport in the Bulacan province 35km north of Manila. Work is set to begin next year on the airport which will have four 3,500 metre runways – expandable to six. New Manila eventually will handle 200 million passengers, or six times as many as the current airport – which will remain open.
“The new airport near Manila will give us a unique opportunity for growth,” Cebu’s Szucs said. “We will go there with a sizable number of aircraft in addition to [existing] Manila Airport.”
Cebu last year finalised an order for 102 A320neo-family aircraft, also taking options on 50 more narrowbodies. “Depending on when the new airport is actually completed, we can scale up or scale down our aircraft order,” he said. But he added: “We do however expect to be closer to the 152 maximum number.”
Szucs said Cebu Pacific added 20% capacity in the first half of 2025 “and we filled it.” The country’s strong economy in recent years is translating into better fares and more premium passengers, he added. “The number of people in the Philippines who want to travel in premium airline cabins is growing rapidly. The number is really remarkable.
“Manila will be one of the metropolises of the world in the coming years,” Szucs predicted. Asian travellers are staying closer to home, he said citing recent data. “We have two billion people within four hours flight time of Manila and there’s not very many reasons for us to go further than that.”
Meanwhile, PAL’s fleet expansion plans include delivery of nine A350-1000 aircraft along with 13 A321neo jets. Nuttall, who joined PAL in May, is the former CEO of SriLankan Airlines and has worked globally in aviation. The airline, which has experienced severe financial stress during the last decade “has been profitable for three years, but it’s still a low-margin business,” Nuttall said.
“Nearly two-thirds of our passengers come from domestic markets, so we compete with LCCs,” Nuttall said. “The market is big and we’re stimulating it in different ways.”
Domestic picture
PAL operates to 30 domestic cities and Cebu Pacific 37. Many of the destinations have short runways and few if any navigation aids, meaning that airlines sometimes are forced to cancel flights during bad weather. Some of the country’s out-airport infrastructure improvements will come while the new Manila Airport is built.
Cebu Pacific will lead the country’s growth. During 2024 it began serving both Bangkok airports and added flights to Dan Nang (Vietnam), Chang Mai (Thailand) and Kaohsiung (Taiwan). This year the carrier already has landed in Sapporo (Japan) from Manila, launched Cebu to Osaka and Bangkok, added Davao-Hong Kong and Cebu-Ho Chi Minh City, while expanding domestic service with 18 new inter-island routes.
Domestic traffic has been so strong that Cebu Pacific has been using several of its larger A330neo aircraft on domestic routes. The aircraft have 459 seats in an all-economy configuration.
