PHL 2017 passenger traffic growth seen at 10% — CAPA
AIR TRAFFIC in the Philippines could grow in the double digits this year, the Center for Asia Pacific Aviation (CAPA) said in a report, citing the country’s strong economy, although it remains hampered by persistent infrastructure constraints.
The aviation think tank said in a March 17 report that passenger traffic could experience growth of “approximately 10%” for 2017 as most in Southeast Asia should also continue to experience “rapid growth” in 2017 and beyond led by Vietnam and Myanmar.
“The Philippines had passenger growth of approximately 10% in 2016. The Philippines has the fastest-growing economy in Southeast Asia with its GDP (gross domestic product) expanding by an estimated 6.4% in 2016. Given the economic growth the passenger growth would have been even faster, if it had not been for infrastructure constraints at the capital, Manila,” CAPA said in its report.
For this year, the think tank said the Philippines could record the same level of growth for a third consecutive year, also putting it near the top of the pack among Southeast Asian nations.
However, CAPA noted that overcapacity remains a long-term concern, pressuring yields and profitability. The average profit margin of the Southeast Asian airline sector, it noted, “significantly lagged the global average in 2016, and this trend will likely continue in 2017.”
“Southeast Asia is a relatively small market in the global perspective, accounting for 6% of the global fleet. However, Southeast Asia has been one of the fastest growing and most dynamic regions (or sub regions) for the past 15 years.
Rapid low cost carrier (LCC) expansion has been the main driver of traffic growth — and change — in the Southeast Asian market. The rate of LCC expansion has slowed over the past two years but the overall market has continued to grow rapidly, driven by rapid expansion from some of the region’s full service airlines and foreign airlines,” CAPA said in its report.
It added that in 2016, passenger growth in nearly every Southeast Asian country accelerated compared to 2015 levels. Six countries had growth of at least 9% — Cambodia, Laos, Myanmar, the Philippines, Thailand and Vietnam, while in the key markets — Indonesia, Malaysia and Singapore — the rate of growth accelerated from the low single digits in 2015 to the mid to high single digits in 2016.
Passenger growth in the Philippines was up 10% up in 2015. It handled 42 million passengers, including 22 million domestic passengers (9% growth) and 20 million international passengers (11% growth).