SINGAPORE — Low-cost carrier AirAsia expects its Philippine unit, alongside Indonesia, to grow significantly and perform better than pre-COVID as the local economy recovers and as the country banks on the potential of tourism to rebound from the pandemic.
In a briefing here to launch its return to Changi Airport Terminal 4, AirAsia CEO Tony Fernandes emphasized that among its market operations, the Philippines and Indonesia are seen growing bigger than what they were pre-pandemic.
“Indonesia and the Philippines are really growing very well. And so we want to grow them to a bigger size,” Fernandes said.
For the Philippines, Fernandes noted that the country used to be quiet in terms of its tourism, but has grown to generate potential — particularly in Bohol, Cebu and Davao, among others.
“What’s driving [this] is the economic success of the Philippines plus the country has woken up to the potential of tourism and we want to be one of the drivers to help meet the government’s objectives,” Fernandes said.
“The Philippines also sits on the border of Korea, Japan and China. Filipinos want to travel much more. So we want to capture that international market,” he said.
Further, AirAsia is also seeing some light despite the high commodity prices right now that impact on the purchasing power of consumers.
Fernandes argued that travel continues to be a lifestyle and that discretionary spending or those that apply to the non-essentials remain.
“Travel is a very high part of someone’s discretionary income. And if things are a bit tighter, you will probably use a lower cost airline anyway,” Fernandes said.
He added that economic performance in Southeast Asia would eventually outperform other regions, which could also bolster the industry and AirAsia’s operations.
As AirAsia is banking on the Philippine growth, the carrier will increase and add on some routes in the coming months as the tourism sector continues to rebound.
AirAsia Philippines CEO Ricky Isla said AirAsia intends to increase to seven flights a week its Manila to Singapore route starting December, from the current four times a week.
By November, it will also open its Cebu to Singapore route, and Clark to Singapore by the first quarter of next year.
As of now, top destinations of AirAsia Philippines include Seoul, Kuala Lumpur, Singapore and Bangkok.
Apart from ASEAN, Isla said Osaka would also be in the pipeline by November.
“By December, we will be almost nearing 40 percent, at least of international levels, because we target by early second quarter, we will be already 100 percent with international capacity,” Isla said.
For AirAsia’s overall operation, the carrier aims to put its 210 planes back in operation from the current 110 that it is flying across various destinations. By yearend, Fernandes said 160 planes would be operating AirAsia’s routes.
“We really need to get the planes back in operation because we’re paying for fixed costs, but we don’t have the revenue from those assets,” he said.