P800-M BUSINESS: Iloilo Airport deserves more flights amid growth

By Francis Allan L. Angelo

Iloilo deserves more.

This is the gist of the recent analysis of Iloilo-based think tank Institute of Contemporary Economics (ICE) that backed the urgent need for airlines to increase their flight frequencies to and from Iloilo International Airport in the town of Cabatuan to accommodate the robust growth in passenger volumes.

According to the ICE report, the airport has witnessed a significant rise in passenger traffic, recovering impressively from the pandemic downturn.

From a low of 340,000 passengers in 2021, the airport saw numbers soar to 2.27 million in 2023. The report emphasized that this surge necessitates a corresponding increase in airline frequencies to sustain and further bolster this growth trajectory.

The growth is a stark contrast to the sharp declines experienced during the COVID-19 pandemic, with volumes plummeting by 75.8% in 2020 and 50.2% in 2021.

Despite these setbacks, the resilience of the air travel sector in Iloilo is evident as it rebounds robustly.

Airlines, however, have not matched this growth in passenger demand with an equivalent increase in flight frequencies.

The ICE report noted that the number of flights in 2023 was 17,450, significantly lower than the pre-pandemic peak of 20,580 in 2019.

This discrepancy has led to higher passenger loads per aircraft, reaching an average of 130 passengers per flight in 2023.

ICE noted that the current average is reaching load factors close to 75% for typical Airbus A321-200 aircraft.

Its projections suggest that without a boost in flight numbers, this could rise to 142 passengers per aircraft, nearing or surpassing the load-factor break-even points for most commercial airliners.

Airport officials and industry experts highlighted the importance of leveraging these figures to persuade airlines to add more flights.

The data clearly shows a thriving market with substantial untapped potential. The goal is to demonstrate to airlines that increasing flight frequencies will not only meet current demand but also foster further economic growth for the region.

Indeed, the financial implications are significant. With an average ticket price of PHP10,000, Iloilo represents an PHP800 million market for international flights alone.

This economic potential, combined with the increasing domestic and international travel demand, presents a compelling case for airlines to invest in additional flight routes.

Without an increase in flight frequencies, the airport risks exceeding its optimal load factor, which could affect passenger satisfaction and operational efficiency.

The ICE study recommended a strategic collaboration between the airport management and airlines to align flight schedules with the growing passenger demand.

“The data speaks for itself. Airlines that capitalize on this growth by adding more flights stand to gain significantly, while also supporting the regional economy and connectivity.”

Earlier, airline Cebu Pacific revealed that it will relaunch direct flights from Iloilo to Hong Kong and Singapore, routes that were suspended in 2020 due to the COVID-19 pandemic.

The Iloilo-Hong Kong flights will begin on October 27, 2024, while the date for the Iloilo-Singapore flights is yet to be announced.

The Civil Aviation Authority of the Philippines Area VI (CAAP-6) previously stated that the Iloilo airport is ready to accommodate international flights but is awaiting proposals from airline companies.

CAAP-6 Manager Engr. Eusebio Monserate Jr. noted that they had implemented a slotting mechanism when the Iloilo airport still accommodated international flights.

Slotting allows CAAP, the airport operator, to schedule specific times for airlines to land or take off.

“The operation of the airport is 24 hours to avoid congestion. We are scheduling flights at times when there are no domestic arrivals,” Monserate explained.

Currently, the Iloilo airport serves seven domestic routes with a total of 20 flights daily.

The airport is set for upgrades this year through a P190 million budget from the national government’s 2024 Aviation Transport Infrastructure Program.

Additionally, there is ongoing negotiation regarding an unsolicited proposal from Prime Asset Ventures Incorporated, a subsidiary of the Villar Group of Companies, to rehabilitate and expand the airport’s facilities.

Based on the PPP Center website, the proposed project is valued at P14.7 billion and will be under an operate-add-transfer contract agreement.

Key components of the project include expanding the passenger terminal building to meet international standards, constructing an adjacent apron, renovating the existing terminal, installing required passenger services equipment, and maintaining the terminal buildings and facilities throughout the concession period. (With a report from Rjay Zuriaga Castor)