CEBU is getting a share of Capital A’s US$1 billion expansion in the Philippines.
In an interview, Capital A president and chief executive officer Tony Fernandes said his company is expanding its airline business in Cebu through AirAsia Philippines.
“Our main growth will be in Cebu. Our team is now working out on putting plans together to grow flights to and from Cebu. We now have Japan, South Korea, and China. We will do more flights to Bangkok and Bali connecting to Cebu,” he said.
Fernandes is confident of growing its Cebu hub following the partnership inked between Capital A’s subsidiary bigPay and Aboitiz Group’s digital banking firm UnionDigital. The latter’s infrastructure arm Aboitiz InfraCapital is the new operator of the Mactan-Cebu International Airport.
Capital A is a Malaysian-based conglomerate controlled by tycoons Fernandes and Kamarudin Meranun.
Currently, AirAsia Philippines flies seven times daily from Manila to Cebu. It also flies from Cebu to Caticlan and Davao three times weekly. Flights to international destinations such as Narita (Tokyo) and Seoul (Incheon) remain daily, while flights to Taipei continue at four times weekly.
Demand for travel anywhere in the world, including the Philippines, has been strong, according to Fernandes.
“Travel is young people’s no. 1 spend, then fashion and food,” he said. “So, I think this is a great opportunity for the Philippines. This is the perfect time for us.”
Capital A’s US1 billion expansion in the Philippines will involve buying at least 50 new aircraft to grow its network in Cebu, and the rest of the Philippines, creating a maintenance repair and overhaul plant in Cagayan de Oro City, and bringing in the ride-hailing app airasia Ride to the country, including Cebu.
“What we want is to bring down the cost of travel. We did it for the flights… and now we want that the things that add to your travel cost will become affordable as well,” he said.
Need for more low-cost airports
Fernandes also highlighted the importance of improving major hubs such as MCIA and Ninoy Aquino International Airport (Naia) to attract more tourists and help rebuild the tourism industry.
He not only supports the privatization of airport terminals but also called on the government and private sectors to develop more low-cost airports.
“I encourage the private enterprise to not just look at full-service but also at low-cost airports which are cheaper to build and affordable for the public. It’s about building facilities that fit the public,” he said.
“For me, I don’t need Rolls Royce airports. I need airports that are simple. The best return on capital is in low-cost airports,” he added.
“People like to build mausoleums and palaces in airports, but the masses don’t need that. The masses need simple facilities to go from A to B, right? Not everyone needs fancy business class lounges and marble floors and walkalators everywhere,” he stressed.
The Malaysian tycoon, who also met with President Ferdinand Marcos Jr. during the latter’s three-day state visit to Malaysia, also asked Marcos to connect the three terminals of the Ninoy Aquino International Airport.
“I asked the President to connect the terminals because you have to go outside, take a bus and you know, so I said please respond. I think I was the first person to actually mention it to him. So I think he will, you know, look into it. I will follow up with a letter and I’ll hope to see him again,” Fernandes said.
In the second quarter of 2023, AirAsia Malaysia, AirAsia Thailand, AirAsia Indonesia and AirAsia Philippines posted a healthy load factor of 88 percent, having carried 14.2 million passengers, almost double the number year-on-year.
AirAsia Philippines posted robust load factors at 91 percent and carried 1.6 million passengers.