ABOITIZ InfraCapital said it may begin to feel the impact of escalating Middle East tensions on its airport business from early June, as sustained high fuel prices could disrupt airline operations and dampen passenger growth.
“We may start to see some impact from early June onward if the conflict persists and fuel prices remain elevated,” said Cosette Canilao, the company’s president and chief executive officer (CEO), citing risks such as higher airfares, route adjustments, reduced flight frequencies, and the potential suspension of less profitable routes.
The company is closely monitoring developments related to the conflict involving Iran, which has contributed to volatility in global oil prices and raised concerns across the aviation sector.
Aboitiz InfraCapital, the infrastructure development arm of the Aboitiz Group, is the private operator of the Mactan-Cebu International Airport (MCIA) through its subsidiary Aboitiz InfraCapital Cebu Airport Corp. (ACAC).
Strong airport performance
Despite these risks, Aboitiz InfraCapital reported strong momentum in its airport operations, particularly at MCIA, which posted its highest monthly passenger traffic in January. First-quarter volumes also exceeded expectations, reflecting sustained travel demand.
Canilao said some airlines have already begun adjusting selected routes and frequencies in response to rising costs, although Emirates has resumed its daily Dubai–Cebu service, supporting international connectivity.
To cushion potential disruptions, Canilao said the company has developed multiple passenger traffic scenarios and is working closely with airline partners to align on network plans and provide support where needed.
Canilao said the impact on second-quarter revenues is expected to be limited, as most tickets have already been purchased.
“We remain cautiously optimistic,” she said, expressing hope that tensions will ease in the second half and sustain travel demand.
Dialogue with stakeholders
ACAC recently convened hotel executives and industry groups to assess the possible impact of the ongoing Middle East crisis on passenger traffic and tourism flows.
The dialogue, attended by major hotel operators and industry associations in Cebu, focused on mitigating risks from surging jet fuel prices, which could drive up airfares and dampen travel demand.
“The aviation and tourism sectors are deeply intertwined. When global headwinds like surging jet fuel costs put pressure on our airline partners, our industry inevitably feels the impact,” said Athanasios Titonis, CEO of Aboitiz InfraCapital Operating Airports.
He added that closer coordination with hotel partners and scenario planning would help the industry respond more effectively to shifting market conditions, noting that proactive collaboration has been key across the group’s airport portfolio.
Despite near-term risks, ACAC is also pursuing growth opportunities, including expanding direct connectivity to emerging international markets to diversify demand sources.
Beyond airports, Canilao said the company’s water and telecom tower businesses are expected to provide steady income, with demand seen as relatively inelastic. The company is also advancing projects in its pipeline and expects to boost its investment capacity following the entry of Jera Co., Inc. as a strategic partner.
Aboitiz InfraCapital, Inc. recorded an income contribution of P680 million, a six percent increase from 2024, supported by lot sales at Tari Estate in Tarlac, increased passenger traffic at MCIA, the addition of Laguindingan and Bohol-Panglao airports to its expanding airport portfolio, and the contribution of its Apo Agua Infrastructura in Davao. / KOC