AirAsia sees huge potential for tourism in Region X

Dec 6, 2014

by Mike Baños, Editor-at-Large

 

Asia’s leading and largest low-cost carrier expects to play a major role in bringing in more tourists into Northern Mindanao once the Laguindingan Airport is made an international gateway.

 

Air Asia Phils CEO Joy Cañeba

 

“Make Laguindingan an international airport so we can open Cagayan de Oro and the entire Northern Mindanao to more tourist arrivals,” said Atty. Josephine Joy D. Cañeba, Executive Vice President and Chief Executive Officer (CEO) of Air Asia Philippines, during a “meet-and-greet” activity with local media last week in Cagayan de Oro City.

 

Since it was designed 12 years ago, latest Civil Aviation Authority of the Philippines (CAAP) records showLaguindingan airport had already exceeded its design capacity of 1.6 million passengers with an air traffic volume of 1.8 million passengers as of September, 2014.

 

CAAP records show air passenger traffic for July-Dec. 2013 at the new facility plus the Jan.-June, 2013 volume of the Lumbia Airport breached 1.89 million passengers, or over three times the 606,216 recorded at Lumbia in 2006, a mere seven years ago. 

 

 

Despite Laguindingan airport operating only during daytime under Visual Flight Rules (VFR), air passenger traffic at the two facilities still grew by 268,000 in 2013, the largest increase registered during the CAAP’s operations at Lumbia which consistently attained double digit growth in passenger volume every year from 2006-2013.

 

“The reality is we have to move faster and our government officials should recognize this. Aviation industry is very fast paced, it’s so competitive that our neighboring countries are just so way ahead in terms of infrastructure. Like, the population of the Chinese market is so huge, that if they choose some other market to get into and not Philippines then we lose an opportunity, same with the Indians, and the Koreans,” Atty. Cañeba noted. 

 

Huge Tourism Potential

 

With its new infrastructure and programmed improvements in the coming years, the airline executive believes there’s a huge potential for tourism growth in Region X, as shown by Bohol’s experience.

 

PNoy's plane touches down at Laguindingan Airport during the June, 2013 inauguration

 

“The revenue of Bohol province is 40 percent dependent on tourism,” she pointed out. “If they can have 40 percent with that kind of infrastructure, if you open this up, you will have way bigger economic returns.”

 

“In 2-3 yrs time we will probably be offering a lot more routes from Cagayan de Oro,” Atty. Cañeba noted. “We will have Manila, I’m sure by that time, and still doing Cebu. We will have more international destinations such as Cebu and Kalibo. I really want to offer international routes out of Puerto Princessa, and even Tagbilaran, if their airport is ready,” she added.

 

Even without Laguindingan as an international gateway, Atty. Cañeba said AirAsia can already offer “virtual” international services with its “FLY-THRU” service which allows passengers to make one-time bookings, thru check-ins (including baggage check-Thru) with no need from transit visas when traveling from AirAsia Philippine hubs to international destinations now being serviced by the airline.

 

“From Cebu I’m proud to say we can offer the Kuala Lumpur “FLY-THRU” service. This allows you to go to Cagayan-Cebu, Cebu to KL and from KL you have access to over 100 destinations of Air Asia routes. You can choose half of China, Australia, Indonesia, Thailand, Japan, India and the entire ASEAN, North Asia is within your reach at reasonable price.”

 

Cebu Pacific Air also offers a similar fly through services with its strategic alliance with Singapore-based Tigerair. Both parties will collaborate commercially and operationally on international and domestic air routes to and from the Philippines, creating the biggest network of flights to the region.

 

The alliance will allow both carriers to harness synergies and efficiencies to enhance their network coverage, flight frequencies and customer service, and jointly market their routes using codeshare and interline arrangements. Subject to regulatory approval, the alliance will jointly operate common routes to and from Singapore and the Philippines.

 

Expansion Needed

 

However, the CAAP says much remains to be done before Laguindingan can handle international flights.

 

“We have to expand our passenger and cargo terminals whose design capacities were already exceeded at its opening June last year,” said Jose P. Bodiongan, Area IX manager for the Civil Aviation Authority of the Philippines (CAAP) who manages the Laguindingan airport.

 

DOT-X RD Butch Chan, CAAP Area IX Manager Jojo Bodiongan and CDO CIty Tourism Council Chair Dottie Pabayo during a recent CTC General Assembly at City Hall

 

 

 “Besides prioritizing the expansion of the passenger and cargo terminals and related facilities, we would still have to provide for additional space for Customs, Immigration, Quarantine and Security (CIQS) facilities if we wish to host international flights,” Mr. Bodiongan added.

 

The original Terms of Reference for the Operations & Maintenance Public-Private Partnership (O&M PPP) Development Plan of the airport covered its operations and maintenance. But it was later recommended for upgrading by the Regional Development Council for Region X (RDC-X) to include additional facilities and capacity of the airport to be carried out in three (3) phases.

 

Phase 1 specifies the expansion of the passenger terminal building to 14,490 sq.m. from the present 7,184 sq.m., expansion of the cargo terminal building to 8,652 sq.m. from the present 350 sq.m. and expansion of the parking lot from 10,300 to 24,600 sq.m. The Private-Public-Partnership plan has been approved by the NEDA Board’s approval and will next be bidded out to the private sector.

 

DOT eyes Busan-SG-CAG Route

 

Catalino L. Chan III, Department of Tourism (DOT) Region X Director, said the DOT is eyeing a Busan, South Korea-Singapore-Cagayan de Oro (via Laguindingan) route since statistics show Cagayan de Oro has one of the highest number of resident Koreans in the Philippines.

 

CEB VP for Corp Affairs Atty Jorenz Tañada meets some CDO media

 

 

“However, we are conducting further studies to see if the projected passenger volume from Busan would be sufficient to justify a direct link to Cagayan de Oro without dropping by Singapore which has one of the highest number of resident Filipinos that can further bolster passenger traffic along this route,” he added.

 

Mr. Chan said the projected passenger traffic along the proposed route should also be able to sustain at least twice weekly flights to allow Koreans a return flight within the week.

 

Department of Tourism (DOT) show the Philippines hosted 3,596,523 visitors for the first nine months of 2014, 2.49% higher than last year. Travelers from East Asian region continued to be the biggest source of arrivals with 1,749,262 visitors (48.64%).  

 

Korea remains the country’s leading visitor market for the period, followed by the United States and Japan, while Japan registering the highest growth. The DOT has set a “fighting target” of 10 million foreign tourist arrivals by 2016.

 

A total of Php 157.73 billion was generated from inbound tourists for the first nine months of the year.  The top five visitor markets in terms of expenditure are Korea, (Php45.08 billion), the United States (Php 30.86 billion), Australia (Php 9.99 billion), Japan (Php 8.27 billion), and China (Php 7.08 billion).  

 

“Next year is big for the Philippines because they’re launching Visit Philippines which makes me really happy and proud as a Filipino because that is really opening up the Philippines to the world. I think of any country in Asia we have a lot to offer, but there’s still a lot more that we need to do,” Atty. Cañeba said.

 

AirAsia Philippines is an affiliate of AirAsia, the leading and largest low-cost carrier in Asia. It proudly brands itself as a truly ASEAN (Association of Southeast Asian Nations) airline with established operations in Malaysia, Indonesia, Thailand, the Philippines and India, servicing a network of 88 destinations across all ASEAN countries as well as China, India and Australia. It was named the World’s Best Low Cost Airline in the annual World Airline Survey by Skytrax for the last six consecutive years (2009-2014).

 

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