South Korea and The Philippines announced (10-Apr-2012) plans to expand the bilateral air services agreement between the two countries amid growing travel demand in the region and following negotiations held over 02/03-Apr-2012. Under the revised agreement, both sides agreed to increase services by 50%. Previously each side was permitted to operate 19,000 seats per week to any point in the other country, with the new agreement increasing this entitlement to 28,500 seats per week. South Korea is one of the 10 “priority countries” the Government wants to have increased connectivity with, the Philippines' Civil Aeronautics Board (CAB) said. About half of the previous entitlements are operated out of Manila, although local airlines already have services to South Korea from secondary points like Cebu, Clark, Caticlan and Kalibo. Local airlines that have flights to South Korea are Philippine Airlines, Cebu Pacific and Zest Air. Airlines from South Korea that fly to the Philippines include Asiana Airlines and Jin Air. The new agreement is part of the Philippines Government's plan to increase tourist arrivals into the nation from three million in 2010 to 10 million by 2016. South Korea is currently the Philippines' largest source of foreign tourists, with CAB estimating "the number of South Koreans coming to the Philippines this year to reach more than a million," marking around a 10% year-on-year increase. [more - original PR]
South Korea and The Philippines expand bilateral air services agreement
You may also be interested in the following articles...
Philippines-China air service growth to lift Philippines' Chinese tourism as Duterte changes horses
First bananas, then people. China's lifting of a trade ban against bananas from the Philippines bodes well for aviation. Relations between China and the Philippines turned negative in 2012. The issue was primarily over China's claims to uninhabited islands – a debate that also caused China-Japan relations to turn sour. China banned Filipino banana imports and issued a travel warning against the Philippines. Travel warnings from China carry more weight than in other markets since state-owned/linked travel agencies essentially stop selling the impacted market. Diplomatic rows have resulted in drastic reductions in outbound passenger flows from China.
Japan has more than recovered but the Philippines' underexposure to China is well evident: the Philippines has received the least number of Chinese tourists in Asia. Laos and Cambodia, far smaller than the Philippines, each received more Chinese tourists than the Philippines.
New Filipino President Rodrigo Duterte is pivoting Manila's allegiance away from the US – to China. His presidency is young and the calculation has its sceptics, but China appears to be warming. Following the lifting of its ban on banana trade, China is expected to use President Duterte's visit to Beijing to lift its travel warning against the Philippines. This will likely stimulate large air service growth between China and the Philippines. Yet for existing markets, there is some concern that the Philippines presents new competition.
Hainan Airlines to Las Vegas: more international flights to follow as Southwest starts partnerships
Hainan Airlines' Beijing-Las Vegas 787 service commencing in Dec-2016 will end Korean Air's tenure as the only Asian airline in Las Vegas. Las Vegas is arguably the largest feasible unserved North American market for Hainan. Delivery of over 30 787-9s in coming years means that Hainan will need to establish new markets. The route tests the booking data that airlines and airports rely on: Las Vegas believes airlines have shied away from serving the city and that this is misguided – because Las Vegas' international visitors are not represented, since they often take multi-city itineraries and thus do not appear as a Las Vegas international passenger. Las Vegas wants to prise its international passengers away from transit hubs.
Hainan's presence will initially be about half of Korean Air's, which was upped days prior to Hainan's announcement. Yet this may be the best outcome for Korean. A Chinese service was inevitable, but Las Vegas had to wait for political sensitivities to cool since Las Vegas flights would not have been timely as China's anti-corruption and austerity campaigns unfolded. Hainan brings enough presence to deter more competition in the short term, yet its narrow focus on the outbound Beijing market leaves Korean Air with many opportunities around Asia. Further international growth for Las Vegas is likely after McCarran airport's largest operator, Southwest Airlines, is ready to partner with other airlines in 2018.