The Philippines Civil Aeronautics Board executive director Carmelo Arcilla expects the country's civil aviation industry to remain under Category II status for some time (Business Insight, 01-Mar-2011). The problem, according to Mr Arcilla, is the lack of safety in any of the 10 international airports in the country, particularly Ninoy Aquino International Airport and its three terminals.
Philippines to remain Category II status for some time
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Southeast Asia’s low cost airline fleet grew by only 7% in 2016, representing the slowest growth in several years. The region’s two main groups, AirAsia and Lion, both slowed their growth significantly, with AirAsia slightly reducing its Southeast Asian fleet in 2016.
Southeast Asian LCCs ended 2016 with a fleet of 623 aircraft – up a modest 41 aircraft compared to the beginning of the year. The same group of 21 airlines added 67 aircraft in 2015 and 61 aircraft in 2014.
Several airlines responded to overcapacity, which peaked in 2014 following a period of overzealous capacity expansion, by deferring aircraft deliveries. Overcapacity continues to persist in several Southeast Asian markets, but some LCCs are reaccelerating expansion in 2017. Given the sector’s huge order book it is likely 2016 will represent the low point in Southeast Asian LCC fleet growth.
Turbulence will hurt Southeast Asia’s airlines in 2017 as overcapacity bites
Southeast Asia is a region with enormous growth potential but a relatively cloudy outlook for airlines given the intense competition and overcapacity concerns. Demand is on the rise, boosted by a growing middle class, rising discretionary incomes and relatively strong economies.