MANILA, Philippines — The Philippine aviation market is expected to continue growing in the next five years, but the government will have to address infrastructure deficiencies and avoid imposition of additional taxes and charges on carriers and passengers, the International Air Transport Association (IATA) said.
IATA director general and chief executive officer Alexandre de Juniac said during the Philippine Aviation Day forum, the Philippine aviation industry has tremendous opportunity to expand in the next five years.
“Aviation is vital to the Philippines. It supports 1.2 million jobs and $9.2 billion in GDP (gross domestic product). The domestic network binds the country across 7,000 islands. International links keep families and businesses connected, and bring in tourists. But the social and economic benefits of air transport are at risk if the key issues of airport infrastructure, excessive regulation and taxation are not addressed,” he said.
De Juniac said the government should prioritize the implementation of proposals to enhance the runway and terminal capacities of the NAIA.
While developing the Clark International Airport should be among the top priorities, de Juniac said it cannot serve as the primary airport for Manila.
“Clark is a good secondary airport for Manila, but it’s too far to be the key hub for the city,” he said noting the alternative airport should be around 45 to 50-kilometers (km) away from the city.
The Clark international airport is more than 100-km away from Manila.
De Juniac said even the construction of the Manila-Clark Railway, which would have a station in the Clark international airport, would not be enough to change IATA’s view on Clark being positioned as a secondary airport for Manila.
De Juniac said the aviation industry in the Philippines is expected to support 3.4 million jobs and contribute $23 billion of GDP by 2025, more than double the levels seen in 2014, if the infrastructure plans are undertaken.
Aside from addressing the lack of infrastructure, IATA said higher taxation on carriers and passengers would not support the growth of the aviation industry.
De Juniac said “the more you put tax on passengers or airlines, the less traffic you will have and less prosperity you will bring to this country.”
He said the Gulf states which are successful in terms of aviation, have the lowest landing fees and airport charges in the world.
“Is it totally a coincidence? I don’t think so...It’s a strategic policy,” he said.
Jaime Bautista, Philippine Airlines president and outgoing chairman of the Air Carriers Association of the Philippines, said the industry also has a bullish outlook over the next five years.
While air traffic in the country is expected to grow, he said there is a need for more infrastructure to sustain and support the growth of the airlines.
“Your Philippine carriers are expanding. We are taking delivery of more airplanes. We plan to fly to more destinations, but we can only do this if we are supported by government in terms of reliable infrastructure,” he said.