APEC 2015: Local Airlines Lost Millions in Revenue

Following the end of the 2015 Asia Pacific Economic Cooperation summit held recently in Manila, airline industry analysts estimate that both local and foreign carriers lost nearly $2 billion in revenue after more than 1,000 flights were cancelled at Ninoy Aquino International Airport in Manila.

Image Source: Toronto Star

According to a report in the Philippine Star, an airline industry expert stated that the airlines that were hardest hit were budget carriers as they were unable to rebook passengers immediately or transfer them to hotels. However, most of the losses incurred by airlines were covered by insurance.

Philippine Airlines, the nation's flag carrier, lost an estimated $18.7 million according to spokesperson Cielo Villaluna. PAL usually grosses $7.5 million each day in sales revenue operating approximately 260 domestic and international flights daily. As a result of APEC, the airline was forced to cancel 700 flights, representing nearly 2.5 days of operations, added Villaluna.

Cebu Pacific, the nation's largest low-cost carrier, indicated that nearly P400 million in revenue was lost due to the flight cancellations. In total, local airlines in the Philippines cancelled approximately 1,800 domestic and international flights during APEC, which lasted from November 16 to 20.

Airlines were forced to cancel flights due to the temporary runway closures at Ninoy Aquino International Airport, where world leaders were given priority arrivals and departures. It is believed that the cancellations had a ripple effect throughout the Philippine archipelago, where other cities reported a reduced number of tourist arrivals.

AirAsia Philippines, the third-largest carrier in the country, cancelled a total of 84 domestic and international flights during the closure of the runway in Manila. Several foreign carriers also cancelled, rescheduled, or rerouted their flights during the APEC summit. Both Cebu Pacific and Qatar Airways diverted several flights to Clark International Airport in Pampanga.

According to Clark International Airport Corporation, Cebu Pacific diverted its flights from Dubai and Singapore, as well as several domestic flights, while Qatar Airways diverted one of its Boeing 777 flights. Qatar currently operates the only long-haul flights from Clark International Airport, while its remaining flights typically operate from Ninoy Aquino International Airport in Manila.

However, in spite of the flight cancellations and lost revenue, airlines were quick to point out that there are long term benefits to be had by hosting the APEC summit. "We must stress, however, that the long term benefits of APEC outweigh these aforementioned losses," added Villaluna of Philippine Airlines.

References: Philippine Star