Japan has overtaken Hong Kong's long-standing status as the most-travelled destination on Cebu Pacific, the Philippines' largest airline, even though it flew a record number of Filipino visitors to the city last year, the carrier's president has told the Post.
In an interview, the budget airline's president and chief commercial officer Alexander Lao forecast robust passenger growth for the current year after the firm rolled out two new routes to Hong Kong at the end of last year - Davao and Iloilo - in an expansion of its international reach to boost traffic between the city and the Philippines.
He said he expected to generate double-digit passenger growth between Hong Kong and the Philippines this year as the carrier banked on its expanded destinations with affordable fares to woo visitors.
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In the first quarter, the airline carried more than 312,000 passengers between the Philippines and Hong Kong, a 9 per cent year-on-year increase. The firm had 1.13 million passengers between the two places last year, a jump of 34 per cent from over 840,000 in 2023.
"We are the airline that has the most connections - five places - between the Philippines and Hong Kong ... Traditionally, Hong Kong has been our largest market, but it was overtaken by Japan last year as there was also a record number of Filipino nationals visiting the country," he said.
"There's room to grow even faster. If you take a look at our overall growth in passenger traffic, which is 20 per cent plus, we normally see it in the double digits."
Lao added that the company had also returned to full pre-pandemic capacity.
"In the fourth quarter last year, we launched both Davao and Iloilo to Hong Kong," he said.
"So that's driving more traffic ... And so if it is growing in line with the other [locations], then in theory, we should be seeing more [traffic]."
As the local airline in the country offering direct flights to the city from five key Philippine cities - Manila, Clark, Cebu, Davao and Iloilo - the company said much of the passenger growth came from routes outside Metro Manila, signifying rising demand for regional connectivity.
The low-cost carrier currently operates flights to 37 domestic and 26 international destinations across Asia, Australia and the Middle East.
Lao was upbeat about the airline's traffic to Hong Kong as a record-breaking number of Filipino visitors came to the city last year, with 1.19 million arrivals, a record attributed to the Philippines' strong economic growth, proximity and the appeal of the city's theme parks.
Filipinos became the third-largest group of visitors last year, after those from mainland China and Taiwan. The Philippines ranked sixth in 2018, a record year for Hong Kong tourism.
In 2024, Cebu Pacific carried 24.5 million passengers, an 18 per cent increase from 2023, with a seat load factor of 84.4 per cent. However, its net income fell 68.3 per cent to 2.64 billion Philippine pesos (US$46.1 million) from 8.34 billion pesos in 2023, as rising costs outpaced revenue growth.
The load factor is a measure of how well an airline is filling available seats.
Lao attributed the drop to the significant investments the company made into fleet and operation expansion. In October 2024, Cebu Pacific finalised a US$24 billion aircraft order with Airbus for up to 152 aircraft, with the airline receiving 17 plane deliveries last year.
He also said the Philippines faced challenges in attracting more tourists from around the world, saying the country needed to work harder to dispel some misconceptions in areas such as transport and prices.
"I think there are a lot of misconceptions about the Philippines in terms of connectivity. For example, sometimes a lot of people think, oh, I have to go through Manila and the transport is not convenient," he said.
"That's one of the reasons why we make investments in these direct services, to actually make it more convenient for travellers to explore the Philippines.
"The other misconception is that the Philippines is thought to be a relatively expensive country. But it's not. Actually, it may be one of the more affordable destinations."
As to Hongkongers' concern for travel safety, Lao emphasised that the situation in the Philippines had "become a lot better". Seven Hong Kong tourists and their tour guide were killed in Manila in 2010 when a disgruntled former police officer opened fire on a tourist bus.
The Cebu Pacific boss also pointed to the fact that Manila was undergoing significant airport upgrades. The changes include a new international airport in Bulacan and expansion plans for Ninoy Aquino International Airport, which is being privatised as it constructs a new terminal.
"There is a perception that Manila used to be the world's worst airport. But that's not so now ... Everything now is entering into a new chapter. It's no longer government-run so it's more efficient and improved now," he said.
Lao said the budget airline would continue to roll out affordable fares to attract customers, including the occasional HK$1 promotional airfare, which gave it an edge over its competitors in Hong Kong and at home.
"We have a lower cost base in the Philippines, and that will always be an advantage for us setting our low fares," he said. "We offer the best among the lowest."
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This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.
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