Elevating travel, driving growth

First published in InfraTalks, Aboitiz InfraCapital's monthly column in The Manila Times.

AIRPORTS are more than mere transit hubs; they are vital infrastructure bridging places, economies and cultures. They connect people, stimulate trade and serve as gateways to new opportunities. In the Philippines, airports play a crucial role in driving economic growth, yet their potential remains underutilized.

Growing up in Cebu, I witnessed the transformation of the Mactan-Cebu International Airport (MCIA) firsthand. This evolution has been nothing short of inspiring. For our family and many others, the MCIA symbolizes progress, innovation and Cebuano pride. As an organization with Cebuano roots, Aboitiz InfraCapital (AIC) shares this deep connection to this incredible gateway. The MCIA's journey is a testament to what can be achieved when vision meets collaboration.

Globally, the aviation industry is an economic powerhouse, and in the Philippines, aviation significantly contributes to gross domestic product (GDP), generates employment and fuels the tourism industry.
As of November 2024, the MCIA welcomed 7.6 million domestic passengers while international passengers totaled 2.5 million (or 33 percent of total traffic), up 14 percent year-on-year. The MCIA also serves as a key growth driver for Central Visayas. Last year, the region's economy grew by 7.3 percent — the fastest among the country's regions.

Ripple effects are also felt across allied sectors like logistics, hospitality and retail. A modern, efficient airport can attract international tourists, increase trade opportunities and elevate local economies. For instance, a recent PwC study entitled "Airport Infrastructure in Asia" highlights the transformative impact of air transport infrastructure on economic competitiveness in the region.

"In recent decades, Asia has emerged as the leading region in aviation traffic, currently accounting for 30 percent of the world's revenue passenger kilometers, up from 24 percent in 2004. As the world's fastest-growing region, Asia should see its growth remain resilient at over 6 percent per annum over the next two decades," the study said, with the same study noting that the more air trips per capita of a country are directly linked to its GDP per capita.

Regional peers like Singapore and Hong Kong have set benchmarks for how modernized airports can boost tourism and trade. In contrast, the Philippines faces challenges such as visa restrictions, high hotel and accommodation costs, and inadequate infrastructure — issues that limit competitiveness.

Modernizing airports in the Philippines is no small task, and public-private partnerships (PPPs) have proven effective. Government-managed airports often face constrained resources, impacting optimal efficiency. By engaging private operators, we unlock access to investments, expertise and technology needed to transform our airports into world-class facilities.

The success of the MCIA — the country's first airport PPP — is a shining example. Through privatization, it has seen remarkable improvements in passenger satisfaction, enhanced facilities and global recognition, including a Level 2 Airport Customer Experience Accreditation and Level 1 Accessibility Accreditation from the Airports Council International, as well as a 4-star Skytrax rating for the MCIA Terminal 2.

Just yesterday, AIC signed the concession agreement with the Department of Transportation and the Civil Aviation Authority of the Philippines for the turnover of the operations, upgrade and maintenance of the Bohol-Panglao International Airport. Together with Laguindingan International Airport, AIC will leverage its expertise and replicate the MCIA's success to improve and modernize these gateways.

The vision for Philippine airports extends beyond modernization; it's about creating economic enablers. Imagine this: airports as gateways and ecosystems that stimulate local economies, generate employment and foster cultural exchange.

Upcoming projects like the Iloilo, Bacolod-Silay and Puerto Princesa airports are exciting as they promise to spur socioeconomic progress. AIC Airports will soon serve millions of passengers annually in three airports, contributing significant investments to national development — an unparalleled feat for a local airport operator.

Collaboration between the public and private sectors remains critical to achieving this vision. Sustainable growth requires bold investments in infrastructure and a commitment to innovation. By future-proofing our local aviation sector, we can ensure its readiness to meet rising demand while maintaining global competitiveness.

Cebu's journey mirrors the country's broader aspirations. The MCIA's transformation is an inspiring example of how vision and effective partnerships can yield extraordinary results. It also underscores the potential of airports to become symbols of progress and pride for local communities.

But the journey doesn't end with Cebu. The Philippines must seize this momentum to modernize other key airports and prioritize aviation as a national imperative. As mentioned, investments in airport infrastructure will enhance connectivity and unlock economic opportunities for all Filipinos.

The time to act is now. Increasing air travel demand and pressing infrastructure modernization requirements are opportunities we must leverage. By prioritizing airport development, we can create transformative infrastructure that drives economic growth, fosters cultural exchange, and connects communities like never before.

Join us as we build gateways that reflect the aspirations of a nation ready to take flight, proving that with vision and collaboration, the sky is simply the limit.