With passenger growth of 13% through the first 10 months of 2015, Cebu (Philippines) has emerged as one of the fastest-growing airports in Southeast Asia. The relaunch of several domestic routes by the Philippine Airlines Group, Cebu Pacific group and foreign carriers, Mactan-Cebu International Airport is poised for more rapid growth in 2016 as PAL continues to pursue expansion at its second hub, with more new domestic routes and the launch of services to Los Angeles, Cebu’s first long haul route. The Cebu Pacific Group also plans to expand its Cebu base in 2016, with at least two more turboprops.
Mactan-Cebu, the Philippines’ second largest airport, is well positioned for long-term growth as the airport’s new private owners have begun construction of a new terminal, which will increase annual capacity to 12.5 million annual passengers. The new terminal will enable Cebu to build as a hub for transit traffic, and to benefit further from infrastructure constraints at Manila, which are prompting Philippine carriers to base additional aircraft at secondary cities.
Foreign and Philippine carriers alike face constraints on expanding in Manila. Cebu is a growing market in its own right – with strength in both the inbound and outbound sectors, but ultimately Cebu’s growth is enabled by the constraints at Manila and by its own expansion. Cebu is also currently operating above its designed capacity of 4.5 million annual passengers, but unlike Manila it has space, and a commitment to expand.
Mactan-Cebu was taken over in late 2014 by a consortium consisting of India’s GMR and Philippine company Megawide Construction. GMR-Megawide has a 25-year concession to manage and expand Mactan-Cebu Airport.
The new joint venture company began a three-year new terminal construction project in Jun-2015. The new terminal is designed to boost the airport’s capacity to 12.5 million passengers when it opens in 2018.
Given the steady 6% to 7% per annum economic growth in the Philippines, options besides Manila are needed. As the second largest city Cebu offers a sizeable local market. With its position in the middle of the country Cebu also has the geography to emerge as a large hub linking secondary cities throughout the Philippines, as well as international destinations within the region and afar.