Passenger Capacity Between Manila And China Remains Subdued, CAPA Says

by Edu Lopez
Manila Bulletin
October 24, 2012 Wednesday


Passenger capacity between China and the Philippines has been reduced as a result of China issuing a travel warning to Manila and travel agencies subsequently not selling the Philippines.

The centerfor Asia Pacific Aviation (CAPA) said that the dispute between the two nations over the Scarborough Shoal, and the situation has gone largely unnoticed with each nation's general public, let alone the international community.

CAPA noted that the Philippines like Japan, is starting to meet Chinese to ssek to reconcile the disagreement.

While in the China-Japan situation this warming of relations will see the start of a rebound -JAL believes the market has already seen the worst- the China-Philippines market will see little change until China lifts the travel warning, likely to be done once negotiations are concluded, said CAPA.

That longer time-frame is apparent from the planned capacity levels between China and the Phlippines being down 18% year-over-year in Dec. 2012, CAPA said.

"Although the China-Philippines market is a fraction of the China-Japan market. China-Philippines capacity in Oct. 2012 was down 17% and is scheduled to be down 11% in Nov. 2012."

CAPA believes that that more substantial effect of the China-Philippines dispute compared to the dispute between China and Japan is a reminder that the more prominent expressions of public sentiment and attention do not always correspond to the deeper situation.

Traffic flows remain inhibited by low frequencies, legacy airline pricing and limited city-pair links. As the market grows, the improved social and economic links should progressively help to soften the sort of political differences witnessed recently, CAPA added.