AirAsia PH banking on H2 rebound
Budget carrier AirAsia Philippines expects business conditions to improve only in the second half of 2026, as the Middle East crisis continues to weigh on the aviation industry through elevated fuel prices and weaker consumer spending.
In an interview with reporters on Wednesday, AirAsia Philippines president and general manager Anna Victoria Lu said the conflict has posed a “triple threat” to the airline’s growth outlook this year.
“We were really poised for growth in 2026. Of course, this war has not really helped,” said Lu, who took the helm of the airline group’s local unit in mid-April. “But we remain committed to growth in the Philippines.”
“We’re still confident we’ll be able to rebound in the latter half of the year,” she added. “But again, it depends on how long, how prolonged this war will be.”
Lu cited three major pressures affecting the airline: soaring jet fuel prices, the weakening peso—which recently slipped past P61 to the US dollar—and softer revenues amid broader uncertainty in the travel market.
Jet fuel prices have nearly tripled from prewar levels, significantly raising operating costs for carriers.
Apart from the fuel crisis, AirAsia Philippines also faced additional pressure earlier this year from its dispute with the Civil Aviation Authority of the Philippines (Caap) over unpaid obligations amounting to P833.66 million as of end-2025.
Asked whether the issue had been resolved, Lu said, “We’re in discussions with Caap, but we prefer to keep it between the two of us … Rest assured, we’re compliant with our obligations.”
With mounting pressures on the industry, Lu said AirAsia Philippines is now reassessing its passenger traffic targets for 2026. It previously aimed to carry about 7 million passengers annually.
“We’ll need to adjust because when we made those targets, we were not accounting for the war,” Lu said. “I think all the airlines will have to adjust.”
In 2025, the airline flew 4.6 million domestic passengers and 1.03 million international passengers.
Without disclosing full figures, the airline said passenger traffic still grew 14 percent in the first quarter.
Other Philippine carriers also reported higher passenger volumes during the period, with Cebu Pacific growing traffic by 8.4 percent to 7.54 million and Philippine Airlines increasing passenger traffic by 6.1 percent to 4.3 million.
Still, both Cebu Pacific and PAL have flagged caution for the second quarter as fuel market volatility persists.
Amid the challenging environment, Lu said any form of government relief for airlines and tourism-related businesses would help support travel demand.
