1st October 2024 – (Manila) Philippine Airlines Inc. is scaling back its operations to China, citing a persistent slump in demand coupled with escalating geopolitical frictions between Beijing and Manila, as confirmed by the airline’s CEO Stanley Ng in a statement to Bloomberg News. This move mirrors similar actions by other regional carriers and marks a continued downturn in travel between the two countries.
The Manila-based flag carrier plans to reduce the frequency of flights to key Chinese cities such as Beijing and Guangzhou over the coming months, according to scheduling data from AeroRoutes. This adjustment follows a significant drop in flight activity that hasn’t rebounded to pre-pandemic levels, reflecting broader challenges within the aviation sector.
This strategic pullback occurs amidst a backdrop of deteriorating diplomatic relations, exacerbated by Philippine President Ferdinand Marcos Jr.’s recent prohibition of online casinos, which primarily catered to Chinese nationals. This sector had flourished under his predecessor, Rodrigo Duterte, who had sought closer ties with China, resulting in a surge of Chinese presence in Manila, which boosted local economies through increased property demand and consumption.
However, since Duterte has left office, disputes over territories in the South China Sea have soured relations, with Beijing excluding the Philippines from a list of countries benefiting from visa waivers and simplified travel arrangements this year. The fallout from these tensions is evident in the tourism sector, with Chinese visitors, who once were the second-largest group of tourists to the Philippines, now reduced to a mere fraction of their former numbers.
Aviation analyst Brendan Sobie notes, “Chinese citizens have many attractive visa-free options in Southeast Asia, and currently, the Philippines does not rank high on their list of destinations.” This sentiment is reflected in the reduced flight schedules, with Philippine Airlines operating only 20 flights per week to China, a steep decline from the almost daily services offered pre-pandemic.
The broader implications of these reduced operations are significant, as other airlines such as Philippines AirAsia and China Southern have also cut back on their routes to and from the Philippines. This reduction in air traffic comes amid a challenging environment for foreign carriers operating in China, where local airlines have ramped up competition with more affordable fares and increased flight frequencies.
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