A travel association projects that Asia is set to push the International Visitor Arrivals (IVAs) from 619 million in 2024 to 762 million by 2026, marking a strong recovery at 112% of pre-pandemic levels. The Pacific Asia Travel Association says that Asia alone is expected to welcome 564 million visitors, with the Americas and the Pacific following at 167.7 million and 30.4 million, respectively.
Such impressive rebound accentuates Asia’s strength and its growing appeal as a premier global travel destination. As of July 2024, there are 575 airport projects worldwide — either new builds or upgrades — valued at a staggering US$488 billion. Of this, US$217 billion is being funneled into 170 Asia-Pacific projects aimed at enhancing existing airports.
When it comes to new airport developments, Asia-Pacific takes the lead with 60% of global projects, leaving the rest of the world to account for just 40%.
US-based fund manager Eric Jurado of the International Investor told Vantage Point that this highlights the region’s critical role in shaping the future of aviation infrastructure, citing the Business Information Industry Association report of a surge in airport construction across Southeast Asia, with Vietnam and the Philippines at the forefront in new airport projects.
Aside from Vietnam and the Philippines, other Southeast Asian nations — namely, Cambodia, Indonesia, Malaysia, Singapore, and Thailand — are also focused on either constructing new airports or expanding current ones. This wave of investment is expected to greatly boost the region’s passenger and cargo capacity, a vital development as air travel in Southeast Asia is projected to soar to 653 million passengers by 2030, nearly double the 2023 figures.
Jurado said: “In sum, the Asia-Pacific region, particularly Southeast Asia, is rapidly emerging as a global powerhouse in both tourism and aviation infrastructure. With robust investments driving the construction and expansion of airports, led by countries like Vietnam and the Philippines, and a projected surge in international visitor arrivals, the region is primed for significant growth.”
By 2026, Asia will not only lead the recovery in global tourism, welcoming the majority of visitors, but will also dominate in airport projects, holding 60% of new developments worldwide. This aggressive infrastructure expansion is essential, as air passenger numbers in Southeast Asia are expected to nearly double by 2030, highlighting the region’s strategic importance in shaping the future of global travel and connectivity.
The Philippines, through the Department of Transportation (DOTr), has programmed the following airport projects:
- Modernization, Expansion of 22 Airports Funded in the 2024 Budget
- 2nd Sangley Point International Airport (Estimated Year of Completion: 2025)
- New Manila International Airport (Bulacan International Airport) (Estimated Year of Completion: 2027)
- NAIA Upgrade (Estimated Year of Completion: 2028-29)
While the government’s decision to privatize the NAIA is a monumental step toward enhancing the Philippines’ transport infrastructure and positioning it to take advantage of projected industry growth, it is crucial to tackle the current challenges in air cargo facilities. This is to guarantee appropriate capacity for cargo operations and indispensable in giving the much-needed support to the 37 registered commercial airlines and six cargo freighters that currently utilize NAIA.
Current air cargo landscape
At present, there are seven Customs Bonded Warehouses (CBWs) located at NAIA. While four of these CBWs — PAL, DHL, UPS, and Royal Cargo – exclusively serve their own cargo, the other three — Philippine Skylanders Inc. (PSI), Cargohaus, Inc. (CHI), and People’s Air Cargo & Warehousing Co., Inc. (Pair Cargo) — cater to multiple carriers. However, while PSI and Pair Cargo have direct ramp access, the CHI facility does not have ramp access, even if it is located at the NAIA complex.
Why is ramp access important? Having ramp access and a strategic location within the airport enables Pair Cargo to capture over 70% of the total import/export volume at the Bureau of Customs’ NAIA Port.
Due to the growing volume of handled cargo, PSI and Pair Cargo are experiencing problems of congestion, mishandling, and delays in release, which means increased costs for consignees and brokers. These stakeholders have expressed concerns and are seeking additional warehousing space with ramp access to alleviate these challenges.
Unless these issues of over-capacity and delays are addressed, airlines and customers may seek alternative locations or airports. The likelihood that this would divert business away from NAIA makes it imperative for appropriate and timely solutions to be implemented. For instance, why not allow CHI’s CBW to have direct ramp access to prevent this loss of business?
It is crucial to have an alternative CBW with direct ramp access, what with these current over-capacity and operational inefficiencies. This way, the facility will alleviate bottlenecks, reduce waiting times, and improve the flow of goods through the airport. Moreover, this would not only increase competition among service providers, but also enhance overall efficiency, which would directly benefit the supply chain and reduce the logistical challenges the country faces. No doubt, competition among providers can lead to innovations, investments in advanced technologies, and more efficient processes. The result will be advantageous to all stakeholders because the overall quality of services will be elevated, while logistics costs at the country’s main gateway will be reduced.
CHI intends to extend its existing CBW facility to include a ramp access to NAIA. The Manila International Airport Authority (MIAA) Board approved such access in December 2023. However, the ramp access has faced legal hurdles which have delayed its implementation. Meanwhile, the ongoing congestion and delays in cargo operations continue to burden the airport’s handling and storage capabilities.
Closure of ramps
In 2022, by virtue of a court order, two active gates which provided easy access of air cargo to the ramps were shut down. The gates were previously used by Miascor, owned by businessman Ricky Delgado’s Citadel Holdings Inc. Miascor’s contract with the MIAA, on the other hand, was ordered terminated by then president Rodrigo Duterte in 2018 following a luggage theft incident at the Clark International Airport in Pampanga.
The gates afforded efficient cargo movement at the airport. Now, with only one gate in service, one cargo player, Philippine Airport Ground Support Solutions, Inc. (PAGSS), a wholly-owned subsidiary of Pair Cargo and owned by Jeffrey Cheng, has monopolized air cargo business at the country’s airports. From a single airline client at the start of its ground handling operations, PAGSS currently operates at eight international airports throughout the Philippines and is the designated ground handler of over 30 international airlines.
This has unfortunately resulted in inefficient flow of cargo which has made travel experience at the Manila airport intolerable. To address the problem, the MIAA in December greenlit the opening of a new gate. But then again, the courts intervened. The Parañaque Regional Trial Court acting on the June 3, 2024 complaint, issued a temporary restraining order on June 19 and followed it up with a writ of preliminary injunction on July 29.
Filing a bond of P2 million, a certain Marlon J. Rivera, representing the Kapisanan ng mga Nagtitiis na Mananakay, and Jonathan L. Saguil, claimed the project is an “illegal alienation…of public property,” although no sale was involved, but only the opening of an additional gate with ramp access for the easy transport of cargoes from warehouse to aircraft.
We will not dwell on the legalities of the issue since it is now being heard by the courts. But it is interesting to see how SMC honcho Ramon S. Ang (RSA) navigates this legal setback. San Miguel has inherited this problem caused by powerful personalities. Have these “powerful personalities” finally met their match in RSA?
The MIAA said that its December decision was “aimed at the public purpose of upgrading and providing safe, efficient, and reliable airport facilities for international and domestic travel.” The new gate with ramp access, it added, would facilitate the “movement of cargo between warehouses and aircraft… (and) to meet deadlines and mitigate delays especially with respect to time-sensitive goods such as perishable items, medical supplies and urgent shipments.”
In effect, it said, the new gate with ramp access would “benefit not only cargo operators [and] the airport management, but ultimately the general flying public.” – Rappler.com
