AirAsia Philippines has sounded the alarm on mounting pressures confronting both the aviation industry and the broader tourism sector, warning of a “triple threat” that is squeezing margins and dampening demand.
Speaking at the Tourism Congress of the Philippines national conference on Wednesday, company president and general manager Anna Victoria Lu said airlines are contending with surging fuel prices, a sharply weaker peso, and softening consumer spending.
Jet fuel costs, Lu noted, have climbed to roughly three times pre-conflict levels, dramatically inflating operating expenses across the industry. At the same time, the Philippine peso has slid from around P56–P57 to beyond P61 against the US dollar, compounding financial strain for carriers whose key expenditures—such as maintenance and aircraft parts—are largely dollar-denominated.
“This is particularly relevant to us because many of our costs are in dollars, especially for maintenance and spare parts needed to keep aircraft up to safety standards,” Lu said.
Revenue pressures are also intensifying. Airlines continue to honor tickets sold months in advance at lower fares, locking in thinner margins even as costs surge. This mismatch, Lu said, forces carriers to absorb higher expenses without the ability to immediately pass them on to passengers.
Compounding the challenge is a shift in consumer behavior. With inflation eroding purchasing power, more households are tightening budgets and treating travel as discretionary. “Travel is increasingly seen as a luxury,” Lu said, pointing to softer demand across segments.
Given aviation’s central role in driving visitor traffic, Lu emphasized the need for supportive government policies to help stabilize the industry and sustain tourism’s recovery amid ongoing volatility.
