Surprise? Domestic Airfares in the Philippines Still Among Cheapest in Southeast Asia, Airline Exec Says
Airfares within the Philippines still costs significantly less compared to similar distances in neighboring countries in Southeast Asia, according to a local airline executive.
“The reality is, if we compare Manila-Davao to a similar sector length within Southeast Asia, we’re actually seeing something like 15 to 20 percent more affordability for the Philippines for their fares,” Cebu Pacific President and Chief Commercial Officer Alexander Lao said, based on the carrier’s independent study of airfares in Southeast Asia.
Lao made the statement during the Philippine Hotel Owners Association’s Philippine Hotel Connect 2025 held last week. The airline exec noted however, ticket prices to some of the country’s major island destinations, particularly Coron in Palawan and Siargao in Surigao del Norte, could further go down if and when airports at these locations are upgraded.
ALSO READ
What’s the DILG and DENR Doing to ‘Improve Situation’ in El Nido?
Is the Philippines Really More Expensive for Travelers Than Our SEA Neighbors?
“Ultimately, it depends on what infrastructure can deliver,” Lao stressed. “We can only use the smaller turbo-propeller aircraft, [that] can only take in 78 seats. If we can bring in an Airbus A321 [with] 240 seats, in theory, we can spread the cost of two pilots, instead of across 78 seats, to across 240 seats.”
Interestingly, the Philippines remains one of the few countries in the world that still regulates airfares, according to the Civil Aeronautics Board. However, dynamic pricing—or the strategy where price is adjusted based on current market conditions, demand, and other factors—is allowed.
A panel during the PHOA’s Philippine Hotel Connect 2025. From left: former Transportation Undersecretary Roberto C.O. Lim, Cebu Pacific President and Chief Commercial Officer Alexander Lao, CAB Executive Director Carmelo Arcilla, IATA Philippine Country Manager Samuel David, and Lipad Corporate Communications Head Teri Flores
“For the domestic sector, the CAB sets the maximum ceiling because it is required [by law], although we have internal pricing system already per Executive Order No. 219,” said CAB Executive Director Carmelo L. Arcilla. “What we do is improve the ceiling. We ensure the reasonableness of the airfare.” He said the agency does this based on fuel, foreign exchange rates, historical trend, among other factors.
The CAB recently fined AirAsia MOVE, the online booking platform for AirAsia, P6 million for allegedly posting “excessive and unreasonable" airfares. The agency also penalized Trip.com and Agoda for similar violations.
Arcilla further noted that recent “sharp increases” in airfares in the country are due to “expensive spare parts” purchased by local carriers, owing to ongoing global supply chain issues.
According to Samuel S. David, Philippines country manager of the International Air Transport Association, other factors driving up the cost of plane tickets are jet fuel, which he said accounts for about 26 percent of an airline’s cost, an impending increase in ground charges like takeoff/landing fees, and rental rates, like what has happened at the now-privatized Ninoy Aquino International Airport (Naia).
