With soaring traffic figures, an ambitious new investor and plans to become the first transfer hub in the Philippines, these are exciting times for Mactan Cebu International Airport, writes Joe Bates.
Air traffic is on a huge growth trajectory in the Philippines and Mactan Cebu International Airport (CEB) is no exception to the rule, with passenger numbers soaring by an incredible 81% last year to just over 10 million.
The impressive numbers ensure that CEB is already the second busiest airport in the country, and it will cement that status this year with traffic expected to rise by 20% to return to pre-pandemic levels of around 12 million passengers per annum.
Domestic travel accounted for 75% of all passengers handled at the airport last year, while the South Korean market fuelled international traffic, making up 40% of 2.5 million passengers that arrived or departed on international services in 2023.
There are, of course, a number of reasons for the healthy upturn in traffic at CEB, but arguably among the most important are the impetus given to it by new shareholder Aboitiz InfraCapital, and its flourishing partnership with homebased carrier Cebu Pacific.
The airport’s route development team must also take a lot of credit for its current success as the country’s main gateway to the Central Visayas region is currently served by 20 airlines, which between them operate flights to 26 domestic and 12 international destinations from CEB.
These currently include 66 weekly flights to Seoul-Incheon and more than 20 services per week to Hong Kong, Tokyo, Busan, Singapore and Chinese Taipei.
With South Korea being one of its key markets, it is perhaps not surprising to find that South Korean carriers have a strong presence at CEB. They include Asiana, Jeju Air, Jin Air, Korean Air and T’way Air.
Emirates and Eva Air also serve Mactan Cebu International Airport, as do regional low-cost carriers Scoot and Tigerair Taiwan.
The impressive number of airlines and destinations served from CEB – located on an 800-hectare site in Lapu-Lapu City – led to the gateway winning a prestigious award at Routes Asia earlier this year for its “exceptional contributions to airport and destinations marketing in the Asia-Pacific region”.
Speaking at the ACI Asia-Pacific & Middle East/ACI World Annual General Assembly, Conference and Exhibition in Riyadh earlier this year, CEB CEO, Athanasios Titonis, said: “We are delivering something new in the Philippines. We [Mactan Cebu] will be the first transfer hub in the Philippines, a development we hope will provide the catalyst for growth in both international and domestic air travel.
“Domestic tourism has huge potential for us. We currently handle around eight million domestic passengers a year, of which 2.5 to 3 million are tourists. The plan is to work closely together with Cebu Pacific to develop our D to D [domestic to domestic] activity based on minimum connection times of around 35 minutes.
“We also aim to work with Cebu Pacific and the other airlines to reduce our minimum connection times for international services with onward connections to the other [Philippine] islands to just 45 minutes.”
Regarding future route development, Titonis reveals that his airport is actively exploring opportunities beyond Asia. In fact plans are underway to develop routes in markets such as India, Russia, Australia, and the United States, among others.
Ownership and new shareholder
The airport is operated by the Aboitiz InfraCapital GMR Cebu Airport Corporation (AGMCAC) on behalf of Mactan-Cebu International Airport Authority.
It replaced predecessor, GMR–Megawide Cebu Airport Corporation (GMCAC) – a joint venture between Indian global airport operator, GMR Airports Limited, and local company Megawide Construction Corporation – in September 2022, when the Philippine infrastructure investment group, Aboitiz InfraCapital (AIC), acquired a 33.3% stake in the former operator with a clause to purchase the remaining shares in the company on October 30, 2024.
At this point it is worth noting that GMCAC, which took over the responsibility for operating and developing Mactan Cebu in 2014, has arguably been one of the most successful concessions in the region based on its transformation of the airport.
It has, for example, invested hundreds of millions of dollars on enhancing and modernising the airport, with upgrades including the renovation and expansion of Terminal 1, the 2018 opening of CEB’s impressive new Terminal 2, and early 2024 completion of a second runway.
At the time of the AIC deal in September, 2022, BDO Capital and Investment Corp president, Eduardo Francisco, was quoted by Inquirer.net as stating that the equity infusion would bode well for GMCAC as it “provides it with more financial muscle, with a higher capitalisation, bigger balance sheet and an improved gearing ratio.”
He added that it also paved the way for the entry of another experienced and strong industry player as Aboitiz’s airport portfolio includes the New Bohol-Panglao International Airport and Laguindingan International Airport in the Philippines.
A statement from Aboitiz InfraCapital declared that the deal would “propel Mactan Cebu International Airport to the next level and establish its status as the Philippines’ premier international airport.”
Indeed, AIC’s president and CEO, Cosette Canilao, remarked: “We look forward to working side by side with our partners in further developing the Mactan-Cebu International Airport into a world class airport.
“The goal is to propel MCIA to the next level and establish its status as one of the Philippines’ premier international airports.”
While Rafael Aboitiz, AIC vice president-head for airports business, noted: “Mactan Cebu International Airport is more than just an airport, it’s a vital gateway to Cebu and the Philippines. Every passenger who travels through our doors drives economic growth, fosters closer cultural connections, and enriches themselves with the beauty and wonder of the Philippines.”
A potential example of what the future might hold for the airport under IAC was revealed earlier this summer when he shared plans for a study to investigate the potential development of a new mall and hotel at CEB as part of their long-term ambitions for the gateway.
Titonis certainly has no doubt that Aboitiz InfraCapital’s investment and involvement in Mactan Cebu will help the airport achieve new levels of success over the coming years.
He says: “We have ambitious goals that drive us toward our vision of becoming the world-class tourism and transfer gateway to the Philippines, with Cebu’s strategic central location giving us a unique advantage.
“To achieve this, we aim to tap into new and emerging markets through our diverse offerings. Our exceptional staff, the heart of our operations, combined with advancements in technology, will allow us to enhance efficiency and continue raising the bar for an outstanding passenger experience.”
Customer experience
Providing top quality customer service at the airport is important to Titonis and his management team, which is one of the reasons he is so delighted at Mactan-Cebu International Airport achieving Level 2 status in ACI’s Airport Customer Experience Accreditation programme.
The new milestone, achieved this summer, follows last year’s historic achievement when CEB became the first airport in the Philippines to receive Level 1 accreditation, setting a new benchmark for excellence.
The Level 2 accreditation, of course, acknowledges CEB’s effective customer experience strategy in managing daily operations and maintaining high customer satisfaction.
“Year after year, we refine our customer experience strategies by leveraging innovation and engaging in consultations with passengers and other stakeholders,” says AGMCAC’s customer experience head, Ricia Montejo.
“Apart from the warm and inviting culture that the airport practices towards its passengers, we gather representatives from different age groups to seek their ideas and understand their sentiments, which are relevant in enhancing the overall airport experience.”
While Mactan-Cebu Airport Authority’s general manager, Julius Neri, enthuses: “A clear and proven strategy that meets global standards is at the core of our operations.
“We ensure smooth movements are facilitated daily in the airport and create and manage long-term plans that put our customers first.”
This accolade was followed by the August 2024 award of a 4-Star Skytrax rating for Terminal 2, which judged the facility for the overall efficiency of its staff, hospitality, service consistency, and language proficiency.
Skytrax itself said that the rating is testament to CEB’s commitment to delivering a top-tier passenger experience, underpinned by exceptional service and product quality.
Reflecting on the award, Titonis says: “The dedication of our airport staff plays a crucial role in our operations. Kudos to our team for their outstanding performance.
“We are committed to going the extra mile to ensure the comfort and safety of our passengers.”
Montejo simply notes that “providing friendly and efficient service is at the core of our commitment to passengers”. She adds: “We achieve this by conducting training programmes that meet global customer service standards.”
Sustainability
The airport operator is equally committed to protecting the planet and supporting its neighbouring communities by ensuring CEB’s sustainable and responsible development. This dedication is reflected in the recent achievement of gaining Level 1 ‘Mapping’ status in ACI’s Airport Carbon Accrediation programme.
Titonis enthuses: “Achieving Carbon Neutrality is a long journey that requires time, dedication, and innovation in our approach to reducing carbon emissions.”
He notes that Mactan Cebu is fully onboard with embracing electrical vehicles as aviation transitions away from using fossil fuels to power ground vehicles and equipment at airports in line with the industry’s net zero CO2 emissions target.
The CEO is also quick to point out that solar panels across the airport site will supply 12% of CEB’s energy by the end of the year, and dangles the carrot that the gateway might host a “lighthouse project” in the future, possibly involving the use of hydrogen.
Its ‘coastal clean-up’ initiative recently won the top Platinum Award in ACI Asia-Pacific and Middle East’s Green Recognition 2024 programme for airports handling between 8-15mppa.
The airport is also pioneering the use of aircraft on-the-ground power solutions such as the Fixed Power Unit (FPU) and Pre-conditioned Air (PCA) services to reduce carbon emissions and offset fuel costs upon boarding and arrival of passengers.
The FPU is an eco-friendly ground power system that enables aircraft to connect directly to a stationary, electricity-powered energy source while parked at a contact stand. Additionally, PCA is an external device used for cooling and dehumidifying, delivering fresh, preconditioned air to the aircraft and jet bridges between flights.
Crucially, home carrier Cebu Pacific supports the initiative, its president and CEO, Xander Lao, noting: “Cebu Pacific fully supports Mactan Cebu International Airport’s ground equipment solutions initiative.
“This represents a crucial step forward in creating a sustainable future for Philippine aviation. By being the first airline to use this technology at Mactan Cebu, we are not only reducing our carbon emissions but also setting a benchmark for the industry.”
The airport began this particular sustainability initiative in 2020 with the initiation of FPU and PCA services through Bridge Mounted Equipment (BME). Despite pandemic-related delays, it obtained in principle approval from airline partners for the initiative in in the fourth quarter of 2019 and is now moving forward with implementation.
As a result, the airport installed FPU and PCA units under passenger boarding bridges, ensuring easy access for aircraft. This shift is expected to reduce fluctuating fuel costs, APU maintenance costs, CO2 and NOx emissions, airport noise levels, and improve operational safety.
“Airlines could potentially see a cost reduction of 40% to 60% by transitioning to BME services at Mactan Cebu International Airport,” enthuses Titonis.
“With the multiple benefits of BME services, we are confident in the support of our airline partners to implement these sustainable solutions at MCIA. Together, we can reduce our environmental impact and pave the way for a greener future in aviation.”
And in what is being described as a “significiant milestone”, the airport recently signed a Memorandum of Understanding to become the first gateway to take part in a new programme designed by ACI Asia Pacific & Middle East to help airports establish a comprehensive framework on environmentally sustainable initiatives to achieve their net zero emissions goals.
ICAO president, Salvatore Sciacchitano, and secretary general, Juan Carlos Salazar, were present at the signing of the MoU, which took place at 59th Conference of Directors General of Civil Aviation, Asia and Pacific Region, in Cebu, in mid-October.