AirAsia Philippines pays CAAP obligations, avoids shutdown

By Ashley Erika O. Jose, Reporter

AIRASIA Philippines has settled its financial obligations with the Civil Aviation Authority of the Philippines (CAAP), avoiding a potential disruption to its operations at government-run airports.

“CAAP confirms that AirAsia Philippines has complied with the directive to settle its obligations this morning, June 4, subject to ongoing standard reconciliation processes,” the regulator said in a statement on Thursday.

The settlement comes after earlier reports that the regulator issued a cease-and-desist order on June 2, directing the carrier to halt operations within three days if unpaid fees were not addressed.

The unpaid obligations amounting to about P271.94 million were linked to airport-related charges, including navigation fees, landing and parking fees and passenger service charges.

CAAP said these also included unremitted terminal fees collected from passengers, as well as amounts tied to expired and unused tickets that are held in trust for the authority.

CAAP earlier warned that failure to settle the obligations could lead to operational suspension at airports under its jurisdiction.

It also noted that discussions with AirAsia Philippines had been going on since last year as part of efforts to resolve the issue without service interruptions.

The regulator said it had given the airline until June 6 to fully settle its accounts, but confirmed that payment had already been made ahead of the deadline.

It added that it appreciates the airline’s cooperation and said the resolution supports the orderly conduct of aviation operations in the country.

“Any interruption in airline operations carries significant consequences, including economic impacts, potential employment displacement and disruption to passenger and cargo services,” CAAP said. “Accordingly, the settlement of the obligations remains the most practical and preferred course of action.”

In March, CAAP issued a demand letter to AirAsia Philippines, ordering the airline to settle unpaid obligations, including airport fees and unremitted passenger charges totaling P833.66 million.

AirAsia Philippines on Wednesday said its flights continue to operate as scheduled across its network.

The carrier did not directly address the details of the obligations but said operations remain unaffected, subject to standard factors such as weather conditions and operational requirements.

AirAsia had faced mounting scrutiny over its outstanding dues, which regulators said accumulated over several years.

In a statement, AirAsia X Bhd., speaking on behalf of the group, denied reports that AirAsia Philippines would be grounded, calling them inaccurate and suggesting they formed part of a broader campaign aimed at the airline. It said operations in the Philippines remain stable and unaffected.

The group reiterated that all flights and services would continue as scheduled. It added that AirAsia remains focused on maintaining affordable air travel and expanding connectivity in the Philippines, which is one of its key Southeast Asian markets.

AirAsia Group advisor and co-founder Tony Fernandes said the airline continues to see strong long-term prospects in the Philippines, supported by airport infrastructure improvements, including developments at Ninoy Aquino International Airport and Mactan-Cebu International Airport.

He said a planned fleet expansion would let the airline increase capacity and improve efficiency, enabling it to serve more passengers and strengthen its regional network.

AirAsia is part of a broader low-cost carrier group operating across Malaysia, Thailand, Indonesia, the Philippines and Cambodia. Its Philippine unit began operations in 2012 and has since grown to serve millions of passengers annually.