By Ashley Erika O. Jose, Reporter
LISTED Philippine airline companies are likely to show uneven performance in 2026, buoyed by resilient travel demand and fleet expansion, but constrained by high costs and external risks, analysts said.
“We expect listed Philippine airline companies, such as Cebu Pacific and Philippine Airlines, to deliver generally improving but still uneven results, underpinned by strong domestic and international travel demand and route expansion,” Unicapital Securities, Inc. Research Head Wendy B. Estacio-Cruz said in a Viber message.
For 2026, the International Air Transport Association (IATA) expects the airline industry in Asia to sustain growth, driven by strong passenger and cargo demand.
Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said airline companies may post mixed results, with the potential for solid revenue growth but continued pressure on profitability.
“Demand for air travel is expected to remain structurally strong, supported by sustained leisure travel, gradual recovery in business travel, and expanding middle-class travel in emerging markets,” he said.
Ms. Estacio-Cruz noted that airlines’ continued route expansion and the addition of more fuel-efficient aircraft would increase revenues, load factors, and cargo volumes.
Stronger revenue growth is projected this year as carriers adapt to softer yields by expanding ancillary services and maintaining high load factors through efficient fleet utilization, according to IATA.
“We see profitability remaining constrained by thin margins, intense competition, peso volatility, and structurally high operating costs such as aircraft leases, labor, and airport fees,” Ms. Estacio-Cruz said.
In a separate report, IATA flagged supply chain disruptions, climate change, cyber threats, and artificial intelligence as additional challenges to the sector.
In December, local airlines were affected by an Airbus software update, grounding several aircraft. The Transportation Department reported 93 flights were affected — 82 canceled and 11 delayed — impacting at least 14,000 passengers.
IATA also noted a record-high backlog of aircraft orders, creating a mismatch between demand and production. The association said this constraint is unlikely to ease before 2031-2034.
Local carriers have significant aircraft orders: Cebu Pacific has ordered up to 152 Airbus aircraft valued at P1.4 trillion ($24 billion), expected to arrive by 2029, while Philippine Airlines is preparing for nine Airbus A350-1000s and 13 A321 New Engine Option (NEO) deliveries.
Mr. Arce said passenger demand is likely to remain resilient this year, supported by the normalization of international and long-haul travel and expanded route networks.
“Capacity rationalization and tighter industry discipline may help sustain yields, especially if aircraft delivery delays persist and limit oversupply. Airlines with newer, more fuel-efficient fleets stand to benefit from lower unit costs,” he said.
The Civil Aeronautics Board (CAB) reported that air passenger volume rose 6.25% to 46.84 million in the nine months ending September 2025. Domestic passengers totaled 24.95 million, up 5.36%, while international passengers reached 21.89 million, up 7.25%.
PAL Holdings, Inc., operator of Philippine Airlines, posted a 33.58% rise in attributable net income to P9.03 billion for the first nine months of 2025.
Cebu Air, Inc., operator of Cebu Pacific, recorded an attributable net income of P5.03 billion for the same period, reversing a net loss of P12.05 billion a year earlier.
“Overall, listed airline companies in 2026 are likely to show uneven performance rather than broad-based strength. Well-capitalized carriers with efficient fleets, strong route networks, and diversified revenue streams may post relatively strong results, while airlines with high leverage, older aircraft, or heavy exposure to cost inflation may struggle to convert demand growth into sustainable profitability,” Mr. Arce said.
Ms. Estacio-Cruz added that the sector’s performance remains closely affected by external variables beyond the control of airlines, making earnings visibility more uncertain than in many other industries. “We maintain a moderately positive view, with 2026 performance hinging more on cost discipline and operational efficiency than on demand growth alone,” she said.