Philippines AirAsia expects to report a profit in 2016, despite facing slots constraints and stiff competition in Manila.

In an interview on the sidelines of Routes Asia in Manila, chief executive Joy Caneba says the airline was profitable in the fourth quarter of 2015, and is confident of maintaining that performance.

This year, the carrier plans to add between three and five aircraft to its fleet, with an aim of developing Kalibo as its next hub, connecting it to China and Korea. It currently operates 12 Airbus A320s.

“Now we have to stabilise our network and route performance. With the oil price being down, it’s a time for us to improve our route performance,” says Caneba.

She adds that more aggressive growth will come in 2017, when the airline plans to expand its operations into Vietnam, secondary cities in China, Thailand and Indonesia. Within the next five years, she envisions that Philippines AirAsia will have a fleet of about 30 aircraft.

One of the biggest challenges for the airline at present, however, is the availability of slots at Ninoy Aquino International airport, where it is “getting really tough” to get new slots.

“It’s easy to put into operation an aircraft, but where do you actually park it and do you have slots for routes to develop it?,” says Caneba. “With the oil price down, everyone has been trying to put in as much growth as they can, everyone is racing to get slots, but when can we actually get it? It’s delaying our plans and it’s a struggle at the moment.”

The airline is hence looking to develop hubs outside of Manila, and besides Kalibo, with plans to grow international connections from the coastal city Puerto Princesa.

Its strategy against the local giants, meanwhile, is to tap the strength of the larger AirAsia group network.

“While Philippine Airlines and Cebu Pacific are giants in the Philippine market, out of the country. Us as AirAsia, we’re bigger… we have already entrenched ourselves in the domestic market, and now it’s up to us to connect that to the international playing field,” says Caneba.

Source: Cirium Dashboard