Aboitiz InfraCapital has indicated that the escalating tensions in the Middle East could begin to affect its airport business as early as June, as sustained high fuel prices may disrupt airline operations and slow passenger growth. Cosette Canilao, the company's president and chief executive officer, stated that if the conflict persists and fuel prices remain elevated, the impact could include higher airfares, route adjustments, reduced flight frequencies, and potential suspension of less profitable routes.
Monitoring the Situation
The company is closely monitoring developments related to the Iran conflict, which has contributed to volatility in global oil prices and raised concerns across the aviation sector. Aboitiz InfraCapital, the infrastructure arm of the Aboitiz Group, operates the Mactan-Cebu International Airport (MCIA) through its subsidiary Aboitiz InfraCapital Cebu Airport Corp. (ACAC).
Strong Airport Performance Despite Risks
Despite these challenges, Aboitiz InfraCapital reported robust performance at MCIA, which recorded its highest monthly passenger traffic in January. First-quarter volumes exceeded expectations, reflecting sustained travel demand. Canilao noted that some airlines have already begun adjusting routes and frequencies in response to rising costs, although Emirates has resumed its daily Dubai–Cebu service, supporting international connectivity.
To mitigate potential disruptions, the company has developed multiple passenger traffic scenarios and is working closely with airline partners to align network plans and provide support. Canilao expects the impact on second-quarter revenues to be limited, as most tickets have already been purchased. “We remain cautiously optimistic,” she said, expressing hope that tensions will ease in the second half of the year.
Dialogue with Stakeholders
ACAC recently convened hotel executives and industry groups to assess the potential impact of the Middle East crisis on passenger traffic and tourism. The dialogue focused on mitigating risks from surging jet fuel prices, which could drive up airfares and dampen travel demand. Athanasios Titonis, CEO of Aboitiz InfraCapital Operating Airports, emphasized the interconnectedness of aviation and tourism, noting that proactive collaboration with hotel partners and scenario planning would help the industry respond effectively to shifting market conditions.
Growth Opportunities
Despite near-term risks, ACAC is pursuing growth opportunities, including expanding direct connectivity to emerging international markets to diversify demand sources. Canilao added that the company's water and telecom tower businesses are expected to provide steady income due to relatively inelastic demand. The company is also advancing projects in its pipeline and expects to boost investment capacity following the entry of Jera Co., Inc. as a strategic partner.
Aboitiz InfraCapital, Inc. recorded an income contribution of P680 million, a six percent increase from 2024, supported by lot sales at Tari Estate in Tarlac, increased passenger traffic at MCIA, the addition of Laguindingan and Bohol-Panglao airports, and the contribution of its Apo Agua Infrastructura in Davao.
