Philippine airlines are losing Chinese tourists amid coronavirus outbreak

When Philippine President Rodrigo Duterte pursued closer foreign relations with China, he helped attract planeloads of Chinese tourists to the Southeast Asian nation. Now, the coronavirus outbreak is reversing the trend, much to the chagrin of airline companies.

Budget carrier Cebu Pacific has put its expansion plans into the Chinese market on hold after the Covid-19 disease triggered the biggest health scare in the region since the Sars (severe acute respiratory syndrome) outbreak in 2003. Cebu Pacific and Philippine Airlines have both canceled all China-related flights until the end of March, and both stocks have taken a beating along the way.

The country has reported three infection cases, and recorded the first death outside China on February 2. After that, Duterte imposed a sweeping ban on travels to and from mainland China, Hong Kong and Macau to protect the country in one of the most drastic reactions by regional governments. Approvals for visas on arrival have also been tightened.

“Traveller volumes on China-Philippines routes have fallen,” said Jose Enrique Perez De Tagle, vice-president of corporate communications at PAL Holdings, which owns Philippine Airlines. Mainland Chinese account for about 10 percent of its global passengers, he added.

Since Duterte won the presidential election in June 2016, the combative president has embraced closer ties with Beijing despite territorial disputes in the South China Sea. He has also distanced the country from the US, including a decision last week to end the Visiting Forces Agreement, a 21-year pact that allowed US troops to be based in the country for bilateral exercises.