Happy new year at NAIA

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A research conducted by Oxford Economics in 50 countries has found that for every $100 per capita invested in airport infrastructure, countries saw an average of 50 more air arrivals per capita.

These additional passengers, it emphasized, would have spent money on goods and services, forged friendships and cultural connections, and done business, all of which would have stimulated economic activity and jobs.

Meanwhile, the Air Transport Action Group noted that in emerging economies, the impact of airport infrastructure investment is even more dramatic. A 10 percent increase in airport connectivity, ATAG pointed out, results in a 4.7 percent increase in foreign direct investments, a 0.5 percent rise in regional gross domestic product, and a one percent growth in employment.

A study by the Philippine Institute for Development Studies (PIDS) highlighted that the state of airports, like our toilets that go under the scrutiny of our visitors, is a reflection of a country’s good housekeeping and a source of national pride. Global studies, it said, have proven the correctness of airport privatization to deliver improved service, boost efficiency and expand passenger volume as governments grapple with lack of financial muscle to undertake such capital-intensive endeavor.

Well aware of this, not to mention its unwillingness or inability to invest the necessary funds to allow its primary international gateway to keep up with the increasing demand for air travel, the Philippine government decided to privatize the Ninoy Aquino International Airport (NAIA) which was being run by the government corporation Manila International Airport Authority (MIAA) since 1982.

Frequently ranked as one of the worst airports in the region and in the world, NAIA was plagued by complaints about flight delays, other operational issues, corruption. Built to handle only 32 million passengers a year, NAIA was already operating beyond capacity. In 2024, it handled 50.1 million passengers and total flights of 293,488.

On Feb. 16,2024, the Department of Transportation announced that a consortium led by San Miguel Corp. (SMC) won the bidding for the P170.6-billion NAIA rehabilitation project. The consortium was the frontrunner in the race for the highly coveted project as it proposed a revenue share of government of 82.16 percent, more than double that offered by its two competitors. The GMR consortium proposed a share of 33.3 percent and the Manila International Airport Consortium, 25.91 percent.

The SMC-led consortium will have a 15-year concession period to implement the project, which can be extended by 10 years, if needed.

The New NAIA Infra Corp. (NNIC), the consortium that includes SMC and Incheon International Airport Corp., officially took over the management and operation of NAIA, as well as the task of modernizing the 76-year-old gateway, on Sept. 14, 2024.

NNIC committed to spend P170 billion to execute its phased but ambitious plan to elevate NAIA to world-class standards that includes increasing passenger capacity from 43 million to 62 million annually, and air traffic movements from 42 to 48 per hour.

But aside from this, the DOTr said that the national government is expected to earn around P911 billion from the privatization of NAIA, or around P36 billion every year.

Just over a year since taking over NAIA, NNIC has remitted P57 billion to the government, including the P30-billion upfront payment under the 15-year contract.

NAIA’s privatization could not have come at a better time.

It was recently reported that NAIA recorded its highest annual passenger traffic in 2025, reflecting sustained demand for air travel and increased airport activity.

Passenger traffic reached 52.02 million during the year, the highest annual total recorded for the airport.

December 2025 was the busiest month in NAIA’s history with 4.86 million passengers, of which international travelers accounted for 2.367 million of the total which is a monthly high, and domestic passengers, 2.495 million, the second-largest monthly volume recorded.

The figures represent total airport activity across domestic, outbound and returning Filipino travel, business travel and connecting traffic.

But despite the higher passenger volumes, airport operations remained stable during peak periods, supported by operational improvements implemented over the course of the year, NNIC said.

These included the rollout of new biometric immigration e-gates funded by NNIC, upgrades of passenger processing systems and terminal facilities, and closer coordination among airlines, government agencies and airport stakeholders.

NNIC explained that managing higher passenger volumes requires both infrastructure and close coordination, and that the focus has been on improving flow, reducing bottlenecks and ensuring the airport can handle peak demand more effectively.

Many passengers reported better experience at NAIA despite these heavy volumes associated with the holidays, not to mention the increasing penchant for travel.

As I reported last week, passengers were also treated to a number of wonderful surprises befitting the holidays, including the launching of a new e-gates system at NAIA Terminal 3 that can clear passengers in as little as 20 seconds, with further improvements expected as the system continues to learn and begins to stabilize.

NNIC reported that a total of 78 biometric immigration e-gates are being deployed across NAIA under a phased rollout, with systems already operational at Terminals 1 and 3 where international flights operate.

The e-gates system uses biometric identity verification and document authentication as well as face scanning to streamline processing while meeting the security requirements of border authorities.

NNIC spent over a billion pesos to procure these much-needed e-gates and donated these to the Bureau of Immigration.

Passengers were also treated to the opening of two new food halls at Terminal 3 – the All-Filipino Food Hall and the Mezzanine Food Hall, a new Dignitaries Lounge at Terminal 3 and a Medical Tourism Concierge Area.

NAIA’s private operator is also preparing to open a new airside Food Village at T3 located after security clearance.

The opening of newly built, tastefully designed, and well-curated food halls and food courts, along with a brand new and larger OFW Lounge at Terminal 1, cap off a whirlwind first 15 months for NNIC at NAIA.

Other key improvements at NAIA include new chillers, feeders, and power substations; rehabilitated drainage and cleaned waterways around NAIA that eliminated flooding; upgraded airfield lighting, pavements and power systems; refurbished terminal interiors, better WiFi and immigration queuing; new escalators, walkalators, X-ray units and CCTV systems; automated parking system, centralized TNVS hub and smoother traffic flow; wider curbsides and more parking spaces; 11,820 new chairs and 2,500 baggage trolleys; renovation of restrooms and construction of 10 new ones; and 20 new shuttle buses capable of serving half a million travellers,  to name a few. Meanwhile, the construction of Terminals 4 and 5 is underway.

All these benefits without government having to shell out public funds, and in just a little over a year since NAIA was placed in private hands.

Yes, there was an increase in NAIA terminal fees beginning last September 2025, from P550 to P950 for international travel and from P200 to P390 for domestic flights. But these passenger service charges (PSC) have not changed for 25 years, one of the reasons why NAIA has not been able to invest in maintenance and service improvements.

And even with the new rates, NAIA’s fees count as among the lowest in Southeast Asia and are at par with those in Cebu, Clark, Davao, Iloilo, and Bohol. Fees at airports like Singapore Changi, Tokyo Haneda, Bangkok Suvarnabhumi and Kuala Lumpur International range from P894 to over P2,600, according to a report by insider.ph.

Despite the adjustments, the new rates are even lower in real value than 25 years ago when adjusted for inflation

As pointed out in the same report, in the 25 years since the last PSC adjustment, virtually every cost associated with running an airport has surged.

The PIDS study emphasized that for years, NAIA has been a source of national shame. And tapping the private sector to restore our wounded national pride when the government can’t is a step in the right direction.

We cannot continue to be rent seekers. We have to give our share if we want a better travel experience, and more importantly, a good image for our country.

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