In a significant blow to the aviation sector, Royal Air Philippines has been forced into administration, resulting in the immediate grounding of all its commercial flights and the cancellation of bookings for thousands of passengers. Reports indicate that between 3,000 and 4,000 travellers holding reservations from January through March have been left stranded, scrambling for refunds and alternative travel arrangements.
Passengers Left in Limbo as Airline Collapses
The airline's abrupt entry into administration has created widespread disruption, with affected passengers now seeking urgent solutions. Royal Air Philippines has acknowledged the crisis on its website, stating, "We are working on providing refunds and hope to resume flights at an unspecified date in the future. Thank you for your patience and understanding. We eagerly anticipate welcoming you aboard soon." However, this offers little immediate relief to those caught in the turmoil.
CEO Warned of Weak Demand Prior to Collapse
Royal Air Philippines CEO Eduardo Novillas had foreshadowed the airline's struggles weeks earlier, warning in a letter to a travel agency ahead of Christmas that the carrier would halt commercial flights by January 4. He attributed this decision to "significantly low" interest from key markets, a point echoed by Asian Development Bank economist Jules Hugot, who noted that arrivals from China to the Philippines remained well below pre-pandemic levels entering early 2025.
Background and Ownership of the Airline
Royal Air Philippines, often referred to simply as Royal Air, is owned by the Cambodia-registered Lanmei Group, also known as the Lancang-Mekong Group. The airline is backed by Chinese investment and was founded by Li Kun, the former president of Shenzhen Airlines, who now serves as its chairman. Originally launched in 2002 as a charter operator, the airline shifted toward a low-cost carrier model in 2018 after receiving its commercial flight licence the previous year.
Its first passenger service took off eight years ago, and at its peak, Royal Air Philippines operated routes to several international destinations, including Cambodia, China, South Korea, Hong Kong, and Taiwan. This collapse marks a stark reversal for an airline that once had ambitious expansion plans.
Recent Turbulence in the Aviation Industry
This development follows closely on the heels of another airline failure, with a British airline plunging into liquidation just weeks ago. Scottish firm Ecojet Airlines, billed as the world's first all-electric airline, faced a similar fate after a reported bid to raise £20 million fell short. Established in 2023 by entrepreneur Dale Vince, a prominent Labour donor and owner of Forest Green Rovers football club, Ecojet had lofty plans for long-haul flights and European routes.
An initial route from Edinburgh to Southampton was plotted, but a petition was brought to Edinburgh Sheriff Court for the business to be wound up, with joint interim liquidators appointed. At the time of launch, Mr Vince had stated, "This is a vital frontier in the move to net zero, green living, whatever you choose to call it - and it's absolutely doable. It's a matter of when, not if." The Herald reports that Paul Dounis and Mark Harper, of Opus Restructuring, were appointed as provisional liquidators, with Opus confirming the action followed a "voluntary liquidation initiated by the company's board."
The dual collapses of Royal Air Philippines and Ecojet Airlines highlight ongoing challenges in the aviation industry, from fluctuating demand to financial instability, leaving passengers and investors alike navigating uncertain skies.
