A Study on the International Air Passenger Demand in the Philippines:

Focus on Passengers Airport Choice

Jose Romarx C. Salas
M.A. Urban and Regional Planning (Transportation Planning), 1998
School of Urban and Regional Planning, University of the Philippines Diliman
Adviser:
Dr. Hussein S. Lidasan
Associate Professor, School of Urban and Regional Planning
University of the Philippines Diliman
Abstract: Civil aviation in Asia-Pacific region is increasing at a rapid rate, faster than any other region of
the world. This phenomenon poses an opportunity as well as a threat for the civil aviation sector of the
Philippines. Ninoy Aquino International Airport (NAIA), however, has a number of airside and landside
limitations that make it an inferior entry port to Asia-Pacific. To wit, the Philippines has to accelerate
development of its aviation sector to be able to take advantage of the increasing demand. This study
presents some scenarios for aviation infrastructure development. Clark International Airport (CLARK) is
included in the scope of the study. It is identified as an alternative gateway in the long term due to its
colossal runways and vast vacant lands. NAIA and CLARK are compared and contrasted to show
alternative development options. The study also investigates the performance of the Philippines on
international air passenger movement. A survey entitled International Passenger Survey at NAIA is
conducted to establish some travelers trip-making patterns. More importantly, passenger airport choice
through ranking is measured in this research. Results show that passengers prefer shorter access time to
the airport even if this would mean lower frequency of flights. Thus, utility of the landside component is
perceived to be higher than airside component. Relevant findings are used to firm up the scenariobuilding component of this study and in offering policy recommendations. Policy recommendations
include bilateral planning and market identification.

1. INTRODUCTION

2. OBJECTIVES

The increasing international air passenger

demand in the Philippines and in the Asia
Pacific region provides opportunities and threats
at the same time. One opportunity is that the
Philippines could profit from this phenomenon,
if it could accommodate and capture specific
groups in the market. One threat, however, is
that passengers will choose airports from other
countries if the Philippines could not
accommodate increasing demand and specific
expectations of passengers on the Level of
Service (LOS).

The general objective of this paper is to promote

the two-airport system framework in
investigating the international air passenger
demand in the Philippines and in relating this
demand to the Asia-Pacific region and the
world. It aims to show the present demand in
NAIA and some trip-making patterns of
passengers by conducting surveys with them.

The Ninoy Aquino International Airport

(NAIA), the main gateway to and from the
Philippines, is experiencing various limitations
on infrastructure and services to provide the
needs and wants of passengers. Thus, one
question this study wishes to answer is What
infrastructure development options does the
Philippines have to improve its level of service
to international passengers? A prerequisite
question is What do passengers expect of the
LOS of international airports? Answering the
latter facilitates the solution of the former.

In line with this objective, the study has the

following aims:
a. Present the annual volume of international
air passenger in the Philippines.
b. Show the aggregate origin-destination
pattern of departing international passenger
at NAIA.
c. Approximate the trip pattern of departing
passengers at NAIA.
d. Establish major trip purposes of departing
passengers at NAIA.
e. Present the socio-economic characteristics
of departing passengers.
f. Formulate
infrastructure
development
scenarios for the two-airport system of
NAIA and CLARK.

g. Calibrate variables for discrete airport

choice models.
h. Present policy recommendations on the twoairport system.
3. SIGNIFICANCE OF THE STUDY
This study aims to provide recent and reliable
literature on air transportation for planning
purposes. It presents updated performance and
projection on air traffic demand. The study
presents some infrastructure development
scenarios for NAIA and CLARK. It is an initial
effort to mathematical modeling of the twoairport system. Based on formulated scenarios
and modeling efforts, policy recommendations
are offered.
Furthermore, this research promotes the
framework of regional role of the two-airport
system in the Asia-pacific region. This means
that the Philippines should package the two
main international airports as complementary,
and should formulate strategies on capturing
specific market for both airports based on tripmaking patterns of identified traveling groups.
This framework is very relevant since the region
is predicted to have the highest growth up to the
year 2010. Thus, the Philippines civil aviation
sector would benefit from this increasing
demand if it knows what market to serve.
4. SCOPE AND LIMITATION
This study focuses on the commercial aspect of
civil aviation. This means general and military
aviation are discussed sparingly. It dwells on
the international air passenger of the Philippine
Civil Aviation System. It limits discussion on
cargo and aircraft movements. It focuses on
NAIA and CLARK while it presents the total
international air traffic of the Philippines. The
calibration of variables for mathematical models
in this study uses access time and frequency of
flights as dependent variables. These are, of
course, very limited. Nonetheless, they are
sufficient for this initial modeling and scenario
building study.
5. REVIEW OF RELATED LITERATURE
5.1 MMUTIS Surveys
There are four airport surveys included in he
MMUTIS surveys (DOTC, 1997). These are (1)
traffic count and vehicle occupancy survey, (2)
air passenger/crew interview survey, (3) wellwisher/visitor survey, and (4) airport employee

survey. The main objective of the surveys is to

evaluate the impact of the airport on land
transportation. It was more concerned on the
landside than on the airside aspect of NAIA.
Nonetheless, the air passenger/crew survey is
valuable in terms of composition of the sample.
The survey served as a good reference on some
perceptions of passengers and crews on traffic
situation in NAIA and Metro-Manila. The
survey is used to cross-examine its findings with
the results of the primary data gathering of this
research.
5.2 Development Plans for NAIA
The Manila International Airport Authority
(MIAA), the authority supervising NAIA, has
outlined some major plans. The 15 Years
report (MIAA, 1997) identified short, medium,
and long-term plans. Short-term plans consist of
repair, construction and improvement of the
runway, navigational aids and landside
infrastructure. Medium-term plans focus on the
construction of new domestic passenger terminal
(NAIA Terminal 2) international passenger and
cargo terminal.
MIAAs long-term plan
envisions a modern aeropolis integrating
NAIA with the surrounding areas. This vision is
still largely on the drawing boards.
MIAA is also concerned on landside
development. The Ninoy Aquino International
Airport Access Roadway System forecasts an
average of 1.22 volume/capacity ratio by 2010
and recommends undertaking a road network
development and identified three possible
alignments that comprise a total of five
development options.
5.3 Development Plans for CLARK
The Bases Conversion Development Authority
(BCDA), Clark Development Corporation
(CDC) and Clark International Airport
Corporation (CIAC) have drafted a master and
business plans for the Clark Special Economic
Zone (CSEZ) and Clark International Airport
(CLARK). BCDA-CDC-CIAC approved a
three-phase plan for CLARK. Phase I, from
1996-2005 is the opening of the international
airport up to 20 million passengers. This stream
of the master plan assumes the closure of NAIA.
Phase II, from 2006-2015 is characterized by
expansion of facilities that include an
independent runway to accommodate 25 million
passengers. Phase III is said to be the ultimate
development of the airport which will have a
capacity of 50 million passengers annually.

6. STUDY FRAMEWORK AND

METHODOLOGY
6.1 Study Framework

speaking countries declined from answering the

survey.
Survey Instrument
The questionnaire is composed of 4 main parts
namely: (1) characteristic of the trip; (2) travels
in Asia; (3) Trips in the Philippines; and (4)
Socio-Economic profile. There are two sets of
questionnaires, questionnaire A (QA) and B
(QB). QA and QB are exactly similar except for
the stated preference question in part C that
consisted of comparing 4 airports n terms of
LOS, frequency of flights and access time.
Data Analysis
Initial data analysis was done using Microsoft
Excel. Data validation and descriptive statistics
are done in this spreadsheet. The sanitized data
is further processed in the Statistical Analysis
System (SAS) package. Mathematical modeling
is also processed in SAS.
7.2 Scenario Building

Figure 1. Framework of the Study

6.2 Study Area
The two study areas are NAIA and CLARK.
NAIA is considered the international gateway of
the Philippines for air transportation. CLARK
was formerly the largest US airbase outside of
American soil. A total of 2,200 hectares is
allocated for civil aviation.
7. METHODOLOGY
7.1 Primary Data Gathering
The study includes survey-interview of
departing international passengers at NAIA.
The survey is entitled International Passenger
Survey at NAIA and is conducted from
November 6 to16, 1997.

Four infrastructure development scenarios are

presented in this study. These are: (1) donothing scenario; (2) developing NAIA only; (3)
developing CLARK only; (4) developing NAIA
and CLARK simultaneously.
7.3 Mathematical Modeling
The study aims to model passengers airport
choice based on their preferred LOS of airports.
This modeling reinforces the scenario-building
component. In addition, desired levels of service
are considered in drawing conclusions and
recommendations. It is important to note that
modeling process is useful as a planning tool, in
identifying significant
characteristics
of
passengers and their trips.

Sampling Procedure and Size

The study utilizes discrete modeling approach.

A measurement of stated preference of
passenger airport choices was included in the
survey instrument. Passengers have ranked
simulated airports with different LOS, in terms
of access, time and frequency of flight.

Prospective respondents were selected as

random a possible. Limiting circumstances
eliminate most probability random schemes.
Thus, the procedure used is considered
convenience sampling.
There are 1,104
accomplished questionnaires. There were some
limitations namely: (1) airport regulation of
restricting surveyors in the departure lobby; and
(2) language of the survey instrument which was
written in English therefore non-English

Passengers ranking of airports served as the

dependent variable to predict choice airport
(with a certain LOS). That is, the probability
that an airport with a certain LOS will be chosen
is a function of the perceived utility of the four
simulated airports, characteristics of the trip, and
socio-economic characteristics of the individual.
The variables access time to the airport and
frequency of flights are used to measure LOS in
this study. Characteristics of trips include major

trip purpose, length of complete trip, actual

access time to the airport and actual access cost
to the airport, present trip such as trip purpose,
length of complete trip, access time to the
airport, and access cost to the airport. Socioeconomic characteristics such a gender, age,
occupation, annual income, and nationality are
considered.
The dependent variable, ranking of airports, is
ordinal in nature. Thus, the categorical data
modeling (VATMOD) procedure in SAS is very
appropriate to use. Logistic analysis is the
specific statistical test used for model
estimations. Cumulative logits consider the
ordinal nature of the dependent variable.
Variables with highest R square, and lowest
levels of significance are used in the final model.
Mathematical modeling has two main streams
model calibration and model estimation. Model
calibration selects independent variables with
strong effect on the dependent variables,
passengers airport choice. Model estimation
approximates the coefficients of reliable
variables.
This study focuses only on model calibration.
Selection of variables with strong influence to
passengers airport choice requires a lot of time.
Previous studies do not offer much help due to
dearth of literature and modeling on airport
choice in the Philippines. Thus, various
independent variables need to be tested on a
mathematical model to see their significance.
Preliminary procedures in SAS are used to
facilitate calibration. Procedures and selections
like FREQ (frequency count, TABLE (crossclassification), COLLIN (co linearity), and
CORR (correlation) were ran repeatedly to
select reliable variables.
Furthermore, model calibration approximates
critical values for access time and frequency as
perceived by passengers is utilized in building
scenarios and formulating of the policy
recommendations. The stated LOS of the
simulated airports, specifically the access time is
compared to the actual access time of the
respondents.
8. CONCLUSIONS
Passengers in NAIA are mostly male Asians
with ages from 30-39 years. They work as
company employees with an annual income of
less than US$10,000. Foreign passengers are
largely visiting friends and relatives while
Filipino passenger trip purpose is mainly

OCW. Overseas Filipino workers dominate the

Filipino data set, which skews observations in
many categories. Excluding the OCW
phenomenon, foreign and Filipino passengers
have similar patterns of socio-economic
characteristics and major trip purposes.
Most of the travelers are Asian due to the
number of Filipino passengers. Excluding
Filipinos, the passengers are largely European
travelers on business. North American
passengers who are visiting friends and relatives
follow this group. For Asia-Pacific region, the
passengers are largely from South Pacific. Most
of the regions travelers are on business. The
biggest group is Southeast Asian travelers on
business. It is important to note, however, that
the sample has potential bias against nonEnglish speaking countries like Japan, China,
and others.
The Middle East region is the principal
destination point of Filipino travelers. This is of
course, a pattern of OCW passengers. Hong
Kong is the most single country destination
point of Filipino passengers with the highest
count.
The mean average of actual access time to
NAIA is 121 minutes for QA and 124 minutes
for QB. There is a difference on the modal
average. The frequency distribution tables,
however, are not independent. This means that
respondents from both QA and WB are drawn
from the same population.
The mean average of actual access cost to NAIA
is PhP843 for QA and PhP891 for QB. The
grouped modal average of access cost for both
questionnaires is less than PHP 100. Again, tests
of independence reveal that respondents of the
two questionnaires are from one population.
Ranking patterns for both QA and QB are
investigated in this study. The respondents from
both questionnaires highly rank airports with
shorter access time, even if these airports have
lesser frequencies of flights. Chi-square tests of
independence show that respondents are drawn
from the same population.
Data profiles, characteristics of trips and
passengers ranking patterns for QA and QB are
considered in building four infrastructure
development scenarios. These scenarios are: (1)
do-nothing scenario, (2) developing NAIA only,
(3) developing CLARK only, and (4)
developing, simultaneously, both CLARK and
NAIA.

Passengers prefer airports with shorter access

time than airports with higher frequency of
flights. This stated preference implies that the
perceived utility of landside component is higher
than that of airside component. Thus, LOS of
airports in terms of access time is a principal
consideration in planning and infrastructure
development.
The NAIA has been and will remain the
dominant international gateway of the
Philippines in the short, medium to immediate
long term that is three to fifteen years. Airside
and landside congestion is expected to worsen
by 2003.
The potentials of Clark International Airport
remain underutilized. Major infrastructure in
CLARK is at par with major international
airports in the world.
Major landside
infrastructure and airside support facilities and
equipment however, are lacking in CLARK.
There are many infrastructure development
scenarios available for NAIA and CLARK.
Capital-intensive
investments
on
this
infrastructure should aggressively tap the private
sector.
9. RECOMMENDATIONS
9.1 Policy Recommendations
This
study
recommends
simultaneous
development of NAIA and CLARK. This
development option entails duplication of some
investments, functions, and competition for
market share. Some general policies from the
two airport corporations and the national
government are needed to induce these
duplication and competition towards the positive
side. This study offers two major policy
recommendations. These are bilateral planning
and market identification.
Bilateral planning may be in the form of joint
sessions.
Infrastructure development and
financial strategies are important matters that
could be discussed. Market identification and
marketing strategy-formulation are also crucial.
NAIAs corporation, MIAA, should also assist
in upgrading the skills of CLARKSs personnel
in the initial stage.
Market identification involves specialization to
some particular groups in the market. Business
trips, for example, should be the priority of
NAIA. CLARK could serve OCW who come
from the provinces by air. Both airports,

depending on destination points, could serve

sightseeing and recreation trips.
9.2 Recommendation for Further Study
Further studies on the following topics could be
pursued:
a. A study that involves model estimation of
specific variables is a good continuation of
this study.
b. Developing models for foreign and Filipino
passengers is also recommended.
c. A study on the rest of the international
airports in the Philippines and their
interactions.
d. Inter-relationships of international and
domestic passenger movements.
e. Airfreight movement, and the interaction of
international
and
domestic
freight
movement.
f. Destination pattern in the Philippines of
foreign passengers.
g. Origin pastern of OCW that would greatly
help in market identification and tourism.
REFERENCES
1. Agresti, Alan (1984) Analysis of Ordinal
Categorical Data, University of Florida.
2. Air Transport Action Group (1997)
Asia/Pacific Air Traffic Growth and
Constraints, Air Transport Action Group.
3. CMC (1997) Northrail to Use Standard
Gauge for Better Train Speed, In Business
World Vol. XI No.30 Philippines. Business
World Publishing Corporation.
4. Department
of
Transportation
and
Communications (1997) Civil Aviation
Master Plan, Volumes 1 and 2.