The Civil Aviation Authority (CAA) of the Philippines has given Philippines AirAsia a notice to pay its $14 million debt by March 28. The business outlet InsiderPH has reported that the airline still has outstanding government charges to pay.
CAA Philippines calls for debt repayment from AirAsia
The regulator issued final demands on March 23, with a non-extendable five-day deadline. This is to cover the unpaid landing and parking fees that the airline has incurred over the years. This also includes air navigation fees and an increment of unpaid passenger service fees that were not collected from travellers.
Amid this news, Philippine Airlines, AirAsia’s competitor, has entered into a new extended contract with Airbus FHS.
The CAA confirmed that this was part of its “regular business processes” as the country’s aviation regulatory body. The regulatory body warned that if there is continued non-compliance, this will then trigger sanctions that could lead to suspension or changes in renewals of licences and permits. This, in turn, will also revoke any access to CAA facilities, and civil and criminal proceedings may be pursued.
AirAsia’s failure to pay off debt will lead to legal action
The notice came after continuous reconciliation meetings, follow-ups, and prior knowledge of the escalation of this case. CAA noted that the persistence of the non-payments is a serious concern and can indicate further potential for passenger disruptions ahead of the religious holiday period. Philippines AirAsia in Dec. 2022 avoided an initial operational shutdown after partially settling a $19.1 million liability before a regulatory deadline.
Philippines AirAsia is the country’s low-cost air carrier, currently holding a three-star rating and recognised as one of the leading low-cost carriers in the Philippines. Although they have 24 A320-200s, nine of those are currently inactive.
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