Almost grounded across the board! Philippine AirAsia last-minute agreement to pay 1.14 billion debt

Philippine AirAsia (PAA) has avoided a full grounding situation during the upcoming Christmas holidays or peak travel season after agreeing to pay a 1.14 billion peso debt to the Philippine Civil Aviation Authority (CAAP).

Eric Apolonio, a spokesman for the Philippine Civil Aviation Administration, said that Philippine AirAsia settled its air navigation fees and franchise fees before the deadline of 12 o'clock on Friday.

In the request letter of December 15, Manuel Antonio Tamayo, head of the Philippine Civil Aviation Administration, ordered AirAsia to pay off its debts, which also included domestic passenger service fees or airport terminal fees. If the payment is not made, the regulator will suspend all routes of Philippine Airlines and will start with a flight to Puerto Princesa airport on Palawan Island on December 16.

Department of Transportation (DOTr) Minister Jaime J. Bautista said: "Other aviation divisions are facing the same challenge, but they readily promised to pay the fee and provided us with a payment schedule. As for AirAsia, we are willing to sit down and negotiate with them as long as we see their commitment to pay these arrears."

Philippine AirAsia confirmed that it had reached an agreement with the Civil Aviation Authority on payment terms for the outstanding debt, promising that operations would not be affected. The budget carrier said that despite the recent recovery in air travel, it was also adversely affected by the grounding of flights over the past few years.