Indian airlines are expanding their presence in the Philippines to capture rising tourism demand following the introduction of visa-free entry for Indian nationals. While IndiGo has applied for a flight permit with a hearing set for September 2026, Air India is already operating on the route. Investors should track how this expansion impacts operational costs, as carriers face potential pressure from jet fuel prices and currency fluctuations.
Indian aviation companies are stepping up their presence in the Philippines as passenger demand between the two nations grows. IndiGo, operated by InterGlobe Aviation Ltd., has applied for a permit to start flights to the Philippines, with a public hearing scheduled for September 16, 2026. This move follows the successful start of Air India’s direct Delhi-Manila service in late 2025, which helped connect the two markets more efficiently for the first time in many years.
Expanding Network in Southeast Asia
The expansion is largely driven by a policy change that allows Indian nationals to enter the Philippines visa-free, a decision made in 2025. This has led to a noticeable increase in Indian tourists visiting the country, prompting airlines to recalibrate their international networks. To take advantage of this, other players are also adjusting their plans. Philippine Airlines has also submitted a petition, filed in June 2026, seeking to resume direct flights to India. This is supported by the current air services agreement between the two countries, which allows for up to 28 flights per week.
Risks and Investor Monitorables
For investors, this expansion is a mix of growth opportunity and operational risk. Airlines expanding their international networks often need to spend significant capital on new, fuel-efficient aircraft to make long-haul routes profitable. However, the aviation industry faces persistent pressure from volatile jet fuel prices and the fluctuation of the rupee against the U.S. dollar. These factors can impact profit margins, even if passenger demand remains high.
Looking ahead, the primary focus for market observers will be the outcome of the permit hearing in mid-September. Beyond regulatory approvals, investors will also track the impact of these new routes on the airlines' overall profitability, keeping a close eye on whether they can maintain steady passenger load factors while managing the costs associated with international expansion and competition.