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House now eyes even higher tax for vapers

By Charmaine A. Tadalan
Reporter

THE HOUSE of Representatives Ways and Means committee is looking at imposing even higher excise tax rates on vapor and heated tobacco products in response to President Rodrigo R. Duterte’s order last Tuesday to ban their importation and use in public.

“… [G]iven the logic of the initial reported ban — precautionary principle — we might as well go for a higher rate than P25-45/ml,” Committee Chairman and Albay-2nd District Rep. Jose Ma. Clemente S. Salceda told reporters in a mobile phone message.

Mr. Salceda on Wednesday said the committee was to propose exclusion of vapor and heated tobacco products from higher taxes as they are already taxed under Republic Act No. 11346, which translates to about P1.4 billion in foregone revenues.

“The 1 (million) vape users are almost totally upper-middle to high-income class versus the 23 (million) smokers, with 7 (million) in the lowest 50%. The entry cost to vaping is relatively high at P1,600,” Mr. Salceda said.

The law, enacted on July 25, will gradually raise excise tax rates on tobacco products to P60 per pack by 2023 from P35 currently and introduced a P10 per pack rate on heated tobacco products (HTPs) in 2020. It also introduced the following rates on vapor products: P10 for 10 milliliter vapor products, P20 for 20 ml, P30 for 30 ml, P40 for 40 ml, P50 for 50 ml and so on.

House Bill No. 1026, approved on Aug. 20, seeks to impose rates on HTPs similar to those of regular tobacco products. It also proposed to increase excise tax rates on vapor products with nicotine salt to P30 per milliliter beginning 2020 and by P5 annually until it reaches P45/ml in 2023.

It provided a much lower rate on vape products with conventional nicotine at P4.50/ml in 2020; P5/ml in 2021; P5.50/ml in 2022; and P6/ml in 2023.

His counterpart, Senator Pia S. Cayetano on Thursday discussed her committee’s proposal to tax said products, even as she agrees with their total ban.

“I just have to push through with my part of the job. My job is to pass the taxation measure, whether or not there’s an EO (executive order) that comes out. If something comes out, whether it’s a total ban, I have to be ready,” Ms. Cayetano told reporters.

“This taxation has to be more or less of permanent nature. Pa’no kung temporary lang ‘yung ban tapos walang tax measure in place? (What if the ban were temporary and there is no tax measure in place when it ends?)”

Senate Bill No. 1074, meanwhile, proposed to increase rates on HTPs to P45 per pack in 2020 and by P5 every year until it reaches P60 in 2023. The same rates will be imposed on vapor products, whether they use nicotine salt or conventional nicotine. The bill now awaits approval of the proposed P4.1-trillion national budget for 2020 before it progresses in plenary.

Ms. Cayetano said she is in constant communication with other Senators and has relayed the request of the Department of Finance for them to approve the said measure, which Malacañang has certified as urgent, before the year ends.

The measure will partially fund implementation of Republic Act No. 11223, or the Universal Health Care Act (UHC), starting next year.

Health Secretary Francisco H. Duque III told reporters that the ban on these products will not have an impact on universal health care funding.

“There’s a very insignificant relationship between banning vapes and the funding for UHC. Why? Because the market of e-cigarettes and vapes is very small. It’s miniscule. That’s why it’s good that if it’s going to be banned now, habang kokonti pa, hindi pa maramdaman yung kanyang tax impact(while the market is still small, the tax impact will be negligible),” Mr. Duque said.

“At this point, I support the move to ban it while it hasn’t really had a much bigger share of the market.”

Ms. Cayetano said she will push for another measure to regulate use of e-cigarettes and vapor products.

“Taxation is just a means, a tool to help make these products that are harmful less accessible to the vulnerable, especially the youth,” she said.

“Pero meron din akong draft bill to regulate vaping and e-cigarettes, etc., na ready akong isalang at i-defend as soon as mapasa ko na ‘tong taxation portion (But I also have a draft bill to regulate vaping and e-cigarettes… I am ready to file the bill and defend it as soon as this taxation portion is approved).”

Among others, Ms. Cayetano is considering prohibition of the sale of e-cigarettes, heated tobacco and vapor products to people under the age of 25 years as well as a ban on or limits to advertisement space for said products and designation of select points-of-sale. — with Gillian M. Cortez

Foreign chambers push requirements for power, tourism, farm dev’t

FOREIGN business chambers in their eighth annual forum on Thursday outlined their recommendations for improvements in the country’s tourism, agribusiness and power sectors.

For the power sector, recommendations include resolving issues such as the high cost of power in the country, slow rollout of retail electricity competition and the government’s plan to adopt nuclear power.

“I think the most important is to ensure that we have power for everybody because the most expensive one is the one you don’t have. We need to have a proper plan,” Nabil Francis, president of the European Chamber of Commerce of the Philippines, said in an interview at the sidelines of the Joint Foreign Chambers of Commerce of the Philippines’ (JFC) The Arangkada Philippines Forum 2019 at the Manila Marriott Hotel.

Noting that “[t]his country is a fantastic engine for growth,” Mr. Francis, who is president and chief executive officer of Republic Cement Services, Inc., said: “Just the demography shows that there’s gonna be a huge increase in terms of power consumption — almost two percent growth per year of the population.”

For American Chamber of Commerce of the Philippines, Inc. Senior Adviser John D. Forbes, “[t]he process, the gestation period” for approving new baseload plants “is very long.”

“There should be new ones under construction now,” Mr. Forbes said in a separate interview, noting that a number of such projects in the pipeline “are too-long delayed,” while “…the number of yellow and red alerts is quite high so we’re watching out for power shortages in the future.”

Keiichi Matsunaga, president of the Japanese Chamber of Commerce and Industry of the Philippines, said the high cost of power is a concern even if this is offset by low labor cost. “We need government’s strong initiative to reduce the cost because the price of power per kilowatt-hour is very similar to Japanese price,” said Mr. Matsunaga, who is also general manager of the Manila branch of Mitsubishi Corp., even as he said that Japanese investors in the Philippines are more concerned with the tax regime and labor cost.

Among others, while the chambers said in their recommendations that “[a] regulatory framework for nuclear power generation is needed to consider its use” and “[a] solid framework serves as a decision point on whether or not to utilize nuclear technology,” Mr. Francis said the country’s nuclear aspirations should be “carefully studied.”

The JFC also proposed a well-studied capacity and reserve planning program and effective outage management. It called on government to eliminate regulatory risk for exploration and production of indigenous sources of energy, stimulate the adoption of e-vehicles, among others.

JFC’s recommendations for tourism focus on sustainable tourism and seamless travel through better infrastructure. Mr. Forbes said the government should make sure that “we don’t have such a large number of tourists in certain attractive destinations that are more than the destinations can handle… [while] at the same time increasing the volume of tourists.”

Agribusiness recommendations focused on financing, infrastructure and raising productivity, including inclusive financing for small farmers and fisherfolk as well as expanded private sector investments in post-harvest facilities, cold storage, and food terminals. The JFC also pushed for more public investment in farm-to-market roads, bridges and irrigation systems. — Jenina P. Ibañez and Victor V. Saulon

Inflation’s impact on low-income households eases further in October, slowest in 4 years

INFLATION, as experienced by low-income families, eased to its slowest pace in four years in October, the Philippine Statistics Authority reported on Thursday.

The inflation rate for the country’s bottom 30% income households clocked in at 0.8% in October, slower than the year-on-year overall increases of 0.9% in September and 9.5% in October 2018.

The latest reading for the bottom 30% inflation marked the slowest clip in four years or since October 2015’s 0.4%.

Year to date, the inflation for this income segment averaged 3.6%, slower than the seven-percent average in 2018’s comparable months last year.

This compares with the 0.8% headline inflation experienced by the average Filipino household in October that was slower than September’s 0.9% and 6.7% in October 2018.

The PSA uses the 2012 base year in computing the headline consumer price index (CPI), while the bottom 30% income households’ CPI uses 2000 prices.

Moreover, the CPI for the bottom 30% income segment of the population reconfigures the model basket of goods in order to make it more representative of the consumption patterns of the poor. For instance, food accounts for 75% of the theoretical basket of goods used by a poor household compared to an average household’s 35.5%.

Inflation in the food, beverages and tobacco index was 0.6% in October, lower than the 0.7% in September. Inflation likewise cooled in services at 2.8% from three percent the previous month.

Meanwhile, inflation steadied in clothing (2.8%), housing and repairs (3.5%), and miscellaneous items (2.2%).

On the other hand, the fuel, light and water index declined 0.7%, compared to September’s year-on-year 0.4% contraction. The food-alone index also declined 0.6% from 0.3% contraction previously.

“It looks like this particular CPI data has been tracking the headline number. The big mover in this economic segment is basically the food and non-alcoholic beverages index, parallel to the national CPI,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in an e-mail. “Rice prices and other food items are critical to the movement of this specific population segment and has basically caused the continuing decline.”

For University of Asia and the Pacific Associate Professor Peter Lee U, easing food prices would explain the inflation downtrend for the bottom 30% income segment. “Partly, it may be that the decline is because we are coming from a high base. TRAIN may have pushed prices higher last year, so that this year’s prices look low by comparison,” Mr. U said, referring to Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Act, which slashed personal income tax rates but also introduced additional levies on consumer goods such as fuel, cars and sugar-sweetened drinks.

To recall, inflation for the bottom 30% averaged 7.2% in 2018, reaching as high as 9.5% in September and October last year.

For UnionBank’s Mr. Asuncion, inflation for that income segment can be “expected to have slightly higher annual percentage increases” in the coming months due to “seasonal factors” as well as the impact of the African Swine Fever on pork and alternative meat. — Genshen L. Espedido

Inflation for low-income households eases further in October (2019)

Inflation for low-income households eases further in October (2019)

INFLATION, as experienced by low-income families, eased to its slowest pace in four years in October, the Philippine Statistics Authority reported on Thursday. Read the full story.

Inflation for low-income households eases further in October (2019)

Frozen II is set to heat up a box office in need of hits

WALT DISNEY CO. looks to have another hit on its hands with Frozen II, the sequel to the 2013 film that became the top-grossing animated picture of all time.

Disney expects the movie, which hits theaters in North America on Friday, to generate opening-weekend sales of about $100 million in the US and Canada. Outside forecasters see more, with Exhibitor Relations projecting $113 million and Box Office Pro at $130 million.

Those numbers would put the film squarely in hit territory, though Frozen II isn’t likely to break all-time records for an animated film. Incredibles 2, released last year by Disney, generated $182.7 million in its opening weekend, for example.

Topping the original 2013 film’s worldwide gross of $1.29 billion may also be a stretch. That picture became a cultural phenomenon — with frantic parents searching to find replicas of Elsa’s signature blue dress for their daughters and kids belting out the hit song “Let It Go” in endless YouTube videos.

David Miller, an analyst with Imperial Capital, predicts the movie will gross $970 million worldwide, less than the original. Many of the kids who saw the first film have reached an age at which they’ll be less likely to see an animated princess picture, he said.

In the new film, original stars Idina Menzel and Kristen Bell reprise their roles as the snow-crossed Nordic sisters. Chris Buck and Jennifer Lee also returned to direct the screenplay, which was written by Lee. And the husband and wife composing duo of Kristen Anderson-Lopez and Robert Lopez are back with seven new songs.

AWARD WINNER
The first film captured two Academy Awards — for best animated picture and best original song. It also cemented a renaissance for Disney animation after a long run of disappointments in the 2000s.

Disney is delivering a big marketing push for the sequel, peddling white chocolate cupcakes at the Norway pavilion at the company’s Epcot theme park, along with backpacks, dolls, and “Raised by Trolls” T-shirts.

Both Box Office Pro and Exhibitor Relations predict the film will be among the biggest hits this year. Their forecasts for total domestic sales range from $415 million to as much as $520 million. Budgets for Disney animated films typically approach $200 million.

Theater owners could use the help. Domestic ticket sales for the year to date are down 6.2%.

ALL FILMS YEAR TO DATE
Menzel and Bell received stars on Hollywood’s Walk of Fame on Tuesday. In the film, the pair once again must face their demons as Elsa copes with her magical power and Anna her habit of wandering into trouble.

“If Frozen was happily ever after,” Lee, the screenwriter, said in press notes for the film, “then Frozen II is the day after happily ever after.” — Bloomberg

Mom makes the decisions on online purchases — survey

THE FILIPINO digital mom makes “the biggest purchase decisions in the household,” relies on social media for parenting tips, and goes online after the children are asleep, according to the results of the 2019 Digital Moms Survey by Singapore-based community app, theAsianparent.

“Only 10% of moms today ask advice from friends and family. They go online now,” Carla Perlas, Asianparent regional head of content, said during the survey launch on Nov. 13 at the Shangri-La at the Fort hotel in Bonifacio Global City, Taguig.

“They want to know, ‘Hey moms, did you experience this?’ We get a lot of questions [like that] on the app,” she added.

The survey was conducted in September and included 1,038 responses from Filipino users of the app.

The app also conducts the same survey in several markets like Singapore and Indonesia annually.

The survey showed that most of the app’s active users are 21 to 30 years old (65%) and almost half have one child (45.13%).

Eighty-five percent of the respondents said they make the biggest purchasing decisions in their household, especially when it’s for the children.

“One of the key drivers of purchasing the product is knowing the benefits and use of the product,” the survey said.

Most mothers using the app are college-educated (65.2%) and while a third work full-time, over half are stay-at-home mothers (55.73%).

They are also digital-savvy, according to the survey, with 31% of respondents saying that their screen time has increased by four hours since becoming a mother. And while they are sporadically online most of the day, more mothers (28.08%) find themselves online the most after 9 p.m., presumably her children’s bedtime.

“Fifty-three percent of moms said they only watch TV once in a while now. So it’s really the internet, that’s where they go,” Ms. Perlas said.

While online, a third said they log on to social media sites like Facebook while 28% said they visit parenting sites and 16% said they shop online.

“She wants to get advice and recommendations, and she wants to engage with other moms,” said Ms. Perlas, before explaining that some want to brag about their children or to vent.

Inside their shopping carts are baby essentials like diapers (48%), clothes (20%), and milk/formula (15%). Most mothers still prefer doing their shopping in physical stores (57%), especially for baby essentials (70%) but a considerable percentage of their shopping is now done online with 43% shopping online for general items and 30% shopping specifically for baby items.

Despite the growing percentage of online shopping, the survey showed that most respondents still prefer paying cash for their purchases (75%) over cashless alternatives.

“She is still an experiential shopper… [they] have lots of questions and [they] want to be able to ask the store manager and get answers,” Ms. Perlas said.

“She has to thrifty… because she really has to budget the income they have,” she added before explaining that 53% of respondents said the family earns about 30,000 a month. — Zsarlene B. Chua

Lizzo, Billie Eilish and Lil Nas X dominate Grammy nods

POP NEWCOMERS Lizzo, Billie Eilish, and country rapper Lil Nas X dominated Grammy nominations on Wednesday in a list for the highest awards in the music industry that favored diversity and women over established stars like Taylor Swift, Ed Sheeran, and Madonna.

Lizzo, the body-positive “Truth Hurts” and “Juice” singer, scored a leading eight nods, including in the top categories of album and record of the year and best new artist.

“Thank you,” tweeted Lizzo. “This has been an incredible year for music and I’m just so thankful to even be a part of it.”

Eilish, the 17-year-old Los Angeles “Bad Guy” alt-pop sensation, got six nods, along with black, gay country rapper Lil Nas X, 20, whose catchy “Old Town Road” with Billy Ray Cyrus topped the Billboard singles charts for a record 19 weeks this year.

The trio will compete in the album of the year race with indie band Bon Iver, pop-rocker Lana del Rey, pop singer Ariana Grande, rockers Vampire Weekend and R&B artist H.E.R.

Grande, 26, got five nominations, including for her hit “7 Rings.”

“Crying. moved and honored,” tweeted Grande. “The acknowledgement is truly enough on its own for me and my heart,” she added.

Beyoncé scored four, mostly for the songs she wrote for the new version of animated film The Lion King and for the Homecoming concert film of her 2018 Coachella show.

Five of the eight album of the year nominees were women and four female artists will compete for record of the year, injecting new life into the Grammy Awards which has a tradition of rewarding the same artists.

Deborah Dugan, the new chief executive of the Recording Academy whose members select the nominees and winners, said the nominations marked a new era for the organization that “welcomes diversity, embraces creativity and champions young musicians on the rise.”

That meant that 10-time Grammy winner Swift, whose new album Lover is one of the year’s biggest sellers, was omitted for a second straight year from the album and record of the year categories, along with British singer-songwriter Ed Sheeran.

Swift got three nods — song of the year for “Lover,” best pop vocal album, and pop solo performance.

Other acts snubbed by the Grammys included K-Pop band BTS, which has a huge following in the United States but got no nominations on Wednesday; seven-time Grammy winner Madonna, currently on tour to promote her new album Madame X; Bruce Springsteen, whose album Western Stars was well reviewed; the newly re-united Jonas Brothers who got just one nod, for single “Sucker”; and British singers Sam Smith and Lewis Capaldi.

The Grammy Awards will be handed out in Los Angeles on Jan. 26 in a ceremony hosted by Alicia Keys. — Reuters

Tiu-led firm proposes Manila tramway

By Denise A. Valdez, Reporter

BUSINESSMAN Antonio L. Tiu is seeking to build a tramway in Manila City, as his Greenergy Holdings, Inc. submitted an unsolicited proposal to the local government.

The listed firm told the stock exchange yesterday it has given an unsolicited offer to the Manila City local government “for the financing, development, implementation and operation of a modern tramway system within the City of Manila.”

In a text message to BusinessWorld, Mr. Tiu said the project is sought to be a joint venture (JV) with the local government of Manila and will be pursued with foreign partners. He said other details are “to follow.”

This is similar to the setup for the $3.5-billion Makati City Subway Project. Mr. Tiu’s other company, Philippine Infradev Holdings, Inc., is developing the subway through a JV with the local government of Makati City.

Asked what’s driving his interest in transportation projects, Mr. Tiu said he wants to “(help) solve our country’s problem the private sector way,” adding he will “keep trying” to pursue more projects in the future.

The Makati City Subway of Philippine Infradev, which will traverse the central business district of Makati, is targeted to be operational by 2025. It is being pursued with Chinese partners Greenland Holdings Group, Jiangsu Provincial Construction Group Co. Ltd., Holdings Ltd. and China Harbour Engineering Company Ltd.

Meanwhile, Philippine Infradev reported it swung to a profit in the third quarter on the back of a fair value gain on its property in Binangonan, Rizal.

In a regulatory filing submitted to the stock exchange last week, the company said its net income in the July to September period stood at P2.27 billion, a turnaround from last year’s net loss of P21.45 million.

Revenues during the three months shot up to P3.26 billion from P22.33 million in the same period last year, where the P3.26 billion came from a fair value gain in its investment property in Rizal.

“The significant increase of P3.18 billion in total revenue was mainly due to the increase in the estimated market value of the company’s property in Binangonan from P1,200 to P1,742,” Philippine Infradev said in the filing.

Net sales from the company’s real estate business added P2.85 million to the revenue pie, an 88% decline from last year. This represents the company’s ongoing housing projects in Binangonan.

Lower costs and expenses during the quarter, which stood at P20.78 million, or a 54% contraction from last year, helped pull up the bottom line to end at a profit.

For the nine-month period, Philippine Infradev’s net income surged to P2.27 billion from P4.3 million a year ago. Revenues improved to P3.32 billion from last year’s P143.04 million, reflecting the fair value gain recorded in the third quarter.

Expenses during the nine months dropped 41% to P78.15 million, helping further in pulling up the company’s net income.

Shares in Philippine Infradev at the stock exchange slipped 0.04 point or 2.94% to P1.32 each on Thursday, while shares in Greenergy Holdings dipped 0.04 point or 1.94% to P2.02 apiece.

Hotel association warns service charge law may force employee cuts

THE Philippine Hotel Owners Association, Inc. (PHOAI) said it opposes the new legal requirement to equally distribute the service charge collected by hotels and restaurants among all employees and remove the share collected by hotel management, noting that the rules could force the industry to reduce staffing.

PHOAI President Arthur M. Lopez also told reporters after a forum Thursday that hotels, which collect 15% of the service charge, use the fee to cover pilferage and breakage.

Republic Act No. 11360, signed in August, would give rank-and-file employees 100% of the service charge while removing the share given to managerial employees. The Implementing Rules and Regulations for the law were issued this month.

Mr. Lopez said that removing the managers’ share might result in some managers receiving less money than the people they supervise.

“We also give a share to some managers. If we don’t, there might be a distortion in the salary structure.”

Service charges, he said, make up 10% of hotel sales, which then use their 15% to cover various losses.

“It is big money for the investors. It happened all of a sudden without warning,” he said.

Mr. Lopez said that hotels do not want to adjust rates to offset the loss in service charge money as doing so “might scare away tourists.”

“We have to reduce a number of people. We have to reduce cost,” he said, noting that tourism investors considering the Philippines may have second thoughts.

He said that the hotel industry currently employs 2 million people. Mr. Lopez added that workers receive around P30,000 a month in service charges in addition to their salary. — Jenina P. Ibañez

Hollywood group launches largest-ever survey on sexual harassment

TWO YEARS after the #MeToo scandal first roiled Hollywood, causing dozens of powerful men to lose their jobs, a new group on Wednesday launched what it said was the largest-ever industry-wide survey aimed at countering sexual misconduct in the entertainment industry.

The Hollywood Commission on Eliminating Sexual Harassment and Advancing Equality said the survey was open to anyone who “has worked or tried to work in any area of entertainment.”

The commission is chaired by Anita Hill, the law professor who became an icon for the movement against sexual harassment when she accused nominated Supreme Court Justice Clarence Thomas of sexual harassment in 1991. Thomas denied her accusations.

The survey, which will be completed anonymously and online, will be used to develop policies to counter workplace harassment and bias, the commission said. A summary of findings will be released in early 2020.

“What we need to get our arms around, if we’re going to come up with effective solutions, is reliable data that reveals the specific nature and actual extent of those problems as well as the cultural environment that enables and hides them,” Hill said in a statement.

Several Hollywood labor unions and the Academy of Motion Pictures, which organizes the Oscars, have already come up with guidelines aimed at tackling sexual misconduct. These include hotlines for complaints, restrictions on holding meetings and auditions in hotels and private offices, and encouraging people to report harassment.

The Hollywood Commission, whose members include film and TV studios and talent agencies, said its survey would be open to everyone from actors and dancers to wardrobe stylists and PR agencies, making it “the largest attempt at gathering this essential data.” — Reuters

#MeToo drove rise in CEO firings in 2018: report

THE NUMBER of corporate leaders fired for #MeToo-related misconduct rose in 2018 while the number of S&P 500 companies led by females fell 20%, according to a report from US think-tank the Conference Board.

Firings of S&P chief executive officers related to the social media movement accounted for five of 12 dismissals last year, according to the report, published on Wednesday. In contrast, just one CEO was dismissed for personal misconduct between 2013 and 2017, it said.

The percentage of departures which were non-voluntary rose 8 percentage points from 2017 to 30.5%, the report added.

It also showed the number of women CEOs falling to 22 from a record 27 in 2017. Last year, Kathy Warden of Northrop Grumman was the only woman appointed to a top job.

Scrutiny of executives and their treatment of employees has intensified in light of the #MeToo movement, which has spurred more scrutiny of top managers’ relationships with employees.

The Conference Board said that departing executives had also tended to serve longer in their roles before leaving. In 2018, outgoing CEOs had been in their roles for an average of 10 years, compared to a low of 7 years during the financial crisis.

“The rate of succession among older chief executives continues to climb, and there are still more CEOs aged 75 and over than there are CEOs under the age of 45,” said Matteo Tonello, the principal author of the report, who oversees the think tank’s environmental, social, and governance research. — Reuters

AirAsia PHL looking to acquire A321neo

By Arjay L. Balinbin, Reporter

HAMBURG, Germany — Philippines AirAsia, Inc. is looking to acquire an Airbus A321neo, an aircraft designed to reduce fuel consumption by 20% and accommodate more passengers.

This announcement comes after Malaysia-based AirAsia Group Berhad received its first of 353 A321neos ordered from Airbus at a delivery ceremony here on Wednesday.

Philippines AirAsia Chief Executive Officer Ricky P. Isla said the low-cost carrier is currently in the process of “concretizing plans to purchase an A321neo” from Airbus.

“We continue to achieve our operational goals with our existing 24 A320s. Investing in newer additional aircraft will be advantageous for any airline in a slot-constrained environment,” he told reporters here.

AirAsia Group will initially use the new A321neo for flights from Kuala Lumpur to two domestic destinations such as Kuching and Kota Kinabalu and three international flights to Singapore, Bangkok, and Shenzhen.

Mr. Isla noted that the A321neo, which has 50 more seats compared to the previous A320neo, provides “opportunities to offer even lower fares to flying guests.”

“Eventually, majority of our aircraft will be A321neos and this is across the whole fleet,” AirAsia Group Aircraft Planning & Evaluation Head Matthew Glaus told reporters on Tuesday.

Limited airport slots, particularly in Manila’s Ninoy Aquino International Airport, are a consideration in tapping these A321neos.

“So any airport that’s suffering today, it’s gonna have an opportunity to see A321neos… Another thing, we see strong demand in terms of passengers. Eventually, the standard will be the A321neo aircraft across our fleet including the Philippines,” Mr. Glaus said.

In his speech during the delivery ceremony on Wednesday, A320 Family Programme Head Michael Menking of Airbus said: “Following the first A321neo, more deliveries to AirAsia will begin and it will continue for quite some time as the airline has ordered a total of 353 A321neo aircraft.”

He noted that the A321neo is a response to the “ongoing strong demand” across AirAsia’s network and “to open up new routes, enabling more people to fly further at a lower cost than ever before.”

AirAsia Indonesia Chief Executive Officer Veranita Yosephine said the A321neos will allow the company to grow further and become the largest low-cost carrier in Asia.

“I’m looking forward to how the A321neo can contribute to our expansion network in Indonesia,” she added.

Airbus said in a statement that the A321neo has “over 20%” less fuel consumption per seat compared to the previous generation A320neo. It also has a maximum flight range of 5.5 hours, or an hour higher than A320neo’s, which means that new destinations can be explored across Southeast Asia and beyond.

Other features of the A321neo include lightweight and slimline seats with a mobile phone or tablet holder; three rows with a seat pitch of 37” or above; three additional rows of hot seats rows; USB in-seat power in every seat; and Rokki WiFi providing entertainment, shopping, and internet speed up to 10MB/s.

Airbus said further that the A320 family received a total of 7,000 orders from at least 110 company customers globally as of end of October 2019.

AirAsia’s current fleet consists of 194 A320CEOs (68 fitted with Sharklets), 40 A320Neos, 36 A330s, and two A330Neos. It has backlog of 13 A320Neos, 352 A321Neos, 30 A321XLRs, and 78 A330Neos.

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