The Royal Air Philippines liquidation brought an abrupt end to more than two decades of commercial flying, with the Manila-based carrier cancelling every scheduled service on 4 January 2026 and becoming the first formal airline collapse of the year.
Between 3,000 and 4,000 passengers holding reservations for travel through March 2026 suddenly found their bookings void, with no advance warning given before operations ceased.
Royal Air Philippines, owned by Cambodia-registered Lanmei Group, had struggled to sustain its low-cost model as passenger numbers fell sharply throughout 2025, with its core market of Chinese and South Korean tourists declining steadily.
In the first nine months of 2025, international passenger numbers fell to around 51,800, while domestic traffic dropped 63 percent to roughly 38,800 — a rapid reversal from 2023 and 2024, when volumes had briefly recovered toward 116,000 annually.
Chief executive Eduardo Novillas had signalled the carrier’s dire position weeks before the shutdown, sending a letter dated 22 December 2025 to a travel agency announcing the halt to all commercial operations effective 4 January, citing significantly low interest from key markets.
The Philippines Securities and Exchange Commission issued a formal order on 30 January 2026 placing the airline under receivership, with liabilities totalling ₱4.27 billion against assets of only ₱1.13 billion — producing a net deficit of ₱3.14 billion.
The airline’s fleet of eleven aircraft, including seven Boeing 737-800s, two Airbus A321neos, and two ATR 72-600s, were grounded and placed under custodial control by the receiver immediately following the order.
More than 38,500 passengers had registered claims with the SEC by early February, though travellers typically rank as the lowest-priority creditors in insolvency proceedings, sitting behind secured lenders with stronger legal standing.
Some routes, including niche leisure services such as Taipei to Boracay, have lost direct connectivity entirely, forcing affected travellers onto longer multi-stop itineraries with competing carriers.
The Royal Air Philippines liquidation stands as the first significant airline failure of 2026 and underscores the ongoing vulnerability of smaller regional carriers dependent on tourism flows and a narrow customer base.
