Royal Air Philippines has entered liquidation after abruptly cancelling every scheduled passenger flight on 4 January 2026, marking one of the first airline collapses of the year and leaving thousands of travellers without valid bookings.
The Manila based carrier, which had been operating for more than two decades, gave little public warning before shutting down its entire commercial operation. Between 3,000 and 4,000 passengers holding tickets for travel through March 2026 were left scrambling for alternatives, with the airline’s website offering only a brief message promising refunds and expressing hope of resuming operations at an unspecified future date. Industry observers consider a genuine comeback highly unlikely given the formal Royal Air Philippines liquidation proceedings now underway.
The collapse had been building for some time. During the first nine months of 2025, International passenger numbers had fallen to around 51,800 while domestic traffic dropped by more than 60 percent compared with the previous year. The airline had relied heavily on inbound tourism from China and South Korea, particularly to resort destinations such as Boracay and Palawan, but that customer base had weakened significantly. CEO Eduardo Novillas had already written to a travel agency in late December warning that commercial flights would halt by 4 January due to what he described as significantly low interest from key markets.
The financial picture uncovered through the liquidation process was severe. According to the Philippines Securities and Exchange Commission, the airline had accumulated liabilities of 4.27 billion pesos against assets worth just 1.13 billion pesos, leaving a net deficit of more than 3 billion pesos. Unpaid taxes of 892 million pesos had also accrued across 2024 and 2025. The Civil Aviation Authority of the Philippines revoked the airline’s Air Operator’s Certificate before the formal liquidation began, citing failure to maintain minimum safety and operational standards.
Ownership of Royal Air Philippines rested with Cambodian registered Lanmei Group, which had supported the carrier’s expansion into scheduled commercial routes from 2018. The airline had grown to serve international destinations including China, South Korea, Taiwan, Hong Kong and Cambodia, before competitive pressure from larger Philippine carriers and the collapse of its core Chinese and Korean tourism market made recovery impossible.
For affected passengers, the outlook is uncertain. Refunds may be delayed or insufficient given the liquidation process, which typically places travellers at the back of the creditor queue behind secured lenders. Those who paid by credit card have been advised to request a chargeback, while travellers with insurance should check whether their policies cover airline insolvency. Anyone who had booked niche routes such as Taipei to Boracay now faces longer, multi stop journeys as direct connectivity on those services has been lost entirely.
The Royal Air Philippines liquidation underscores the fragility of smaller carriers operating in niche tourism markets. Thin margins, dependency on a narrow customer base and an inability to absorb sudden demand shocks proved fatal for a Business that had briefly carried more than 100,000 passengers a year during its peak in 2023 and 2024.