Losses of local airlines are expected to double to P12 billion during thhis quarter following the continued suspension of flights due to the new coronavirus disease 2019 (COVID-19)
The Air Carrier Association of the Philippines (ACAP) composed of AirAsia Philippines, Cebu Pacific and its unit Cebgo as well as Philippines Airlines (PAL) and its unit PAL Express, said local carriers lost about P6 billion in the first quarter.
“The second quarter losses would be at least two times as that of the first quarter (losses),” Robert Lim, ACAP executive director and vice chairman, told Malaya Business Insight in a text message.
The fixed cost for local airlines alone is P7 billion a month, Lim said. ‘’If you’re not flying you still have to pay that fixed cost.’’
He said the airline industry is asking the government to lessen operational burdens, such as waiving navigational charges like parking.
“These amount to P500 million a month for local carriers,” Lim said.
He added the industry is “out on a limb. There’s nowhere to maneuver, you can only cut down costs so much.”
The aviation industry is trying to keep intact its 25,000 airline employees “but this is not sustainable,” he said.
Lim confirmed layoffs have occurred, with at least 100 personnel losing their jobs in one carrier.
The financial burden of a carrier maintaining current workforces when operations are very small is not realistic, he said, noting that current flights are at 5 percent to 7 percent of normal frequency.
Costs have to be cut somewhere, from less personnel on the ground to returning leased airlines, which is happening with airlines worldwide.
Local carriers “definitely have to return aircraft because the volume of traffic will not come back in three years” as projected by the International Air Transport Association (IATA), Lim said.
When asked if the aviation will survive as an industry during and after the pandemic, Lim said “the first and important thing” is that it has started flying.
Local airlines resumed operating domestic flights early this month after more than two months suspension that started last March 20.
Airlines are allowed to operate within areas under general community quarantine, but leisure travel remains suspended. Most of the flights are carrying returning overseas Filipino workers and stranded passengers in Metro Manila who intend to go back to their provinces.
“That’s the start of recovery, to fly again. It’s another question whether it can be sustained,” Lim said.
“This is the reason we have requested for credit guarantees to address airline liquidity problems. Banks are not lending because they are not sure if they can be repaid. Only government can guarantee this,” he added.
It’s also important to bring back passenger confidence, noted Lim.
“Overall, we are creating a safer environment. It’s not 100 percent foolproof, only a vaccine may do that, but it should make air transport relatively safer,” he said.
Safety on the ground and in the air is the aviation industry’s slogan, he said.
There is thermal scanning as well as hygiene and sanitary procedures in airports and inside airplanes. Thermal screening can detect at least 80 percent of infected individuals, according to Lim.
“Inside the aircraft are health protocols,” he said, noting that the last three rows are reserved to isolate passengers who develop COVID-19 symptoms aboard.
Movements inside the aircraft are limited. Food service is prepackaged and simple.
“There is technology infusion of fresh air every few minutes,” Lim said. Air is sucked in a top to bottom movement, not sideways, then filtered by high efficiency particulate filters that are used in hospital operating rooms to screen out bacteria and viruses.
In airports, passengers are constantly reminded to follow health protocols.
IATA had projected the Philippine aviation sector’s revenue losses to reach $3.5 billion and more than 400,000 job reductions this year as passenger demand is seen to drop by 36 percent, an equivalent to over 21 million passengers. This also translates to $3.75 billion potential gross domestic product loss this year. (M. Iglesias and P. Icamina)
