Airport projects prioritized despite pandemic

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The government is still ramping up the construction and rehabilitation of major international gateways despite the uncertainty of the recovery of the aviation sector which has been hit hard by the coronavirus pandemic.

Decongestion of the country’s premier airport, Ninoy Aquino International Airport (NAIA), and regional airport development remain the Duterte administration’s priority, according to Mark Villar, Department of Public Works and Highways secretary.

The Clark International Airport passenger terminal is under construction and San Miguel Corp.’s (SMC) $15-billion Bulacan International Airport is set for construction this year.

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“The Bulacan International Airport would decongest passenger traffic at the NAIA. The new airport is expected to be operational between four and six years from the target start of construction in 2020,” Villar said at the recent pre-State of the Nation Address virtual briefing.

Groundbreaking of the new international gateway is postponed, but SMC targets to pursue this by the second half of this year.

The airport will complement the operations of NAIA and Clark. It can accommodate 100 million to 200 million passengers annually.

Meanwhile, the Clark International Airport new passenger terminal building is to be completed this month. It is seen to accommodate an additional 8 million passengers, increasing the current capacity to 12.2 million annually.

Sangley airport was inaugurated last February. It will initially cater to commercial cargo and will be utilized for general aviation and turboprop cargo operations from 6 a.m. to 6 p.m.

Recently, the Manila International Airport Authority terminated the negotiations with and withdrew the original proponent status of the NAIA Consortium for the P102 billion rehabilitation and expansion of NAIA.

The two parties failed to agree on the revised proposal which considers the impact of the pandemic. The government intends to pursue the project with two other potential firms.

Due to the pandemic, domestic and international flights in the country remain limited, with leisure flights still suspended and international travel limited to essential travels to control the spread of the coronavirus disease.

Local airlines’ losses have doubled in the second quarter this year to P12 billion following the over two months flight suspension, according to the Air Carriers Association of the Philippines.

To cope with the losses, the airlines are cutting down on manpower. Cebu Pacific is laying off 25 percent or 800 employees this month. AirAsia Philippines laid off 264 workers last month, equivalent to 12 percent of its current workforce of 2,200. Philippines Airlines laid off 300 employees last March.

“Financially, 2020 will go down as the worst year in the history of aviation. On average, every day of this year will add $230 million to industry losses. In total that’s a loss of $84.3 billion,” the International Air Transport Association (IATA) had said.

IATA said passenger demand evaporated as international borders closed and countries locked down to prevent the spread of the virus. This is the biggest driver of industry losses.

In 2021, the airlines will be in recovery mode as the industry is expected to cut its losses to $15.8 billion but still well below pre-crisis levels (2019) on many performance measures, it added.

Although losses will be significantly reduced in 2021 from 2020 levels, IATA expects the industry’s recovery to be long and challenging, citing some factors such as debt levels, operational efficiencies, recession and passenger confidences to travel.

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