Gov't to Provide Support Packages for PHL Carriers

In a meeting of the Inter-agency Task Force (IATF) last April 27, the Philippine government has disclosed that it will provide support packages for Philippine Airlines, Cebu Pacific and Philippines AirAsia. The specifics of the package however has not yet been discussed pending approval by President Rodrigo Duterte, said Department of Finance secretary Carlos Dominguez III.
Photo credits: raptor_031
In a report from Philippine Airspace, the call for government support came after International Air Transport Association (IATA) publishes data which paint a gleam picture for Philippine-based carriers which see a projected reduction of 47% of passengers from 2019 figures.
IATA data analysis showed that the COVID-19 crisis will see PH-based carriers to lose US$4.481 billion in revenue which will affect 548,300 aviation jobs including those of aviation-dependent industries.

In an analysis by the IATA, the COVID-19 crisis will see global airline passenger revenues drop by US$314 billion in 2020, a 55% decline compared to 2019. Airlines in Asia Pacific will see the largest revenue drop of US$113 billion in 2020 compared to 2019 (-US$88 billion in 24 March estimate), and a 50% fall in passenger demand in 2020 compared to 2019 (-37% in 24 March estimate).

Conrad Clifford, IATA's regional vice-president Asia Pacific has identified the Philippines as one of the countries that need to take action by providing a combination of direct financial support, loans, loan guarantees and support for the corporate bond market, and tax relief.

"The situation is deteriorating.  Airlines are in survival mode. They face a liquidity crisis with a US$61 billion cash burn in the second quarter. We have seen the first airline casualty in the region. There will be more casualties if governments do not step in urgently to ensure airlines have sufficient cash flow to tide them over this period,” said Clifford.

Department of Foreign Affairs secretary Teodoro Locsin Jr. has previously stated that airlines play a vital role in the economy of a country and that support from the Philippine government is required.

The Air Carriers Association of the Philippines (ACAP) previously wrote to the National Economic and Development Authority (NEDA) and the DOF last March 25 requesting the need for economic support to the airlines comprising Philippine Airlines, Inc. (PAL), Cebu Air, Inc. (Cebu Pacific), Philippines AirAsia, Inc., Air Philippines Corp. (PAL Express), and Cebgo, Inc.

ACAP Vice President Roberto Lim said one of the IATF proposal to airlines was to fly at 50 percent capacity with an empty seat between each passenger as part of the social distancing rules. However, while Lim said airlines could start with the middle seat empty policy in the first few months after lifting the travel restrictions, he said the strategy will be unsustainable in the long run without government buying some of the seats.


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