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Why the PHL government should support our local airlines

 We have received unconfirmed news that the Philippine government has not yet or even may not support our local airlines. While this remains unconfirmed, we just want to share why the government should also include the Philippine aviation industry in their priority list for support.



The Philippines is an archipelago with 7,100 islands. Having a full road network to connect each island and major cities of the country is almost totally impossible. Hence, air connectivity bridges the gap between each island, providing a faster, safer, and efficient way of transportation.

Aviation also connects the Philippines to the world, where there are also a lot of Filipino immigrants and OFWs longing to fly home during the holidays.

So basically, aviation may also act as an "infrastructure" that links each island belonging to the Philippine archipelago and the rest of the world.

Sadly during this pandemic, the local airline industry is heavily bleeding due to the sudden drop in travel demand and travel restrictions in order to curb the spread of the coronavirus in the country. We get news about retrenchments and downsizing.

The International Air Transport Association (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).

The IATA has always stressed the importance of government support for the airline industry. Conrad Clifford, IATA’s Regional Vice President, Asia-Pacific said, "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."

“Providing support for airlines has a broader economic implication. Jobs across many sectors will be impacted if airlines do not survive the COVID-19 crisis. Every airline job supports another 24 in the travel and tourism value chain. In Asia-Pacific, 11.2 million jobs are at risk, including those that are dependent on the aviation industry, such as travel and tourism,” Clifford continued.


So why should the Philippine government support our local airlines and not just to leave them bleeding and focus on other things like that white-sand in Manila Bay?

The airline industry is a major contributor to economic growth

Airlines provide a faster means of transportation for both passengers and cargo. It provides the only rapid local and worldwide interconnectivity, which makes it essential for global business. Aviation generates economic growth, creates jobs, and facilitates international trade and tourism. 

Before the pandemic, the Philippine local aviation industry had been growing on a massive rate, eventually allowing faster trade between islands and the rest of the world, growth in tourism and in the business sector. Airlines like PAL, Cebu Pacific, and AirAsia have launched flights from 3 to 4 major airports in the country, and not only from Manila, a faster means of transportation for both passengers and goods.

During the onslaught of the Covid-19 in the country, the airlines provided swift transportation of essential cargo like medical supplies and equipment to provide help in the battle of this serious disease.


It provides 548,300 jobs locally

The Philippine aviation industry has provided jobs to 548,300 Filipinos both directly and those dependent on the airline industry like the tourism sector.

If any airline or all three airlines are forced to shutdown due to bankruptcy, it would be a domino effect. When PAL was forced to shutdown temporarily in 1998, the government had to quickly ask help from Cathay Pacific to operate flights from the Philippines because the long term effects would be totally devastating to the tourism and travel industry and of course, the whole economy.

Commitment from the IATA

The IATA said that airlines will work with governments, institutions, and stakeholders to Ensure that affordable air transport will be available in the post-pandemic period and to re-establish capacity that can meet the demands of the economic recovery as quickly as possible.

In a report from the IATA, these 5 principles include:

Aviation will always put safety and security first: Airlines commit to work with our partners in governments, institutions and across the industry to:
Implement a science-based biosecurity regime that will keep our passengers and crew safe while enabling efficient operations.
Ensure that aviation is not a meaningful source for the spread of communicable diseases, including COVID-19.2. 

Aviation will respond flexibly as the crisis and science evolve: Airlines commit to work with our partners in governments, institutions and across the industry to:
Utilize new science and technology as it becomes available, for example, reliable, scalable and efficient solutions for COVID-19 testing or immunity passports.
Develop a predictable and effective approach to managing any future border closures or mobility restrictions.
Ensure that measures are scientifically supported, economically sustainable, operationally viable, continuously reviewed, and removed/replaced when no longer necessary.

Aviation will be a key driver of the economic recovery: Airlines commit to work with our partners in governments, institutions and across the industry to:
Re-establish capacity that can meet the demands of the economic recovery as quickly as possible.
Ensure that affordable air transport will be available in the post-pandemic period.

Aviation will meet its environment targets: Airlines commit to work with our partners in governments, institutions and across the industry to:
Achieve our long-term goal of cutting net carbon emissions to half of 2005 levels by 2050.
Successfully implement the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

Aviation will operate to global standards which are harmonized and mutually recognized by governments: Airlines commit to work with our partners in governments, institutions and across the industry to:
Establish the global standards necessary for an effective re-start of aviation, particularly drawing on strong partnerships with the International Civil Aviation Organization (ICAO) and the World Health Organization (WHO).Ensure that agreed measures are effectively implemented and mutually recognized by governments.

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.

However, it seems like nothing had come its way for the airlines.

We just hope and pray that the Philippine government supports its local airlines through stimulus packages and loans. Other states and countries are already doing their part to support their airlines, especially the flag carriers. We hope the PHL government would see the importance of our airlines and provide the needed rescue.



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