The Department of Transportation said Wednesday it is preparing contingency measures to help the aviation sector amid the enhanced community quarantine in Luzon designed to contain the spread of coronavirus disease 2019.
Transportation Secretary Arthur Tugade said the agency mapped out plans and did a scenario analysis to assure readiness of the government in the event of worst-case situations resulting in the stoppage of airline operations and closure of airports.
“We need to be prepared for any possible scenario and to employ all possible countermeasures including what may appear to be drastic and extreme ones. But we, at the DOTR, remain committed to the government’s effort to protect our country and the health of its citizens against this deadly coronavirus,” Tugade said.
Philippine Airlines, Cebu Pacific, Air Asia Philippines, Cebgo and PAL Express ceased domestic operations and some international flights over COVID-19.
Tugade instructed the Manila International Airport Authority and the Civil Aviation Authority of the Philippines to extend to airport concessionaires “rental holidays” for one month and a deferral of rental charges in the succeeding month to cover the enhanced community quarantine period, with further extensions if required, subject to regular monthly review.
He said the “rental holiday” and the deferral of payment of rental charges for airport concessionaires were immediately executory.
Tugade said that such moves were needed to cushion the economic impact of COVID-19 on the country’s aviation industry and its stakeholders.
The International Air Transport Association projected that the industry passenger revenues could plummet $252 billion or 44 percent below 2019’s figure. This scenario is based on assumptions of severe travel restrictions lasting for up to three months, followed by a gradual economic recovery later this year.
“The airline industry faces its gravest crisis. Within a matter of a few weeks, our previous worst case scenario is looking better than our latest estimates. But without immediate government relief measures, there will not be an industry left standing,” IATA director-general and CEO Alexandre de Juniac said.
“Airlines need $200 billion in liquidity support simply to make it through. Some governments have already stepped forward, but many more need to follow suit,” he said.
The latest analysis envisions that under this scenario, severe restrictions on travel are lifted after three months. The recovery in travel demand later this year is weakened by the impact of global recession on jobs and confidence.