1Aviation Groundhandling Services Corp., the ground handling service provider of Cebu Pacific and Cebgo, said Wednesday it is laying off more than 1,000 employees as the aviation industry reels from the COVID-19 pandemic.
“This unprecedented and uncertain situation with COVID-19 will continue to impact the aviation industry for many months ahead. Most forecasts show that it will take about two years before the aviation industry recovers from the impact of the COVID-19 pandemic. Given this situation, it is clear that the company still needs to take more drastic measures to ensure its survival,” 1Aviation said in a statement.
“With a heavy heart, we are left with no other recourse but to let go of 25 percent of our total workforce. Their last day as employees will be on July 20, 2020,” the company said.
The ground handling service provider has nearly 5,000 employees. 1Aviation already laid off 400 newly-hired staff in April because of the pandemic.
1Aviation said to cope with the pandemic, it implemented cost-mitigation measures such as a freeze on hiring, key projects and capital expenditure, restricting overtime and deferment of salary increases.
The company, however, assured that the affected employees would be treated fairly and respectfully. “The welfare of affected employees will be taken cared of as we always do, with packages that are above what the law requires. We also assured them that they will be prioritized for hiring once the situation stabilizes and business picks up again,” it said.
“We regret having to make this difficult decision and thank all our employees for their dedication, understanding and support,” it said.
The International Air Transport Association said in its latest report the pandemic could cost 548,300 jobs in the Philippine air sector this year and cut the industry’s revenues to $4.48 billion.
Air Carriers Association of the Philippines, which includes AirAsia Philippines, Cebu Pacific, Philippine Airlines and their affiliates, asked for financial support to enable the aviation sector to operate sustainably once the community quarantine period is lifted.
ACAP requested the government to provide a credit guarantee scheme (not cash) to cover the banking sector’s loans and credit lines, most of which are secured with collaterals, to remove the aversion to the poor credit risk of the airline industry under the present operating environment.
The group sought a long-term facility at attractive rates or a guaranty facility to enable airlines to restructure debt to a more manageable level and give them leverage to negotiate better terms from aircraft lessors, lenders and creditors to ensure a successful recovery plan.