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Local airline industry loses P60 billion amid pandemic

The Airline Carriers Association of the Philippines said Monday losses of the local airline industry last year likely reached P60 billion amid the pandemic.

ACAP executive director and vice president Roberto Lim said travel traffic in 2020 was just 16 percent of pre-COVID level in 2019 while cargo traffic was not enough to offset the losses.

“The industry suffered P47-billion loss as of September 2020. If we extrapolate this, it could easily reach P60 billion as of end-December. These are just local carriers,” Lim said during the virtual forum “Tapatan sa Aristocrat.”

He said cargo traffic was also 33 percent of the 2019 level for AirAsia, Cebu Pacific and Philippine Airlines.

Lim said neighboring countries like Indonesia, Malaysia and Thailand bounced back to 40 percent to 70 percent of traffic. He said the Philippines should observe and adopt what these countries did to recover from losses caused by the pandemic in order to rebound to 40 percent to 50 percent of the pre-pandemic level.

“Even at 40 percent, which is already a challenge, there are many factors at play to reach this much—confidence on the vaccine, confidence of passengers on the airline and confidence on the LGUs,” he said.

An industry position paper submitted to the Inter-Agency Task Force on Emerging Infectious Diseases recommended a unified, single category of travelers that would render the travel processes simple for carriers.

The ISTF has four classification of travelers, all with different set of protocols—authorized persons outside the Philippines, locally-stranded individual, returning overseas Filipinos and tourists.

“Why do we have four categories of travelers in the domestic scene? There should only be one and this will make the regulations simple. It is also easier for the airline to deal with one type of domestic travel. We are dealing within the territory of the Philippines, and not the requirements of a foreign country,” Lim said.

He said travelers were confused on how to deal with so many requirements and protocols.

Lim said that despite the challenges, the three major carriers would be strong enough to withstand the challenges until 2021.

“Not one with the three carriers is ready to fold-up. In my meetings with them, they were very decided to overcome this challenge of the industry. They have been implementing measures they think will help them get through this year and while doing this, they’re hopeful that travel will pick up to earn some revenues,” he said.

He said Cebu Pacific’s plan to apply for a $250-loan and PAL’s debt restructuring and corporate streamlining aimed to help them triumph over the pandemic.

PAL let go of around 2,500 employees while Cebu Pacific retrenched 4,000 more to keep the companies operating.

“Let it be known that the airline industry is still here. They are still intact and what they need to achieve is to have more people flying, to be able to fly to more destinations with increased frequency. This industry does not only cater to tourism but to professionals, trade and business, as well,” Lim said.

Topics: Airline Carriers Association of the Philippines , local airline industry , COVID-19 pandemic , AirAsia , Cebu Pacific , Philippine Airlines
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