The three biggest airlines in the country likely incurred P22 billion in net losses in the second quarter because of the border closures and community quarantine that affected the industry’s operations, an industry group said over the weekend.
Air Carriers Association of the Philippines vice president and executive director Robert Lim said the estimated second-quarter net losses of Philippine Airlines, Cebu Pacific and Air Asia Philippines likely reached P22 billion following a 94-percent drop in passenger traffic.
ACAP estimated that passenger traffic slumped to 800,000 in the second quarter from 13.5 million passengers in the same period last year.
Local airlines resumed limited domestic flights on June 3 after the government relaxed quarantine measures in Metro Manila and other provinces.
Some local government units, however, are not accepting domestic flights over worries of new COVID-19 cases in their cities and provinces.
Lim said a unified and coordinated policy by the Inter-Agency Task Force for the Management of Emerging Infectious Diseases and LGUs would be a welcome development in the industry.
“Different provinces have different assessments of their virus containment situation even if they are already in GCQ [general community quarantine]. So, some variation will remain,” he said.
ACAP, which includes AirAsia Philippines, Cebu Pacific, Philippine Airlines and their affiliates, recently discussed with senators the financial support requirements of the aviation sector in order to operate sustainably once the community quarantine period is lifted.
ACAP earlier asked the government to provide a non-cash credit guarantee scheme 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.
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.
It could also affect travel demand by as many as 28.85 million passengers from an earlier projection of 21.87 million passengers.