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As PH airlines ‘get hit on all sides’ by COVID-19 threat, workers’ fears heighten

/ 05:34 PM March 17, 2020

Employees of domestic airlines are worried about their jobs as operators power down their fleets and ground hundreds of aircraft after President Rodrigo Duterte ordered wider measures to contain the spread of the new coronavirus disease (COVID-19).

Philippine Airlines and Cebu Pacific already slashed about 500 jobs since February and announced other cost-cutting measures with demand devastated by bans and government warnings against nonessential travel amid the COVID-19 pandemic.

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“We’re worried because we know anything can happen to us,” an airline employee who requested anonymity told the Inquirer on Tuesday (March 18). “We’re still hoping things will get better in a few months.”

The Gokongwei family’s Cebu Pacific terminated an estimated 150-190 newly hired cabin crew members after 90 percent of its seat capacity was battered by the cancelation of flights in Manila, China and South Korea.

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Lucio Tan-led Philippine Airlines last month cut about 300 ground-based jobs as COVID-19 added to mounting losses from previous years.

A bigger hit is coming as local carriers are expected to halt all domestic and international operations for about a month starting March 20 this year as the government imposed an enhanced community quarantine over Luzon island while individual provinces erected their own travel barriers.

A large number of airline employees will have little to do during this period, heightening concerns that more workforce reductions will be implemented, the airline employee said.

PAL, Cebu Pacific and AirAsia Philippines employ about 12,000 people combined, their spokespersons said.

But the sector also supports thousands of other jobs indirectly.

MacroAsia Corp., a Tan-led aviation support company, announced this week that workers will go on unpaid leave on a rotating basis while it finalizes an early retirement program to cut costs.

For travellers, the cancellations will disrupt an industry that served some 60 million local and international travellers in 2019, data from the Civil Aeronautics Board (CAB) showed.

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“This is really an unprecedented and abnormal time for the aviation sector,” Carmelo Arcilla, executive director of the Civil Aeronautics Board, said in an interview on Tuesday. “The airlines are being hit on all sides.”

The threat to global airlines is significant as think tank CAPA-Center for Aviation said most commercial carriers around the world will be bankrupt by May 2020.

In a March 16 report, CAPA said airlines with better chances of survival are those that receive support or subsidies from their home governments. In the Philippines, all carriers are privately-owned.

“The prospects for the many private airlines are not always as bright,” CAPA noted.

Roberto Lim, vice chair of the Air Carriers Association of the Philippines Inc. (ACAP), earlier warned that flight suspensions could trigger a so-called cash drain as revenues vanish while airlines return billions of pesos in refunds.

Help is on the way after the government’s economic team announced on Monday they will mobilize government-owned or controlled corporations (GOCCs)  “to assist airlines and the rest of the tourism industry.”

This was part of a broader P27.1 billion package to support the economy against the effects of COVID-19.

“We should be looking at amounts needed to ensure that we can restart the airline industry without too many glitches,” said Lim, who earlier proposed that government provide the industry with emergency loans and low interest payments.

“GOCCs should also issue public statements supporting the airlines so the banks will be confident that the industry is stable,” he added.

Edited by TSB
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TAGS: #COVID19PH, airlines, Business, jobs, losses, revenues
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