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Budget carriers restart operations

/ 05:16 AM July 16, 2020

Philippine budget airlines are restarting flights to select international destinations even as they struggle with drastically lower demand and the lack of government support amid the coronavirus pandemic.

AirAsia Philippines announced the start of flights from Manila to Kuala Lumpur on July 21, with plans to fly to Bangkok (Don Mueang) and Taipei by Aug. 4 this year. Cebu Pacific started flights to Dubai on July 12.

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They joined Philippine Airlines (PAL), which resumed international flights after strict quarantine measures were lifted in June.

The country’s three major airlines have been badly hit by the health crisis and have implemented costs cuts, including layoffs, to stay afloat.

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It also remains unclear how soon confidence in flying will be restored with the Philippine government reporting a recent surge in COVID-19 infections.

Stimulus bills that would have provided a lifeline to sectors such as airlines and tourism had also faced delays as economic managers worried about funding these programs.

After one of its external auditors raised red flags on the AirAsia Group’s viability, CEO Tony Fernandes said “management has been working tirelessly to ensure the sustainability of our business operations.”

Moreover, he said AirAsia Philippines has applied for “the government-guaranteed loan” under stimulus bills that have yet to be approved.

These loans would help critical sectors such as airiness survive the pandemic, said Roberto Lim, vice chair of the Air Carriers Association of the Philippines.

Lim earlier said the country’s three major carriers—PAL, Cebu Pacific and AirAsia Philippines—would need help to the tune of P8.6 billion a month.

Most of the amount, or P6.8 billion, would be for working capital, which Lim said was mostly for aircraft lease payments. Another P1.3 billion was for monthly wages while the airlines pay P500 million a month in airport and navigational fees.

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Without clear signs of support, airlines have been cutting their workforce.

Cebu Pacific said it was laying off some 800 employees in August.

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TAGS: AirAsia Philippines, Cebu Pacific, Philippine Airlines (PAL)
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