Losses of PH airlines hit P65B
Local airlines were “left alone to survive” while the COVID-19 pandemic raged in 2020, leading to massive losses and thousands of job cuts, Air Carriers Association of the Philippines (Acap) vice chair Roberto Lim said on Wednesday.
During a Senate hearing, Lim said the industry’s finances were continually strained and losses could further mount as travel restrictions return due to a spike in COVID-19 infections.
“When we compare ourselves to our neighbors in Asia, Europe and the United States, their governments have provided a lot more cash support, loans and guarantees early on,” Lim said.
This type of financial aid has remained elusive in the Philippines after Acap sought help from President Duterte’s economic managers on March 25, 2020, and called the pandemic an “existential threat.”
Lim said airline industry losses last year reached an estimated at P65 billion while more than 5,000 jobs vanished. He did not give comparative figures, however, as local carriers remained on expansion mode before the pandemic arrived.
The hearing was called on Wednesday to discuss new stimulus measures for businesses under the Government financial institutions Unified Initiatives to Distressed enterprises for Economic recovery Act.
But even Lim was skeptical aid would be delivered in time.
“We are talking here of survival,” Lim said, explaining the law would take up to six months before full implementation. “Six months is three times of a lifetime the airlines would again have to face.”
During the same hearing, AirAsia Philippines CEO Ricardo Isla said they would tap government support should it become available.
Isla said AirAsia Philippines has laid off employees while other workers were furloughed as operations remain at just 20 percent of the prepandemic level.
“We are hoping we would be able to get government support with regard to bank guarantees for our companies such that we can also borrow money and infuse fresh capital that will drive our operations on a long-term basis,” he said.
Isla added there was a reason for optimism moving forward as the rollout of COVID-19 vaccines ramps up.
Earlier this month, Cebu Pacific announced a deal to raise P16 billion from private and government banks on top of a P12.5-billion share offer. Philippine Airlines is also implementing a major rehabilitation program because of the global health crisis.
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