Airline recovery remains slow and uncertain

Cebu Pacific, the country’s biggest budget airline, said recovery was significantly slower than expected as it struggles with weak demand and shifting local government unit (LGU) rules amid the new coronavirus (COVID-19) pandemic.

Candice Iyog, Cebu Pacific vice president for marketing and customer experience, said their network remained at less than 10 percent of prepandemic levels, with their planes flying half-empty on the average.

After strict lockdown measures were lifted last June 1, Iyog said Cebu Pacific hoped to be closer to 20 to 30 percent of its regular network by this time.

“There are still so many uncertainties,” Iyog told reporters during an online briefing on Friday. “We plan to grow the network but there are so many dependencies to be able to do that.”

The problems plaguing Cebu Pacific are felt across the industry. She said total passengers carried by the Philippines’ largest carriers fell 94 percent to 800,000 in the second quarter of 2020, which covered the busy summer months.

The Philippines, where COVID-19 infections have been rising, also lags behind some of its close neighbors in the region.

Iyog said Vietnam, Thailand and Malaysia have gradually opened up domestic air travel.

“I agree we should limit nonessential travel and prioritize essential travel, people who are trying to get home,” she said.

Varying LGU rules, however, continued to be a challenge. Iyog said the airline had dedicated teams that meet twice a day to coordinate with different airports around the country in case there were last-minute changes to their requirements.

The host of LGU guidelines included swab test results 72 hours before a flight or residency in their province but not a neighboring area. Others tell the airlines to only fill up half their aircraft for social distancing inside the plane.

“It would be great if there was a standard requirement,” Iyog said.

Cebu Pacific is also coping by cutting costs and offering passengers unlimited free rebooking and a travel credit good for two years.

Nine of its planes—seven Airbus A321CEOs and two A330s—have been sent for indefinite storage in Alice Springs, Australia. More planes could be put in long-term storage given weak market demand.

Cebu Pacific recently laid off about 25 percent of its employees given poor business prospects.

The airline and other major carriers under the umbrella organization Air Carriers Association of the Philippines are seeking support via long-term loans and credit guarantees from the government, which has been slow to act on stimulus measures to prop up important business sectors.

“We will take a package if it’s offered,” Iyog said.

Cebu Pacific is so far using about half of its 76 planes on rotation. It currently operates 40 to 50 flights a day, down from as many as 420 flights before the pandemic.