Philippine Airlines and Cebu Pacific announced Friday that all domestic and international flights will remain cancelled until May 15 after the government extended the lockdown period in Metro Manila and other parts of Luzon.
“COVID-19 is unprecedented and has certainly impacted our business. As the situation is fluid and there’s still a fairly high degree of uncertainty, it’s hard to give estimates or an outlook, but among all Philippine carriers, we have the strongest balance sheet,” Cebu Pacific corporate communications director Charo Logarta Lagamon said.
“We came in to the crisis with almost P18 billion in cash, as well as access to credit lines,” she said.
Lagamon said the priority of Cebu Pacific was to ensure the health and safety of its personnel and customers. “Second is to ensure we remain resilient,” she said.
Cebu Pacific’s flights will remain canceled until May 15 in line with the extension of enhanced community quarantine imposed over much of Luzon and the implementation of general community quarantine over other provinces.
“However, Cebu Pacific will continue to mount all-cargo flights to support the movement of vital goods, including medicines and Personal Protective Equipment across the country,” the airline said.
“We will provide updates on when we will restart passenger operations as soon as possible,” Cebu Pacific said.
PAL said its regular, commercial flights would also remain suspended until May 15. “Should the lockdown be lifted by end-day of May 15, there will be a gradual and calibrated resumption of operations starting May 16. The complete list of flights to be operated once the ECQ is lifted will be released as soon as possible,” PAL spokesman Cielo Villaluna said.
“In the meantime, our domestic sweeper flights and special flights—arranged by several foreign embassies to ferry stranded nationals out of the country—will continue,” she said.
The number of jobs at risk in the Philippine aviation industry rose to more than 500,000 as airlines operations are still grounded, according to the latest report of the International Air Transport Association.
IATA said the pandemic could cost 548,300 jobs in the country, higher by 128,500 from its earlier estimate of 419,800 jobs. It also adjusted the projected reduction in airline revenues to $4.48 billion from an earlier estimate of $3.5 billion.
The group said the pandemic could affect travel demand by as many as 28.85 million passengers from an earlier projection of 21.87 million passengers.
It said globally, the revenue drop could reach $113 billion in 2020 from an earlier estimate of $88 billion. These estimates are based on a scenario of severe travel restrictions lasting for three months, with a gradual lifting of restrictions in domestic markets, followed by regional and intercontinental.
“The situation is deteriorating. Airlines are in survival mode. They face a liquidity crisis with a $61-billion cash burn in the second quarter. We have seen the first airline casualty in the region,” said IATA regional vice president for Asia-Pacific Conrad Clifford.
“There will be more casualties if governments do not step in urgently to ensure airlines have sufficient cash flow to tide them over this period,” Clifford said.
He identified India, Indonesia, Japan, Malaysia, the Philippines, Republic of Korea, Sri Lanka and Thailand as priority countries that need to take action.
IATA is calling for a combination of direct financial support, loans, loan guarantees and support for the corporate bond market and tax relief.
“Providing support for airlines has a broader economic implication. Jobs across many sectors will be impacted if airlines do not survive the COVID-19 crisis. Every airline job supports another 24 in the travel and tourism value chain. In Asia-Pacific, 11.2 million jobs are at risk, including those that are dependent on the aviation industry, such as travel and tourism,” Clifford said.