Local airlines asked Congress for financial support as the industry is running out of cash amid the coronavirus disease 2019 outbreak.
“The leaders of Congress and the chair of economic affairs and transportation committee initiated a stimuli bill for the economy. We have written in the past few weeks both the executive and legislative branch to request for financial support to the transport sector like the airline industry,” Air Carriers Association of the Philippines vice president and executive director Robert Lim said in a text message.
“We are just one sector that is presenting its needs to a congressional initiative,” Lim said.
The House of Representatives earlier proposed a P370-billion economic stimulus package to mitigate the impact of the COVID-19 pandemic on the economy.
Lim said the average monthly fixed cost of ACAP carriers reached P7 billion, and “without revenue means, that is the monthly losses.”
“On top of that, the running total of claims for ticket refund is around P5 billion. This is a major problem because airlines have no cash,” he said.
ACAP members include Philippines Airlines Inc., Air Philippines Corp., Cegbo Inc., Cebu Air Inc. and Philippines AirAsia Inc.
ACAP earlier requested the government to provide a credit guarantee scheme, not cash that guarantees the banking sector’s loans and credit lines, most of which are secured with collaterals, to remove its aversion to the poor credit risk of the airline industry under the current operating environment.
The group asked a long-term facility at attractive rates or a guaranty facility to enable airlines to restructure debt to a more manageable level and give them leverage to negotiate better terms from aircraft lessors, lenders and creditors to ensure a successful recovery plan.
The International Air Transport Association estimated that the COVID-19 pandemic could cost 548,300 jobs in the country and reduce airlines’ revenues by $4.48 billion this year.
It could also affect travel demand by as many as 28.85 million passengers from an earlier projection of 21.87 million passengers, according to IATA.
