PH Airline Seeks Gov't Support

20 March 2020

The local airline industry is seeking urgent assistance from the government in the form of credit lines as well as assurance of support for loans with private banks.

Roberto Lim, executive director and vice chairman of the Air Carriers Association of the Philippines Inc. (ACAP), said local carriers are facing identical challenges as other airlines in the world and in need of government support to help them survive the coronavirus crisis.

Manila International Airport Authority (MIAA) earlier waived landing, parking and associated fees at Ninoy Aquino International Airport to support the Philippine aviation industry.

Lim said that support is helpful but not enough to cover fleet amortization in million of dollars which the airine is still required to pay to aircraft lessors that are not subject to Philippine control and regulations.

“Fly or nr no fly airlines are still required to pay leases to their aircraft,” Lim said.

Philippine Airlines, Cebu Pacific and Air Asia Philippines leases majority of their aircraft from different aircaft lessors around the world.

Philippine-based carriers is taking a heavy beating due to government issued travel restrictions brought about by the coronavirus disease 2019 or COVID-19 outbreak.

“Because of the shutdown, there is really no revenue,” Lim said.

“So if there’s no revenue, there is no cash. And whatever cash there is is obviously being depleted because you have to pay for operating expenses which you cannot avoid like leases, salaries, and the remaining operations within the next few days,” he adds.

“What we are asking is credit line. For GOCCs (government-owned and controlled corporations) to extend credit lines because cash is the important thing just so that business can continue,” Lim said.

“The credit lines are important because we can draw on them and we can have the cash to pay,” he said.

According to Lim, the ability of an airline to continue is dependent on its day-to-day operations.

“If you stop operations, there is no revenue.” he said.

ACAP wants the government “to assure the private banks that they are supporting the airline industry”.

Lim said local carriers want government support to tell private banks to extend payment deadlines and continue to extend new credit lines to the airline industry, and renew expiring loans.

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