Empty Middle Seat, New Normal?
27 April 2020
27 April 2020
The Philippine government will provide support packages for Philippine Airlines, Cebu Pacific and AirAsia Philippines in a discussion made today during a meeting of the Inter-Agency Task Force (IATF) for the Management of Emerging Infectious Diseases held at Malacanang Palace.
DOF Secretary Carlos Dominguez III said the economic package will be disclose after approval by President Rodrigo R. Duterte.
DFA Secretary Teodoro Locsin Jr. has previously stated that the survival of the aviation industry is vital to the economy which requires support from the Philippine government.
The call for government support came after International Air Transport Association(IATA) publishes data which paint a gleam picture for Philippine-based carriers which see a projected reduction of 47% of passengers from 2019 figures.
IATA data analysis showed that the COVID-19 crisis will see PH-based carriers to lose US$4.481 billion in revenues and US$548 million in lost jobs.
The IATA data also showed global airline passenger revenues to drop by USD314 billion in 2020, a 55% decline compared to 2019.
“The situation is deteriorating. Airlines are in survival mode. They face a liquidity crisis with a USD61 billion cash burn in the second quarter. We have seen the first airline casualty in the region (Virgin Australia),” said IATA’s regional vice president, 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 identified India, Indonesia, Japan, Malaysia, the Philippines, Korea, Sri Lanka and Thailand as priority countries that need to take action.
Airlines in the Asia Pacific will see the largest revenue drop of US$113 billion in 2020 compared to 2019 (-US$88 billion in 24 March estimate), and a 50% fall in passenger demand in 2020 compared to 2019 (-37% in 24 March estimate). 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.
Air Carriers Association of the Philippines (ACAP) earlier wrote NEDA and the Department of Finance (DOF) in 25 March for economic support to the airlines comprising Philippine Airlines, Inc. (PAL), Cebu Air, Inc. (Cebu Pacific), Philippines AirAsia, Inc., Air Philippines Corp. (PAL Express), and Cebgo, Inc., emphasized that they are not seeking a “handout” at the expense of the taxpayers but only want to have ready working capital to allow them to restart and continue operations.
ACAP Vice President Roberto Lim said one of the IATF proposal to airlines was to fly at 50 percent capacity with an empty seat between each passenger as part of social distancing rules to be observed in the post-lockdown environment.
Lim said airlines could start with the middle seat empty policy in the first few months after lifting the travel lockdowns but described said strategy to be unsustainable in the long run without government buying some of the seats.
“I think this is where government support needs to come in. Hindi talaga pwede gagawin habang panahon, mahirap ituloy…’di kakayanin,” he said.
The IATA data also showed global airline passenger revenues to drop by USD314 billion in 2020, a 55% decline compared to 2019.
“The situation is deteriorating. Airlines are in survival mode. They face a liquidity crisis with a USD61 billion cash burn in the second quarter. We have seen the first airline casualty in the region (Virgin Australia),” said IATA’s regional vice president, 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 identified India, Indonesia, Japan, Malaysia, the Philippines, Korea, Sri Lanka and Thailand as priority countries that need to take action.
Airlines in the Asia Pacific will see the largest revenue drop of US$113 billion in 2020 compared to 2019 (-US$88 billion in 24 March estimate), and a 50% fall in passenger demand in 2020 compared to 2019 (-37% in 24 March estimate). 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.
Air Carriers Association of the Philippines (ACAP) earlier wrote NEDA and the Department of Finance (DOF) in 25 March for economic support to the airlines comprising Philippine Airlines, Inc. (PAL), Cebu Air, Inc. (Cebu Pacific), Philippines AirAsia, Inc., Air Philippines Corp. (PAL Express), and Cebgo, Inc., emphasized that they are not seeking a “handout” at the expense of the taxpayers but only want to have ready working capital to allow them to restart and continue operations.
ACAP Vice President Roberto Lim said one of the IATF proposal to airlines was to fly at 50 percent capacity with an empty seat between each passenger as part of social distancing rules to be observed in the post-lockdown environment.
Lim said airlines could start with the middle seat empty policy in the first few months after lifting the travel lockdowns but described said strategy to be unsustainable in the long run without government buying some of the seats.
“I think this is where government support needs to come in. Hindi talaga pwede gagawin habang panahon, mahirap ituloy…’di kakayanin,” he said.