Airlines ask gov’t for help as COVID-19 clips industry’s wings

ABS-CBN News

Posted at Mar 31 2020 05:29 PM | Updated as of Apr 01 2020 07:24 AM

Planes of domestic carriers in Pasay City remain grounded amid the start of the air travel ban for domestic flights to and from Metro Manila and other airports in Luzon under the enhanced community quarantine on March 20, 2020. Mark Demayo, ABS-CBN News

MANILA (UPDATE) -- The country’s largest airlines appealed for government help saying the industry faces an “existential threat” as quarantine measures imposed because of COVID-19 have left airlines unable to generate revenues.

In a statement dated March 25, the Air Carriers Association of the Philippines said the virus has had a catastrophic impact on the industry, with airlines’ cash reserves running low and fleets grounded.

ACAP, which is composed of Philippine Airlines, Cebu Pacific, AirAsia and their subsidiaries, appealed to the country's economic managers for several measures to ensure that local airlines remain viable.

The group is asking the government to provide relief on working capital credit lines, an emergency line of credit for six months, a longer-term facility that would let airlines restructure their debt and a waiver on all navigational and airport charges for the rest of the year.

ACAP said banks have tightened credit to airlines even without defaults on payments because banks see them as a poor credit risk under the present situation.

A credit guarantee by the government will remove banks' aversion to lending to airlines, the group said.

The industry group also asked the government to provide emergency lines of credit to help fund six months of operations, or longer, so that airlines can fund maintenance, ground handling, catering and other expenses.

This would ensure that the industry will remain viable until demand recovers, ACAP said.

Airlines also appealed to the national government to make sure that LGUs will follow national guidelines on air transport when the lockdown over Luzon is lifted.

The group also said that besides waiving all navigation and airport charges, airport rentals and land leases should also be waived until the end of December this year.

ACAP said its members are not asking for handouts that will be shouldered by taxpayers.

"Rather, what is being sought for is ready access to working capital which is required to restart and sustain continued viable operations," the group said.

Airlines around the world are appealing for rescue as the industry suffers losses estimated to reach $250 billion because of travel restrictions imposed to check the spread of COVID-19.

- With a report from Reuters