Why Govt Should Aid Airlines Now

From: Howard Pulling; Philippine Airlines RP-C8771 13/05/19. Ninoy Aquino International Airport, Manila. An Airbus A330-300.
https://www.flickr.com/groups/-philippineairlines/

Written by

Jude Thaddeus L. Bautista

Two PDI banner stories have sounded the alarm: MASS LAY OFFS IN AVIATION INDUSTRY, (June 19, 2020) and CEBU PACIFIC CUTS MORE JOBS DUE TO VIRUS PINCH (June 24, 2020). There are no two words about it: the airline industry is dying.

In the CEBU PACIFIC story: U.S. and Germany have poured billions of dollars to save their airlines. The European Union has also just approved the bail out for Lufthansa.

The French government is spending €15 Billion Euro bailing out not just AIR FRANCE but also plane manufacturer AIRBUS. While AIR FRANCE’s partner KLM is receiving similar support from the Dutch government. From: France announces €15bn plan to shore up Airbus and Air France- TheGuardian.com

The reason for this is obvious. Apart from saving thousands of jobs, airlines are a vital transport infrastructure.

From PAL official fb: https://www.facebook.com/PhilippineAirlines

In the case of the Philippines that vital transport infrastructure is even more critical, for the simple reason we’re an archipelago. The quickest way from provincial capitals of different major islands is the airplane. They deliver not just people but vital goods and services.

Assuming they develop the COVID vaccine tomorrow, do you expect it to reach our shores via ship, which takes months, if not weeks? If not for planes how are we possibly going to distribute those vitally needed vaccines, other medical instruments and personnel to cities like Cebu and Davao IN TIME?

Manila to Davao

The most famous route today is Manila to Davao favored by President Duterte himself. Of course no one would expect him to take the boat or bus. It’s easy to take for granted that planes have made long travel quick and convenient.

The problem is airlines are not the kind of business you can easily start from scratch. They are capital intensive, needs a lot of technical expertise and management. U.S., Germany even the European Union recognize this and offer all the financial assistance they can give, way before the airline goes under. Because they know they can’t afford to lose them. Even a diminished version where routes are fewer cannot be allowed, which is already happening here.

The next few months are critical for the airlines before the financial damage they take is irreversible. Philippine Airlines, Cebu Pacific are already crippled in terms of routes and as previously mentioned hundreds of layoffs.

The Philippine government should act immediately before it’s too late. Just like their counterparts in different more proactive governments.

Failure of our government to provide aid to the airline industry has long term impact on the economy as a whole.

From: Isaac’s Aviation Photography; Cebu Pacific I A320-200(SL) I RP-C4100 https://www.flickr.com/groups/1112902@N25/pool/page1

Reliance on OFWs

Even at the height of the community quarantine, the United Kingdom begged the Philippines to lift the ban on nurses and medical personnel leaving the country. The UK government argued that the Filipino nurses and other medical personnel were already scheduled to work in London way before the pandemic. That’s how desperate they are for skilled Filipino medical workers. They were eventually allowed to leave with the endorsement of outspoken DFA Secretary Teddy Boy Locsin.

In 2019 remittances from OFWs reached $33.46 Billion. [from BSP, Bangko Sentral Ng Pilipinas] To say that our whole economy is reliant on OFW remittances is not an exaggeration. There’s a projected loss of $6 Billion for 2020 due to the pandemic. Most recent estimates goes as high $15 Billion. Admittedly there will be considerably fewer Filipinos going to work abroad. Whether its newer OFWs or those coming back, a robust airline industry is necessary to serve all of these needs. When the pandemic does end, the airlines will be an essential economic driver to boost the recovery.

For more information on eligible passengers for travel to the Philippines, arrival guides, and answers to frequently asked questions, click here:
https://www.philippineairlines.com/en/ph/home/covid-19/arrivingintheph

LSI

Connected to this is the phenomenon of the LSI or locally stranded individuals. A great number of them are workers who were not able to go abroad and now need to go back to their respective provinces.

Airlines have suffered the brunt of criticism for cancelling flights leaving them stranded in the airport. In reality a lot of cities and other LGU (local government units) have refused to accept these returning LSI for fear of receiving covid positive individuals. That’s why flights had to be cancelled, planes were not even permitted to land.

Now there has been greater management of LSI here in Manila. The Phil Army, other NGOs are giving them food and shelter while waiting for available flights. As of June 24, LSI’s have also been subjected to rapid (covid) testing to ensure that they will not spread the disease in their provinces.

(5) From Cebu Pacific official fb: https://www.facebook.com/cebupacificairphilippines

IATF

Still, proper coordination between these authorities and respective LGUs will ensure that flights will no longer be cancelled, helping them reach their homes safely. This is supposed to be the function of the national government. That is why the IATF, the Inter Agency Task Force was formed to coordinate the pertinent agencies DILG, DOH, DOLE etc. with Local Government Units.

You cannot expect the airlines OR the LSI’s to resolve this on their own. There is an urgent and desperate need for improved communication and coordination between national and local government units to this end.

By June 29, IATF Chief Eduardo Año suspended all LSI’s from returning to their provinces, upon further notice. This is to give them a better chance to conduct more tests and confirm results etc., ensuring they are not spreading the covid-19 virus.

From Miguel Cenon; Philippine Airlines – Airbus A330-343 / RP-C8783 @ Manila https://www.flickr.com/groups/-philippineairlines/

Tourism

In 2019, the tourism sector added a record high of $ 7.29 Billion USD. [ From PDI: Tourism revenue hit record-high $7.29B in September] Tourism involves a myriad of industries: Hotels and Restaurants, Malls, Resorts, Travel Agencies, so forth. All of which are dependent, again on a strong, robust airline industry.

The more that airlines suffer financially, all of these interconnected industries, under tourism will also suffer. If you want tourism and all related industries to recover then government must be able to aid the airlines as soon as possible.

This was very clearly laid out by CEBU MACTAN INTERNATIONAL AIRPORT, CEO and Head of Aviation, Andrew Acquaah-Harrison in an interview with ANC (ABS CBN News Channel on SKY Cable). According to him their airport was on ‘survival mode’ because of reduced passengers and income. It was nearly impossible to continue paying for utilities and other operational costs. But since the airport was a vital link for those going into Cebu island and vital equipment such as masks, PPEs, ventilators, they had to continue operations 24/7. The context of which was the alarming rise in COVID cases surpassing epicenter Manila in rate of increase.

Our airplane cabins are designed to protect health and safety. High-tech systems refresh the cabin air constantly, and HEPA (High Efficiency Particulate Air) filters screen out viruses and bacteria. Add rigorous cleaning/disinfection, use of protective
gear and other safety measures and protocols, and the result is a safer journey for passengers on PAL’s flights around the world. #HeartoftheFilipino #FlySafePH

Acquaah-Harrison remains optimistic with the future of tourism in the Philippines. The main markets of China, South Korea and Japan are countries which seem to have faster recovery from the pandemic. But for the country to be able to reap this, the government has to step in immediately to support the whole aviation industry as soon as possible. He echoes the strategy of other major economies such as the U.S., Germany, France etc.

He also serves as Chief Executive Advisor at the GMR Megawide Cebu Airport Corporation (GMCAC). He has over 25 years of rich experiences with various Airports around the world. He was previously with London Luton Airport as Operations Director. Also, he has been associated with London Gatwick Airport and JFK Airport.

From: Isaac’s Aviation Photography; Philippine Airlines I B777-300ER I RP-C7781 https://www.flickr.com/groups/-philippineairlines/

PAL

Philippine Airlines is the national carrier, donning the colors of our flag. They may be the most glamorous ‘founded in 1941 and is the first and oldest commercial airline in Asia operating under its original name’. [From Wikipedia]

They on were shaky financial ground when Taipan Lucio Tan acquired them in the early 1990s. It wasn’t just a desire to make a profit but more of the belief of turning it around and representing the best our nation has to offer in the aviation industry. With the help of Pres. & COO Jaime Bautista for two decades, they’ve begun to turn that shaky status to one of the more admired and awarded in recent years: 49^th Best Airline (based on official SKY TRAX Rating in 2018) the ratings rose yearly from 2016- 83^rd and then 67^th in 2017. It eventually led to the coveted MOST IMPROVED AIRLINE in 2019 from airlineratings.com

As proof of Tan’s commitment to PAL, there are reports that he has given financial support, out of pocket just to prevent job losses. From: PAIN BEFORE GAIN, PDI Business section June 29, 2020.

Photo from: Isaac’s Aviation Photography; Cebu Pacific I A330-343 I RP-C3348 https://www.flickr.com/groups/1112902@N25/pool/page1

CEBU PACIFIC

The late John Gokongwei was already a successful Taipan with mall brand Robinsons, Jack and Jill Snacks, Robina Farms countless other firms including interests in PLDT. In spite of this he took a risk investing millions of dollars in ‘four McDonell Douglas DC-9s in 1996’ and established Cebu Pacific (from PDI report CEBU PACIFIC CUTS, June 24, 2020). It grew to the large fleet it is today serving both local and international routes.

(10) From Isaac’s Aviation Photography; Cebu Pacific I ATR 72-600 I RP-C7286 https://www.flickr.com/groups/1112902@N25/pool/page1

Faith in the Philippines

What’s similar in both Tan and Gokongwei is an unending optimism in our nation, our people. They put their money where they truly believe in thereby serving millions of Filipinos in the process. Countless thousands of OFWs (Overseas Filipino Workers) have gone abroad, earned money for their families and went back home in their planes.

Profit was just a secondary motivation for both of them, it was more faith and hope for the Philippines. Their foray into aviation is only a part of their life long nation building legacies. Not surprising, LT Group also includes ‘Philippine’ National Bank and HOPE cigarettes. Hope is the brand that established Tan’s fortune.

Isn’t it high time to return that faith and help rehabilitate the airlines they established? Philippine Airlines and Cebu Pacific have linked our disparate islands and connected our nation to the rest of the world. IF and when the government does help the airlines financially they are actually helping our country’s economy and our people by doing so. IF we are to save them in time they urgently need that financial help now.