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Philippines: Airlines see long, difficult recovery
MANILA, Philippines — The aviation industry’s recovery will be long and challenging as airlines will remain financially fragile until next year, according to the International Air Transport Association.
IATA said airlines globally are expected to lose $84.3 billion this year, with revenues to be slashed by half to $419 billion from $838 billion in 2019.
Asia-Pacific carriers are seen as the biggest casualties, with losses expected to reach $29 billion for 2020.
“Financially, 2020 will go down as the worst year in the history of aviation,” IATA director general and CEO Alexandre de Juniac said.
“Provided there is not a second and more damaging wave of COVID-19, the worst of the collapse in traffic is likely behind us,” he said.
IATA said the industry is expected to cut its losses to $15.8 billion next year as airlines would be in recovery mode, but it would still be well below pre-crisis levels on many performance measures.
“Airlines will still be financially fragile in 2021. Passenger revenues are expected to be more than one-third smaller than in 2019. The challenge for 2022 will be turning reduced losses of 2021 into the profits that airlines will need to pay off their debts from this terrible crisis,” De Juniac said.
Although losses will be significantly reduced by next year from 2020 levels, IATA said the industry’s recovery is expected to be long and challenging given factors that include debt levels, operational efficiencies, confidence to travel and recession.
“Competition among airlines will no doubt be even more intense. That will translate into strong incentives for travelers to take to the skies again,” de Juniac said.
“People will want to fly again, provided they have the confidence in their personal financial situation and the measures taken to keep travelers safe,” he said.
Philippine carriers’ have been reeling from the impact of the pandemic, which grounded their planes for more than two months since mid-March.
AirAsia Philippines will start letting go 12 percent of its 2,200 employees starting next month, while Cebu Pacific and flag carrier Philippine Airlines (PAL) have also laid off hundreds of workers, respectively, due to the pandemic.
PAL president and COO Gilbert Santa Maria earlier said the airline may layoff more crew depending on how its recovery plays out.
Source: https://www.philstar.com/business/2020/06/11/2020025/airlines-see-long-difficult-recovery