The domestic airline industry easily lost P60 billion in 2020, but that is not enough to break any of the domestic airline firms although the government is strongly urged to increase their domestic flights and adopt a uniformed national health and safety protocols to reopen aviation safely, according to the Air Carriers Association of the Philippines (ACAP).

ACAP Executive Director Roberto Co-Lim said during the “Tapatan at Aristocrat” virtual press conference on the country’s transport industry that “domestic carriers now loss P60 billion easily.” As of September last year, the airlines already lost P47 billion. They were not also able to recover in December as travelers got scared all the more because of the onset of the more deadly COVID-19 variants.

Revenues from freight handling are not enough also to offset the losses, because cargo level is still at 30-33 percent compared to 2019 level.

According to Lim, the P60 billion net loss does not yet include losses from related losses from aviation related businesses such as ground handling and travel agencies. In addition, the airlines have reduced their manpower by as much as 35 percent. PAL alone has retrenched by 2,625 workers of their 7,500 people, while Cebu Pacific has laid off 1,400 people out of 4,000 staff.

In addition, local carriers are still limited at 16 percent capacity compared to pre-COVID while neighboring countries are already at 40 percent to 70 percent of their capacity already.

Despite the heavy financial burden, Lim said he does not believe that domestic carriers are going to fold-up this year stressing these organizations are determined to keep their operations running.

“I believe they can. Based on my discussions, they are very decided and determined to overcome this challenge of the industry,” said Lim when asked of potential fold-ups among local airlines and if they can still operate this year.

“I just want to say that the airline industry is there, still intact. Their goal is to  be able to fly more to more destinations and more frequencies. The airline industry understands that their public sector role is not only tourism but trade and commerce, so let’s reopen the economy safely,” Lim stressed.

He cited Cebu Pacific, which is taking out a loan based on its submission to the Securities and Exchange Commission that they be allowed to borrow $250 million, approximately P10 billion, which will be of great help in their balance sheet.

PAL, the country’s premier flag carrier, is also exploring a restructuring plan that would allow them longer term payment for their aircraft leases.

In addition, he said, these airlines are undergoing reorganization to save on cost. While they are doing these measures, domestic travel would hopefully restart to give them revenues.

To help the aviation industry, Lim urged the government to come up with a simplified single national protocol for domestic travelers. He expressed hope that once the saliva test is approved by the Department of Health cost of test will be reduced from the current P2,000 that airlines can incorporate in their tickets to encourage more travel.

At present, there are 4 kinds of domestic travelers in the country: locally stranded individuals, authorized person outside of residence, returning Filipinos, and tourists.

“Why do we have 4 categories of travelers in the domestic scene. Let’s simplify,” he urged noting this has discouraged travel because Filipinos are confused about the various requirements from local government units that they rather not travel at all for now.