WE’RE not giving up. These were the brave words spoken by Philippine Airlines (PAL) president Gilbert Santa Maria, during a webinar on the tourism industry hosted by Go Negosyo, even as he dangled the specter of possible bankruptcies in the local aviation industry.
“PAL has the largest fleet in the Philippines. Our planes are new but very expensive, so this is a great time of challenge for us. We’re not giving up. We’ve been around for 80 years, and we will be around for a while longer, performing an essential service,” he said.
Due to the lockdown in Luzon and in other parts of the country to contain the spread of the novel coronavirus, PAL’s planes are just parked, not earning any revenue, except for the occasional sweeper flights contracted by the Department of Tourism and Department of Foreign Affairs.
“The biggest challenge of airlines is the absence of revenue, from 1 million passengers in January for PAL, to about zero in April, though we have sweepers and repatriation flights,” he said. “Most of our 100-aircraft fleet is parked, but we still pay leases, so that’s a challenge, too.”
In a separate interview with CNN Philippines, Santa Maria said, with many foreign airlines going bankrupt, local carriers may suffer the same fate. “[It’s] a distinct possibility in the Philippines as well,” he said.
Even before Covid-19, PAL has already been undergoing financial difficulties. Its holding firm recorded a 147-percent jump in its net loss to P10.6 billion in 2019, from a P4.3-billion loss in 2018. It was the third year of losses for the pioneering flag carrier. Those losses, along with lowered revenue due to Covid-19, forced the airline to terminate 300 employees in March.
Cargo revenue
At present, PAL is earning from cargo, “a very helpful source of revenue for us. We now have many cargo flights since goods still need to flow. We have multiple daily flights to the USA, carrying boxes of PPEs and vital supplies that originate in China. The geography of the Philippines is ideal for us to serve as a gateway for China-US cargo and other major cargo flows. We are tapping that.”
Santa Maria said more stringent health and sanitation measures have already been put in place to regain passengers’ trust in flying. “We are obsessed with safety and have prepared for pandemics and other crises all these years, thus our airplanes have HEPA filters to prevent contagion. The air in our cabins is like the clean air of a hospital operating room, so viruses aren’t likely to survive in the environment at 35,000 feet. Our policy requiring all travelers to wear face masks will help protect our passengers in such a clean environment, along with our other safety measures.”
He added, “We want to build confidence in flying and we have modified services to protect safety. The PPE for our crew ensures their safety; it is something we will never compromise.”
Passengers will also be given options to make them feel more comfortable when flying. “We will give them good options for safe travel. We have never been a flying sardine can—some of our cabins will offer choices with social distancing—it’s all about choices and safety.” But he was quick to add that this would not mean higher fares for customers. “The CAB [Civil Aeronautics Board] will not allow us to raise prices. There is no way to raise fares; there are different classes of flights and seats…. We will work within the current fare levels, charging different prices for promo and for regular seats in different cabins. The goal is to fly both economically and safely,” said the PAL COO.
To recover much-needed revenue, PAL will first tap the domestic tourism market. “Definitely PAL will encourage domestic tourism from Manila to the islands, beyond the car. We will fly them to Palawan and Panglao. Beyond tourists, Palawan and Bohol are great business destinations as well.”
He intimated that this early, there are already inquiries from tourists in the UK asking “when they can fly to the beach. Basically we have to tell them not quite yet.”
Santa Maria underscored that Filipinos living around will also be key in PAL’s recovery. “PAL is a flag carrier with 80 years’ experience, offering full service and the long-haul routes that are vital for our country. Europe, North America, Australasia, the Middle East—these are homes for our fellow Filipinos all around the world. We serve them. They will fly with us and feel at home. They will help us start the recovery of air travel and tourism.”
Image credits: Thor Jorgen Udvang | Dreamstime.com, Nonie Reyes
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