Bankruptcy ‘a distinct possibility’ for major airlines — PAL

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Metro Manila (CNN Philippines, May 13) — The COVID-19 pandemic has paralyzed several industries, including the airline business which has seen significant revenue losses.

With air passenger traffic plunging dramatically across the globe due to lockdown restrictions and heightened fears, the president of Philippine Airlines said an industry bankruptcy is likely to happen, including in the Philippines.

“Let’s look at what the rest of the world is seeing. Already, we're seeing major carriers go bankrupt,” PAL president and chief operating officer Gilbert Santa Maria told CNN Philippines on Wednesday.

Dave Calhoun, the chief executive of American aerospace company Boeing, earlier said that a major United States airline carrier will likely go out of business.

This doomsday scenario is “a distinct possibility in the Philippines as well,” according to Santa Maria.

“Given that we have no revenues and none of the carriers have revenues, we’re in dire straits,” he said.

Reduced passenger capacity

Under the so-called new normal, Santa Maria said he anticipates that airliners will have to operate between 65 to 75 percent passenger capacity.

“We will actually have fewer people on the flight, mainly because demand is down and also because we will offer passengers a choice,” he explained. “For passengers, we will allow them to be socially-distanced onboard the aircraft.”

The president said that while he is confident that the air filters in the aircrafts will “dramatically reduce the infection onboard,” they will still be providing sections where travelers may sit one seat apart.

Asked if passengers will have to pay higher fares due to a reduced load factor, Santa Maria said this may “not necessarily” be the case. He explained that fuel prices are down, and so the fuel surcharge is no longer going to be included.

“On the other hand, being able to feel safe onboard is something that some passengers will be willing to pay for,” he said.

He continued: “And not everyone can afford to sit in business class, so we'll make that option available to some passengers, but then [we will] retain the fundamental safety of the aircraft for the bulk of the passengers who'll fly with us.”

Aside from physical distancing, PAL will also implement other measures to stem the coronavirus spread.

Among them are putting up disinfecting floor mats, ensuring that employees and passengers are wearing face masks and other protocols to minimize physical contact among people.

PAL conducted airport simulations on Wednesday to identify problems and “try to eliminate them” before resuming operations.

Airlines in the country have extended flight suspensions to comply with the new rules under the modified enhanced community quarantine in high-risk areas, including Metro Manila, which will take effect from May 16 to 31.