PAL struggles to survive pandemic
Flag carrier Philippine Airlines (PAL) is fighting for survival, with its future looking uncertain following the onslaught which the coronavirus disease 2019 or COVID-19 pandemic has unleashed on the airline industry.
PAL president and COO Gilbert Santa Maria said the Lucio Tan-owned carrier is undergoing “a great time of turmoil and difficulty” and is taking everything day by day.
“So while PAL has survived for almost 80 years, just about 80 years, it is by no means certain that we will get through this because there’s a lot of unknowns. We don’t know how long this virus will last. We don’t know if there’s going to be a second surge, and all those unknowns,” Santa Maria said in a web conference organized by Go Negosyo yesterday.
“But we’ve been around for almost 80 years, we’re not giving up. We’ll be around for a while longer,” he said.
Santa Maria said the biggest challenge for the company at present is the absence of revenues.
He said while cargo has been a very helpful revenue stream, it is far from making up lost revenues from commercial flights.
“We went from over a million passengers in the month of January to significantly fewer in February because China was closed when the virus first kicked up. And then from March, April and May. In April, we were basically down to zero,” he said.
Santa Maria said PAL being a big company is also not necessarily an advantage.
“Our entire hundred aircraft fleet, those are very expensive to maintain, very expensive to keep on the ground, and we keep paying for them in either financial leases or to the people who own them, or the ones we rent,” the executive said.
According to Santa Maria, PAL is working very hard to ensure its own survival at the moment, saying that it has been hammered very hard by the pandemic.
“We will take everything day to day and we will kind of survive. But in the meantime, we’re planning for the return of demand and we are ensuring safety and security of our aircraft,” he said.
PAL last February let go 300 of its ground-based administrative and management personnel as part of a business restructuring initiative to increase revenues and reduce costs.
The airline has also implemented a voluntary separation initiative for long-serving employees.
Once commercial flights are allowed to resume, Santa Maria said PAL seeks to build confidence among passengers in flying again by implementing new safety and health measures
These include requiring face masks for all passengers and social distancing measures upon check-in, inflight, and arrival.
“We’re seeing there’s a reluctance to travel. The main concern is basically transmittal of the disease to their family members. If we can reassure them that it’s safe to travel, then they will fly because there’s also a very high, continuing demand to escape this lockdown,” he said.
Meanwhile, Santa Maria said there is “somewhat” a possibility of ticket prices going up once operations resume given the new health and safety protocols that would be put in place.
“In airlines, the CAB will not allow us to raise prices. You know that’s something that, when the IATF was formed, it’s very clear there’s no way we can increase prices in this market,” he said.
“But you know, within the airlines itself we have different classes of seats right and so we will charge different prices for promotions and different prices for a standard regular seat. And so we will work within that framework to allow us to fly economically but safely,” he said.