Thursday, July 23, 2020

COVID Lockdown Costs PAL LOSSES of P9-B for JAN-MAR 2020

Businesses were among the worst hit sectors of society when the COVID-19 pandemic became as big as it did. In nowhere else perhaps is the monetary damage more easily discerned, than in the business of transportation. Normally buses and ships and airliners carrying passengers from point A to B are collectively considered an “essential” commodity in the present day. But in the interest of preventing the spread of the highly infectious novel coronavirus the shutdown of transport operations save for a limited capacity has crippled those in the business. Just ask the national flag carrier.

CNN Philippines reports that Philippine Airlines (PAL) has suffered what it terms as a “comprehensive loss” in profit on account of their air routes being cancelled as the COVID pandemic strengthened its grip on the country and the rest of the world earlier this year. A statement the company released Thursday, July 23, reveals that from January to March of 2020 PAL incurred losses amounting about P9 billion. Compared to the same period of time in 2019, at the time the flag carrier’s losses were only to the tune of P725 million. This is plainly the result of the pandemic travel restrictions which saw zero ticket sales for either domestic or international flights, until recently.

Such has been the dire situation of PAL that its Q1 losses far outstripped their net income of P1.8 billion which carried over from the year before. It did not help either that the actual start of travel restrictions against COVID-19 was in February, a month or so before the explosion of the disease as a pandemic. Their Thursday statement notes that the airline shareholders were required to bring in new capital enabling PAL to do cost control and revenue generation via “aggressive” business strategy to prepare the airline for operating in the “new normal.”

The above-mentioned business strategy involves having Philippine Airlines delay in receiving any new aircraft they have ordered, reducing the workforce to “skeletal” numbers and a salary reduction for senior managers, just to start. Already PAL has had to let go of 300 employees when the first travel restrictions came up in February. It is the airline’s hope that the potential return of up to 100 air routes both domestic and international will begin now keep the losses from Q1 to go further into Q2 2020.

Even as PAL was affected by the loss of paying passengers during the COVID-19 crisis, it still managed ably assist in the Philippines’ response to the viral pandemic. No less than 640 cargo flights from overseas and within the country helped medical and food supplies to reach communities in need, while internationally and locally stranded Filipino passengers benefited from some 222 repatriation and sweeper flights, all starting from March 2020.

Image courtesy of Business World


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