Airlines in Philippines seek credit aid as they fight to survive

Airlines in the Philippines are asking for credit relief and a longer reprieve from fees, saying government intervention is needed as the industry faces an “existential threat.” Philippine Airlines, Cebu Air, the local unit of AirAsia Group and other members of the nation’s Air Carriers Association or ACAP halted all passenger operations for a month until April 14 on the government’s lockdown order. This translates to 30,000 cancelled flights affecting 5m passengers. “Given these extraordinary times where the survival of the domestic airline industry is at stake, ACAP member airlines urgently appeal for timely government intervention,” it said in a letter to government officials including Finance Secretary Carlos Dominguez. Airlines have “enormous fixed costs” for their aircraft and equipment and have “no revenue flow seen for the next several weeks or even months,” it said. Airlines are seeking a credit guarantee from the government to back their loans to remove banks’ aversion to the risks of the industry, an emergency credit line for 6 months and a longer-term facility to ensure recovery. Banks have tightened credit and cut off access to undrawn lines even without defaults, the group said.<br/>