Airline losses due to flight cancellations during Apec summit may reach $2 billion

THE Airline Operators Council (AOC), whose member airlines fly out of the Ninoy Aquino International Airport (Naia), said total airline losses could reach $2 billion (P92 billion) due to cancellations of domestic and international flights related to the Asia-Pacific Economic Cooperation summit in Manila.

Also, two of the country’s major carriers, Philippine Airlines (PAL) and Cebu Pacific (CEB), reported suffering revenue losses exceeding P1 billion due to the flight cancellations. A foreign airline source who wished not to be named because he is not allowed to speak on the subject, said: “Approximately $2 billion were lost to foreign and local airlines operating at the Naia, with budget airlines ‘most affected.’”

He said most of the airline companies are covered with insurance but the low-cost carriers are the most affected . “Because of so many cancellations, they cannot re-book passengers immediately, and they cannot book them in hotels.”

PAL Spokesman Cielo Villaluna said the legacy carrier’s foregone revenues due to Apec cancellations is approximately $18.7 million (around P878.9 million).

The airline operates an estimated 260 flights a day. Close to 700 cancellations represent more or less 2.5 days of operation, she said.

“We must stress, however, that the long-term benefits of Apec outweigh these aforementioned losses,” Villaluna added.

Lawyer RJ Mantarin, CEB OIC for Corporate Affairs, said the low-cost carrier estimates a revenue loss of P400 million due to the Apec meetings.

He said CEB and its subsidiary Cebgo, as of 10 a.m. Wednesday, has cancelled a total of 857 one-way flights or at least 75 percent of the total number of flights from November 16 to 20.

CEB canceled 755 one-way flights (660 one-way domestic, 95 one-way international), while Cebgo canceled 102 one-way domestic flights.

“As there may still be further changes in flight schedules within the week, this figure may still change,” Mantaring said.

AirAsia Philippines said it canceled 74 domestic and 10 international flights from November 17 to 20 that were affected by the temporary closure of the runways. Meanwhile, Nilo Zapanta, president of Seair International, said he estimated the 1,364 cancelled flights, assuming all are domestic at P5,000 average fare for all A320 aircraft, would amount to losses totaling about P1.3 billion.

He said if the foreign flights are included, their estimate of $2-billion (P94 billion) total losses for domestic and international flights is justified.

But the media affairs division (MAD) of the Manila International Airport Authority (Miaa) estimated that around 1,800 domestic and internationals flights were canceled from November 16 to 20, due to the periodic runway closures.

This is to give way to the arrival and departure of leaders of Apec member-economies.

MAD said more international airlines held late cancellations while the rest re-scheduled their departure and arrivals due to the periodic closure of the Naia runways.

Airline experts said the cancellation of many flights from Manila to foreign destinations have affected tourist arrivals in the provinces.

- Source:  http://www.businessmirror.com.ph