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Philippine Airlines are aIts pre-pandemic passenger volume is likely to rebound in 2021, Fitch Ratings said, as the continued spread of coronavirus disease 2019 (COVID-19) in the Philippines remains a “high risk.”
In its latest unrated action comment, Fitch Ratings said airline passenger traffic in some key Asia-Pacific markets, including the Philippines, will remain “well below 2019 levels in 2021, despite a recovery. “
“The pace of recovery will depend on the relative success of each market in controlling the coronavirus pandemic, which will help improve passenger confidence and reduce the risk of further travel restrictions, as well as their participation in international traffic, which we hope it stays weaker. than the national volume, ”he said.
Fitch Ratings said the Philippines and Indonesia “will see average levels of RPK (revenue per passenger-kilometers) at 35% of the baseline in 2020 and 60% in 2021.”
RPK is a metric used by the airline industry that shows the number of kilometers traveled by paying passengers.
Airlines in Thailand and Malaysia are likely to experience the same levels of RPK, as international traffic volume will remain weak despite countries’ success in curbing the pandemic.
The flag carrier Philippine Airlines, operated by PAL Holdings, Inc., carried 16.8 million passengers last year, while the budget airline Cebu Pacific, operated by Cebu Air, Inc., carried 22.5 million passengers. Philippines AirAsia, Inc. conducted 8.55 million passengers in 2019.
The Philippines continues to experience an increase in COVID-19 infections. The Health department reported 3,073 new confirmed coronavirus infections on Monday to bring the total to 307,288 cases.
Fitch Ratings said its forecasts are based on the assumption that a COVID-19 vaccine or treatment would not be widely available in 2021, “but that progress is being made in controlling the pandemic.”
“Airline passenger volume could improve faster than we forecast if an effThe effective vaccine is distributed sooner than we think or if there is more success in containing the pandemic. However, we anticipate Floridaon demand in 2021 which is well below the 2019 base if there were limited progress on this measure, ”he said.
China is the only country in the Asia-Pacific region that is expected to recover in terms of air passenger traffic, as it has managed to control the pandemic.
Average RPKs for 2021 may recover to at least the 2019 level if China evades another wave of the pandemic. The year-on-year declines in monthly RPKs have been narrowing over the past few months, but we believe total RPKs for 2020 may still fall by around 40%, and national RPKs are around 30% lower, ”Fitch said. Ratings.
For Vietnam, the debt watcher said airlines there “should recover faster” than their counterparts in other ASEAN countries. “[This] It is due to the low incidence of COVID-19 cases in the country. We forecast average RPK of around 55% of the baseline in 2020 and 90% in 2021, ”Fitch Ratings said.
Singapore could see a 70% drop in its passenger volume this year as airlines are completely dependent on international routes, he said.
Fitch Ratings expects Singapore airline passenger traffic to remain at around 50% next year, also below its 2019 levels. – Arjay L. Balinbin
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