Local airlines need govt aid to survive, says expert

PETALING JAYA: An aviation expert has warned of a “long and arduous” journey for the local airline industry now that people around the world are barred from travelling due to the Covid-19 pandemic.

Mohd Harridon Mohamed Suffian of Universiti Kuala Lumpur, who does research into the aviation industry, said dramatic measures such as capital injection from the government would be needed if local airlines were to survive.

Malaysia Airlines, for instance, might not be able to survive for more than a year, he told FMT.

The other two local carriers are AirAsia and Malindo Air.

Harridon said the airlines would also need restructuring. They would have to undertake cost-cutting measures such as the temporary laying off of workers and cuts in allowances and salaries, he added.

The global aviation industry is struggling to absorb shocks from the pandemic, with airlines across the world grounding fleets, placing thousands of workers on unpaid leave and seeking state bailouts to survive the crisis.

Singapore Airlines recently announced it would cut capacity by 96%, ground almost its entire fleet and impose cost cuts affecting about 10,000 workers. A spokesman described the pandemic and the consequent travel bans as the “greatest challenge” the company had ever faced.

Harridon said airlines based in Malaysia could start bouncing back after the lifting of the government’s movement control order.

However, it might take them years to recover, he added.

“There’s the issue of how to regain passengers since most would perhaps be still afraid of contracting the virus,” he said.

A travel agent who asked to be anonymous said people in his business had been left reeling by the travel bans, but he added that swift recovery was possible if the government were to help with incentives and funding.

He described the pandemic as a “monstrosity” and said he had never seen such a sharp blow on the travel business in his 40 years of dealing with airlines.

“I have seen so many recessions, wars and trade disagreements,” he said. “These have never deterred people from flying. But this virus is something else.

“I am now forced to look at a blank screen. There are virtually no flights to book.”

He said he first saw a dip in flight bookings and plenty of cancellations during the Chinese New Year weekend in January when the first Covid-19 case was reported in China.

“We got a sneak peek of what was about to happen when the coronavirus hit Wuhan. Close to 80% of our bookings were cancelled. Most of the flights affected were those bound for China and coming from there.”

He estimated that the extension of the movement control order would result in nearly half a billion ringgit of losses to the travel and tourism industries.

He said travel agents would be able to sustain only up to June at best unless the government does something to prop up the airline industry.

He urged the government to ensure that layoffs in the airline industry were kept to a minimum.

“Urgent funding must be given to keep airlines and related companies to help them stay afloat,” he said.