Philippine Airlines (PAL) is considering to seek court protection for a planned debt restructuring as it reels from a series of losses further compounded by the new coronavirus disease 2019 (COVID-19) pandemic.
Carlos Dominguez, secretary of the Department of Finance, said the carrier last week informed the agency of this plan “but gave no details on any assistance they may need from us.”
This will be the second time in a little over two decades PAL is seeking protection from debt obligations. The airline went receivership in the late 1990s a result of the 1997 Asian financial crisis where it accumulated $2.3 billion in debt.
As of end-September, PAL Holdings, operator of PAL, reported P198 billion in lease and long-term debts.
The company posted a P29.03-billion loss in the first nine months of 2020, more than triple that of the P7.83 reported in the same period last year. Revenues were at P45.3 billion, down 62 percent from P117.14 billion last year.
This is amid a planned manpower reduction of 2,700 jobs, equivalent to a third of the carrier’s workforce.
PAL said its management and stakeholders continue to work on a comprehensive recovery and restructuring plan that will enable PAL to emerge financially stronger from the current global crisis.
At present, PAL operates just 17 percent of its pre-COVID-19 flights and is gradually increasing flights since the commercial flights were allowed in June.
“(Before the pandemic), we were operating an average of 280 flights daily. We hope to increase flights as travel restrictions ease and travel demand perks up,” said Cielo Villaluna, PAL spokesman.
PAL said its shareholders continue to provide funding support as the airline continues to undertake revenue generating and cost control measures as part of its business restructuring initiatives in the coming months. (R. Castro and M. Iglesias)