The parent company of Philippine Airlines booked a record 73 billion pesos (US$1.51 billion) loss in 2020 after the COVID-19 pandemic severely impacted the the global aviation sector and the company said it was putting together a debt restructuring plan for the flag carrier to survive. Several other Southeast Asian airlines have already developed restructuring plans or have sought approval for capital infusions and court-assisted debt relief. Thai Airways for example had its own plan approved by a court on Tuesday (15 June).
“Philippine Airlines will have a long way to go for recovery,” the company said in a statement accompanying its earnings announcement. “The uncertainty of the situation still prevails, but news on the availability of COVID-19 vaccine brings hope that passenger traffic will be better than 2020.”
PAL Holdings said consolidated revenue at the airline fell 64 percent to 55.3 billion pesos last year due to travel restrictions imposed to prevent the spread of the novel coronavirus. It is working on the final stages of a restructuring plan, including court-assisted protection, to improve the capital structure and meet obligations, it said. PAL Holdings had around US$6 billion in liabilities as of end-December.
The 2020 annual report released Thursday offered updates about Philippine Airlines’ cost-cutting moves, saying the airline has already started its fleet restructuring in accordance with a projected reduced demand in air travel. However it had not filed “any rehabilitation plan with any court” as of May 26. The airline will also rationalise its route network by stopping “certain ultra-long-haul routes and adjusting frequencies of its overall route network” as compared to 2019 levels, the company said.
Philippine Airlines, which is partly owned by Japan’s ANA Holdings, announced in October it was cutting 2,700 jobs, or a third of its workforce. It has a fleet of 97 Boeing and Airbus aircraft, 81 of which are leased. Operations will not be affected by any restructuring, the airline said, adding it will increase international and domestic flights as markets recover with easing travel restrictions.
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