Philippine Airlines posted a net loss of 16.6 billion pesos (US$330.9 million) in the six months ended June 30, compared with a net loss of 20.7 billion pesos a year ago, its parent PAL Holdings said Monday (23 August) in a filing to the Philippine Stock Exchange. The airline, like all other carriers, has suffered greatly from the near shutdown in aviation due to the COVID-19 pandemic. The airline also announced it has returned two of its aircraft to a lessor last month and deferred deliveries of new passenger. The airline said revenue fell 51 percent to 18 billion pesos during the period.
“The group’s liquidity situation became more critical in 2020 and 2021 due to severely weak passenger sales and revenue as an adverse effect of the COVID-19 pandemic,” the company said in a statement. “The COVID-19 outbreak and the measures taken by the Philippine and foreign governments have caused disruptions to PAL’s passenger operations, resulting to temporary suspension and limited operations of its flights both for domestic and international routes.”
To ensure business continuity, the company is embarking on a restructuring plan as the decline in the airline’s revenue has put significant strain on the group’s liquidity position. Total capital deficiency stood at 86.2 billion pesos as of the end of June, it said. Ahead of a restructuring plan, PAL has drawn on bridge financing from its major shareholder, carried out a retrenchment program, implemented cost-cutting measures and deferred payments through the forbearance of lessors, lenders and suppliers.
PAL Holdings saw its operating expenses decrease by nearly 49 percent to 26.83 billion pesos from 52.16 billion pesos as a result of the significant reduction in the number of flights operated. The company said manpower costs also declined as a result of its retrenchment program in mid-March. PAL said expenses related to grounded aircraft, which were recognised this year under other charges, also contributed to the decrease in operating expenses. Consolidated total liabilities of the company went up to 300.93 billion pesos due to the increase in notes payable as a result of additional short-term loans. PAL earlier said it is considering a pre-negotiated court-rehabilitation in an overseas jurisdiction as part of its financial restructuring.
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