Philippine Airlines is planning a major restructuring of its activities, which supposedly involves running to court to request compensation from paying creditors and holding the airline afloat.
The declaration of Dominguez was accompanied by that of PAL, which said that a comprehensive plan for recovery and restructuring is ongoing, all but suggesting plans to seek court involvement. Strictly speaking, after the health scare derailed travel plans and forced fare refunds, the rehabilitation process has been underway for months. It includes efforts to slash 2,700 jobs or nearly 35% of its 7,800 workers reported last month, as well as to forfeit some 20 leased airlines to cut costs.
What is new and probably a dramatic step-up in cost-cutting steps, is a study from Nikkei Asia which said PAL would ask the court for some sort of creditor security. The precise begging, The Philippines has opposed bailing out businesses brought down to their knees by the pandemic, unlike Southeast Asian countries such as Malaysia and Thailand.
However, the PAL proposal just reveals the strong financial cost of the pandemic on the aviation sector, 5 months after the Philippines reopened the economy and some local and foreign flights with it. In addition to PAL, Cebu Air Inc., a discount airline, is reportedly raising $500 million in new money to deal with the pandemic. For its part, the Lucio Tan-led firm said it will begin to gradually increase flights as limitations are steadily lifted, but a sustainable turnaround remains impossible with patrons still terrified of traveling.
Morever, PAL Holdings Inc., the parent of the carrier, widened its net loss by 53.4 percent year-on-year to P7.9 billion in the third quarter. Year-to-date net losses have risen to P28.8 billion, more than three times the losses of P8.5 billion in the same period last year.