The parent company of Philippine Airlines, PAL Holdings, booked a record 73 billion pesos (US$1.51 billion) loss in 2020 as the COVID-19 pandemic severely impacted the global aviation sector. The company said its management and stakeholders are working on the final stages of a comprehensive restructuring plan for the airline to survive. The flag carrier has drawn on bridge funding and support from its majority shareholder, deferred payments to lessors as well as lenders and suppliers, and carried out a retrenchment program.
In the aftermath of the court hearing, acting CEO Chansin Treenuchagron and Directors Chaiyapruk Didyasarin, Chakkrit Parapuntakul, and Boontuck Wungcharoen all announced their resignations from the Thai Airways board late Tuesday.
Several other Southeast Asian airlines have also sought restructuring plans and court-assisted debt relief. Recently Thai Airways had its own plan approved by a court on 15 June. Garuda Indonesia is as well seeking a deal to suspend loan payments to creditors and lessors and Malaysia Aviation Group has won a court approval to restructure billions of dollars in debts.
“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’s flights and operations will not be affected in any restructuring,” the company said in the statement. “We will increase our international and domestic flights as the market recovers with an easing of travel restrictions.”
Philippine Airlines 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. Philippine Airlines has started its fleet restructuring in accordance with a projected reduced demand in air travel. The airline will also rationalize 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.