Philippine Airlines (PAL) and all other airlines are on the brink of bankruptcy because of the coronavirus pandemic.
This was declared by PAL president and chief operating officer Gilbert Sta. Maria who also admitted that the airline would have long crashed and burned if bilyonaryo Lucio Tan had not injected P15 billion into the flag carrier.
In an interview with ANC’s Kathy Yang, Sta. Maria revealed that PAL has been losing P1.5 billion every month since the Philippines and the rest of the world on a travel lockdown in March 2020.
Sta. Maria estimated that P50 billion revenues have been wiped out since February when COVID-19 started dragging down demand fro air travel.
“All airlines are on the brink of bankruptcy because of COVID-19. The 2019 report reflects a financial situation which I picked up when I joined the company last year,” said Sta. Maria who took over in June 2019 following the shock retirement of 26-year PAL veteran Jaime Bautista.
Sta. Maria was adamant that PAL was not “in immediate danger of bankruptcy” despite losing P18 billion in the last three years, P10.2 billion in 2020, the worst in its 79-year history.
Sta. Maria downplayed PAL‘s atrocious 2020 performance saying “a good chunk of our losses” was due to a change in accounting rules “which treats the rented aircraft as if it belongs to us so we have to be charged with depreciation.”
“We have to reflect it as if it were a liability, therefore our losses ballooned, these are non cash losses,” he said.
Sta. Maria feels fortunate that Tan dug deep into his pockets and advanced half of PAL’s proposed P30 billion equity infusion still pending with the Securities and Exchange Commission.
“Without that liquidity, PAL would not be here anymore,” said Sta. Maria.