PAL is facing an uphill task to draw up an acceptable debt restructuring plan amid the coronavirus pandemic which has resulted in plunging demand, stricter global travel restrictions and anxious travellers opting to stay at home.
The pandemic has forced PAL to suspend flights, lay off a third of its employees and seek help from the government to survive this crisis and keep flying.
PAL suffered P29.03 billion in losses in the nine months to September, nearly three times the P7.86 billion loss incurred in the same period a year ago.
It also had P198 billion in lease and long-term debts.
From a P4.9 billion surplus in 2019, the flag carrier swung to a negative capital of P24.13 billion as of September.
“Philippine Airlines management and stakeholders continue to work on a comprehensive recovery and restructuring plan that will enable PAL to emerge financially stronger from the current global crisis,” the Tan-led airline said in a statement.
Tan has already pumped in P16 billion in cash into the airline, which had lost P18 billion in the past three years.
Nikkei reported that PAL has already notified the Department of Finance about its plan to shield its assets from creditors.
“PAL informed the DOF of their plans last week but gave no details on the assistance they may need from us,” Dominguez told Nikkei.
PAL said it would “make the necessary disclosures once details are finalized.”
“In the meantime, we continue to gradually increase our flights operated on most of our international and domestic routes in line with market recovery,” PAL said.