PAL shareholders continue to keep airline afloat

MANILA, Philippines — Philippine Airlines (PAL) said it continues to receive funding support from its shareholders to help keep the company afloat amid escalating losses due to the pandemic.

“The airline’s shareholders continue to provide funding support as PAL continues to undertake revenue generating and cost control measures as part of its business restructuring initiatives in the coming months,” the flag carrier said in a recent statement.

PAL early this year received additional deposits for future stock subscription from Lucio Tan’s Buona Sorte Holdings Inc. (BSHI) amounting to P6.27 billion.

This brings BSHI’s total infusion to PAL to P17.68 billion from 2019 up to end-June, based on PAL Holdings first half financial report.

In the nine months ending September, however, PAL’s losses continued to swell as operations were severely affected by global travel restrictions due to the COVID-19 outbreak.

PAL’s total comprehensive loss during the nine-month period ballooned to P29.03 billion, over three times more than the P7.86 billion recorded in the same period last year, while consolidated revenues plunged by 61.6 percent year-on-year to P45.29 billion.

For the third quarter alone, PAL said its comprehensive loss saw a 30 percent improvement compared to the loss posted in the second quarter, when local airlines were grounded for an extended period due to the pandemic.

However, third quarter losses ended considerably higher compared to the same period in 2019, “confirming the severe impact of the unprecedented drop-off in passenger travel this year.”

“Worldwide travel restrictions continue to hold down travel demand, preventing airlines from restoring most of their pre-pandemic flights,” PAL said.

The flag carrier served a total of 339,000 passengers in the third quarter, an improvement from only 92,000 in the second quarter.

PAL said its daily flight frequencies now average about 17 percent of pre-COVID frequency levels, marking a slow recovery in revenues and operations.

PAL previously announced a manpower reduction initiative that could affect up to 35 percent of the airline’s more than 7,000 workforce, which will combine voluntary and involuntary measures to be carried out within this quarter.

It has already let go of 300 people last March, 200 of whom were retrenched and 100 opted to retire early.

PAL’s 2020 and 2021 aircraft deliveries were postponed and rescheduled for delivery in 2022 to 2025