In sealed caskets, onboard a Philippine Airlines A330 aircraft, the remains of at least 200 Filipinos from Saudi Arabia, 49 of whom died of COVID-19, arrived at the Ninoy Aquino International Airport one late morning of July.
It must have been difficult for the crew to be on the nine-hour flight – sad, disturbing, and macabre. For how could it not? One lifeless body is already one death too many. But there would be more PAL flights carrying the dead back home to Manila.
Other flights were easier as they were filled with distressed, but alive overseas Filipino workers – from Milan to Maldives and many places in between.
Chartered by the government, Lucio Tan-owned Philippine Airlines has been bringing home OFWs from different corners of the world who wanted to leave their host countries ever since COVID-19 ripped through the globe.
But in between bringing home the dead and the living, the four star carrier was facing its own pandemic of sorts since the start of 2020, coming from a very difficult year before.
Indeed, 2019 wasn’t exactly the airline’s best; a foreshadowing of sorts, a portent of things to come. It was a seemingly cursed year for the 79-year old company, putting it in a precarious situation when COVID-19 struck.
While its latest cycle of financial troubles started in 2017, the year 2019 was life-altering for PAL. It saw the company grapple with a Netflix-like edge-of-your-seat saga, characterized by drastic management changes, family-related squabbles, loud swearing and shouting in its executive meetings, paralyzing policies, and the sudden departures of some esteemed members of its board of directors, including Kapitan’s old guards.
Put these all together with COVID-19 as the final blow, PAL, like many giant airlines across the globe, found itself right smack in the worst turbulence it ever had to face.
Some predicted its death in March because of heavy cash burn as a result of huge passenger refund requests and no new revenues. Its debt is now at $6 billion.
But a combination of luck, perhaps divine intervention, and $135 million in fresh funds from its chairman El Kapitan, once upon a time the country’s richest man, has enabled the company to keep going.
It will soon join other airlines, including Chile’s LATAM, Avianca and Miami Air that are all seeking creditor protection through a Chapter 11 filing in the United States. If approved, PAL will, in essence not be forced to pay its mounting debts immediately, but over a period of time.
Chapter 11 in the US Bankruptcy Code generally provides for reorganization of a corporation. Under this chapter, a debtor proposes a reorganization plan to keep its business alive and pay creditors over a period of time. Nineteen lessors have exposure to PAL for 48 aircraft, or half of its 99-strong aircraft fleet, according to FlightGlobal.
PAL is targeting to make the filing in January next year.
Many non-US airlines have turned to Chapter 11 because the ability to bind creditors to US court jurisdiction, which is respected globally, puts teeth in the terms of the restructuring, according to global law firm Freshfields Bruckhaus Deringer.
PAL’s management, led by its president Gilbert Santa Maria – a non-airline executive, but with a history of successful corporate turnarounds – hopes to exit Chapter 11 in March.
It is hoping that in the knick of time – if its stars are aligned – PAL would be out of Chapter 11 and would be able to pop champagne bottles by March 15, 2021 to celebrate its 80th anniversary.
Business as usual
In a town hall meeting last week, PAL assured employees it would be business as usual for the airline even during restructuring.
“PAL will continue to operate and fly during restructuring. There will be no impact on passengers – full continuity, no disruption,” management said.
In fact, PAL wingwoman Cielo Villaluna said the carrier has already readied flights for this month and beyond to Los Angeles, San Francisco, Toronto, New York, etc.
Post-Chapter 11, PAL envisions a more efficient and competitive operation with stronger finances and lower debt.
Employees
But the collateral damage is huge, employees included. PAL is reducing its 6,000-strong employee headcount by 35 percent.
Will PAL make it through the turbulence? Only time will tell, but if it successfully exits Chapter 11, it would have to face its new chapter with so much more professionalism and better management than before. Clearly, the effect of bad decisions in the past, including those years when it was in government hands, has piled up and made PAL the troubled airline that it is now. This has hurt its employees most of all because they were the first ones to be let go.
Moving forward, PAL’s employees, who risk life and limb to bring home their fellow Filipinos – dead or alive – during these difficult times, with or without hazard pay – deserve a more efficient company and not one that is run like a family-owned sari-sari store with pilferage, leaks and all.
For now, PAL’s saga continues, but eventually and with the right decisions by its core team that would advance the interests of the greater good, including its employees and the public, PAL may successfully emerge through the turbulence and at the right time, gloriously touch down again as seamlessly as its pilots do on the runway.
Iris Gonzales’ email address is eyesgonzales@gmail.com. Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com