Philippine Airlines (PAL) president Gilbert Santa Maria said no further job cuts were being planned as the flag carrier bets on the return of passengers and steady growth in cargo flights that were deemed critical to its multiyear path to recovery.
Santa Maria said PAL would also exit Chapter 11 bankruptcy in the United States within the year after “intense” negotiations with creditors and lessors, the majority of whom eventually agreed to support its $2-billion debt restructuring.
Santa Maria gave the assurance to PAL’s workforce, which was reduced by 30 percent earlier this year, as the airline implements a new business plan to survive the global health crisis.
“We’re already done with the job cuts,” Santa Maria said during a rare media briefing on Monday.
The PAL chief, who was in New York to oversee the early stages of the Chapter 11 process, said this view could change if the pandemic drastically worsened business conditions.
But he explained that PAL was preparing for the long haul even as the company expects prepandemic demand to return no sooner than 2024 or 2025.
New capital
With fresh capital, a leaner balance sheet and a smaller fleet of 70 aircraft from over 90 planes, Santa Maria said they wanted to fly to new destinations, including Tel Aviv in Israel, and revive more local routes.
He said PAL might also consider converting some of its aircraft to dedicated cargo freighters given the strong demand for transpacific shipments of medical, automobile and electronic equipment.
PAL chief financial officer Nilo Thaddeus Rodriguez said another priority was to improve customer loyalty and boost their Mabuhay Miles rewards program.
Gov’t help
There were other financial reasons to do so, he explained.
As part of the $655 million in new capital being raised from owner Lucio Tan and other investors, Rodriguez said PAL needed $150 million to support operations after exiting Chapter 11.
The collateral backing this “exit facility” included PAL’s planes and its Mabuhay Miles program, he said.
Malacañang said Monday that the government had been helping the beleaguered PAL by waiving certain fees and it might later provide loans to it from its financial institutions.
Presidential spokesperson Harry Roque said the government had been coming to the aid of the flag carrier because it needed this for the repatriation of Filipinos and the delivery of vaccines and other pandemic supplies.
“I’ve confirmed that the government has waived many charges, including landing fees and aerodrome fees,” Roque said at a press briefing.
Roque made the statement after lawmakers called on the administration to support PAL during its restructuring process after it filed a bankruptcy petition in New York. INQ