PAL Holdings, Inc., the listed operator of flag carrier Philippine Airlines (PAL), said it returned two aircraft to the lessor in July and delayed the deliveries of new aircraft, as the airline company continues to suffer from a decline in cash inflows amid the global health crisis.
“In July 2021, two aircraft were returned to its (PAL’s) lessor,” PAL Holdings said in its second-quarter report released on Monday.
“PAL’s aircraft delivery schedule was revised to align with the forecasted recovery of travel demand. 2020 and 2021 aircraft deliveries were postponed and rescheduled for delivery in 2026-2030,” it added.
The company also said that it is embarking on a financial restructuring plan to ensure business continuity.
On Aug. 10, global aviation data and analytics company Cirium said in an article posted on FlightGlobal, an aviation news and information website, that PAL’s “filing for US Chapter 11 bankruptcy protection has been further delayed after one of the banks providing financing for the process backed out.” Cirium cited two lessors “with exposure to the airline.”
The company said the health crisis and the measures taken by the Philippine and foreign governments disrupted its passenger operations, resulting in the temporary suspension and limited operations of both domestic and international flights.
“Consequently, the decline in revenue and cash inflows has put significant strain on the group’s liquidity position and on its compliance with certain loan covenants,” PAL Holdings added.
The listed company trimmed its second-quarter attributable net loss to almost P8 billion from a loss of P11.5 billion in the same period last year.
Revenues for the quarter from passenger, cargo, ancillary, and other business segments increased 106.4% to P9.7 billion from P4.7 billion in the same period in 2020.
However, expenses remained almost the same at P13.6 billion.
For the first half of the year, PAL Holdings cut its attributable net loss to P16.6 billion from a loss of P20.9 billion in the previous year.
Total revenues for the first six months dropped 51.1% to more than P18 billion from P36 billion in the same period a year earlier.
First-half expenses decreased 48.7% to P26.8 billion from P52.2 billion in the previous year.
PAL Holdings’ total capital deficiency was at P86.15 billion as of June 30, up by 26.5% “primarily due to the increase in deficit by 18.6% brought about by the consolidated total comprehensive loss for the first half of 2021.” — Arjay L. Balinbin