Tycoon Lucio Tan poured in at least P15.2 billion into Philippine Airlines, making it safe from immediate bankruptcy, according to PAL president Gilbert Santa Maria.
Santa Maria told the ABS-CBN News Channel (ANC) on Thursday (May 21) that one-third of the capital infusion, or about P5 billion, was deployed this year to keep the airline afloat during the COVID-19 pandemic, which has grounded air travel.
“Without that liquidity, Philippine Airlines would probably not be here anymore,” Santa Maria said.
For now, PAL is “not in immediate danger of bankruptcy” but Santa Maria noted that prospects remained dim.
He said the carrier was expected to exit the lockdown by the end of this month with revenue losses of about $1 billion while recovery for the airline industry could take a few years.
“We are hanging on. We are waiting to fulfill our mission as the flag carrier,” Santa Maria said.
He said PAL is also not considering any near-term job cuts after laying off 300 employees, or 5 percent of its workforce, last February.
“At this point in time, it will be extremely inhuman of us to drop our employees on the streets while a pandemic is raging,” Santa Maria said.
“The reality is demand is probably not going to recover for about two years so we will have an excess of employees. The question is going to be what the trajectory of the recovery will be,” he added.
PAL had survived past crises and it was prepared to do the same this time around.
“Philippine Airlines is almost 80 years old. We have a great deal of muscle memory, a great deal of experience embedded in our employees,” Santa Maria said.
The lifting of strict quarantine measures by the end of this month will allow PAL and other local carriers to restore some flights.
Santa Maria said the airline expects to reopen with 5-10 percent of its international network and 20-30 percent of local flights by June.
“We will slowly ramp up as demand picks up,” he said, noting that destinations will include transpacific flights to Los Angeles and San Francisco apart from regional flights to Japan and Singapore.
The interview with ANC came a day after operator PAL Holdings said losses in 2019 ballooned to P10.3 billion, marking its third consecutive year in the red.
Through the industry group Air Carriers Association of the Philippines, PAL and other major domestic airlines are also seeking the government’s help in accessing emergency credit lines to help them survive the pandemic.