PAL parent resumes trading as flag carrier mounts comeback

The operator of Philippine Airlines (PAL) returned to a strong reception from the stock market following a nine-month hiatus that saw the flag carrier emerge from bankruptcy and a recovering, albeit changed, aviation industry.

PAL Holdings Inc. ended its first day of trading on Monday up 9.26 percent.

“Investors may have taken positively the company’s prospects over the coming months, as it looks forward to 2022 as a comeback year. We’ll still have to see, though, in the coming days if the optimistic mood persists,” Timson Securities Inc. head of online trading Darren Pangan said.

Shares of the flag carrier’s parent settled at P6.61 apiece, stronger by 56 centavos. The benchmark index, meanwhile, rose by 0.13 percent.

PAL Holdings’ shares were last traded on June 16, 2021, closing at P6.05.

The Philippine Stock Exchange (PSE) halted trading on PAL Holdings’ shares after the latter’s independent auditor, SyCip Gorres Velayo & Co., denied to provide an opinion on its 2020 financial report showing P71.8-billion losses and mounting debts as it struggled with a pandemic-induced slump.

Financial restructuring

This put the airline operator in violation of the amended Securities Regulation Code’s Rule 68, which requires an auditor’s opinion to prove that the company’s financial statements were fairly presented and in accordance with the generally accepted accounting principles.

The PSE lifted the trading suspension on PAL’s shares after the company reissued last week its 2020 annual report to reflect the progress of its financial restructuring process.

In December 2021, PAL announced its exit from a voluntary Chapter 11 bankruptcy process in the United States as it completed a financial restructuring plan that eliminated $2.1 billion worth of obligations.

Opening at P6.05, PAL shares traded as high as P6.96 yesterday.

Volume rose by 32.7 percent to 147,300 while trading value improved by 45.7 percent to P977,604.

Upbeat sentiment

“We’ll have to see in the coming weeks if support at P6 [per share] holds, otherwise P7 is considered its nearest resistance area to watch,” Pangan added.

Regina Capital Development Corp. managing director Luis Limlingan, meanwhile, said that PAL Holdings also benefited from the upbeat sentiment toward the aviation sector amid the anticipated surge in travel.

“Generally, the airline industry is slowly picking up with the increase in demand as evident by more flights being served,” he said. “Of course there have been headwinds because of the high price of oil, but it has not deterred travelers so much. At least for now.”

Philstocks Financial Inc. senior research analyst Japhet Louis Tantiangco agreed, noting that the “easing of travel restrictions and the reopening of the economy is seen to boost tourism which in turn would help our air transportation sector including PAL.” INQ