Philippine Airlines Inc (PAL) expects to emerge from Chapter 11 bankruptcy before the end of the year, with a leaner fleet and fewer destinations, as a recovery in travel demand is not likely in the next few years, company president Gilbert Santa Maria said yesterday.
Majority owned by billionaire Lucio Tan (陳永栽), the carrier filed for Chapter 11 bankruptcy in New York on Friday with a lender-supported plan to help it recover after the COVID-19 pandemic devastated global travel.
It aims to cut US$2 billion in borrowings, will get US$505 million in equity and debt financing from existing shareholders and banks, as well as US$150 million of debt financing from new investors.
Philippine Airlines would trim its fleet to 70 planes from more than 90, with a “good number” of wide-body aircraft to be returned, Santa Maria told a news conference.
“The remaining fleet will be more than adequate to see our demand through until recovery,” which is not likely until 2025, he said.
No further job cuts are expected after the company reduced its workforce by 30 percent in March.
Airbus SE agreed to postpone deliveries of 13 narrow-body planes with an option to cancel some beyond 2026, Philippine Airlines chief financial officer Nilo Thaddeus Rodriguez said.
Singapore-based aircraft lessor Avation PLC welcomed the restructuring announcement, saying that it would support the process and has agreed on terms for Philippine Airlines to retain a Boeing Co 777-300ER.
“A successful restructuring will ensure that Avation’s aircraft will remain with PAL and that Avation will recommence collecting cash rent on the aircraft for the first time since mid-2020,” the London-listed company said in a statement.
“These permanent actions will enable Philippine Airlines to emerge from Chapter 11 in a few months with fresh capital, lower debt and a competitive cost structure,” Rodriguez said in a video posted on YouTube and aired before the news conference.
The Tan family firmly supports the restructuring process and vows to complete the carrier’s recovery, PAL director Lucio Tan III said in the same video message, reading a statement from his grandfather Lucio Tan.
The fleet reduction would mainly involve Airbus SE A350s, A330s and Boeing Co 777 aircraft, said Brendan Sobie, consultant at Sobie Aviation, who expects that the airline would remove premium economy seats.
Philippine Airlines is likely to focus on the domestic market as well as west coast North America, a traditionally profitable long-haul route, and North and Southeast Asia, Sobie wrote in an e-mail.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
RSS