New Year, new chance for Philippine Airlines

·3 min read
A Philippine Airlines Boeing 767 airplane sits at a gate at Los Angeles International Airport on May 24, 2018. (Photo: DANIEL SLIM/AFP via Getty Images)
FILE PHOTO: A Philippine Airlines Boeing 767 airplane sits at a gate at Los Angeles International Airport on May 24, 2018. (Photo: DANIEL SLIM/AFP via Getty Images)

By Annalisa Burgos

The head of Philippine Airlines (PAL) believes the flag carrier is on course for recovery in the new year.

After navigating a turbulent year and a half during the coronavirus crisis, Philippine Airlines received approval from the US Bankruptcy Court of the Southern District of New York on Dec. 17 for its reorganization plan – a turnaround strategy Gilbert Santa Maria had been developing pre-pandemic, when he took over as president in July 2019.

The company filed for US Chapter 11 bankruptcy protection in September and expects to complete the process this week.

“Our creditors have given up a couple billion dollars of value. I appreciate that, though they're not particularly happy about the state of affairs that led to this,” Santa Maria said. “But we're grateful and they're grateful that we can continue to do business with them going forward.”

Ironically, Santa Maria says the very crisis that devastated the global tourism industry was the wake-up call PAL bosses needed to sign off on his restructuring plan.

The carrier is considered a vital lifeline for the Filipino diaspora, a role underscored during the pandemic. When COVID wiped out tourism revenue, the government hired the carrier to repatriate millions of Filipinos who found themselves stranded across the globe.

“That kept us going,” Santa Maria said. “The Philippine government, they bought charters and they bought tickets, and so did the governments of Canada, United Kingdom, Australia, the United States, a few other European nations that had us sweep up their citizens from different corners of the Philippines, fly them to a big airport where their planes can pick them up, or in the case of Canada, the UK, Australia, New Zealand, the U.S., we flew them home on our aircraft. They paid for the privilege, we gave them a great service, the cash kept us going.”

Another critical source of income were cargo flights of personal protective equipment to and from the Philippines, United States and across Asia.

When asked why he thinks the Philippine government didn’t give the carrier a bailout, Santa Maria said perhaps officials believe the carrier didn’t deserve it.

“Once we figure out how we can actually stay profitable, then maybe the next time this happens, they’re going to be more sympathetic,” he said.

Upgrading outdated technology, downsizing its fleet and focusing on profitable routes are some of the ways PAL hopes to reverse years of losses.

“We hope we don't have a chapter 22. We hope we don't have to go back in," Santa Maria said. “The main task for us now is to take advantage of this second chance at life." 

A lot will depend on the pandemic, he added: “Hopefully it just ends and we can start bringing people back here for fun reasons.”

Annalisa Burgos is a freelance journalist with 20 years of experience covering Asia and the United States. Connect with her on Twitter and Instagram at @annalisaburgos and on Facebook: facebook.com/annalisaburgosnews. The views expressed are her own.

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