Philippine Airlines confirms $1bn revenue loss due to Covid-19
Philippine Airlines (PAL) has seen revenue shrink by nearly $1 billion since it suspended operations because of the coronavirus pandemic, the flag carrier’s parent confirms.
Airline president Gilbert Santa Maria was quoted in local newspaper The Philippine Star last week saying that the carrier has seen revenue slide by over $300 million per month – totalling nearly $1 billion – since suspending operations in March.
PAL Holdings says that the airline had been “more or less” generating revenues of $300 million per month and Santa Maria’s estimate is “not without basis”.
In The Philippine Star report, which was published on 22 May and re-reported comments made to local television news channel ANC, Santa Maria also stressed that the airline is “not in immediate danger of bankruptcy”, primarily due to a Ps15 billion ($296 million) cash injection from owner Lucio Tan, who is also PAL’s chairman and chief executive.
PAL Holdings’ 2019 financial results show it had received Ps11.4 billion from Buona Sorte Holdings (BSHI), a company owned by Tan, in the period to 31 December, followed by a separate $93 million (Ps4.7 billion) infusion in the first quarter of 2020.
In 2019, PAL Holdings posted an operating profit of Ps2.87 billion and revenue grew by 2.7%, to more than Ps154 billion. Net loss, however, widened from Ps4.33 billion in 2018 to Ps10.3 billion, partly due to the adoption of a new accounting standard.
Santa Maria has also suggested that PAL could reduce its fleet size and headcount. “For example, if we find out that we are going to need to return say 10-20% of our aircraft because demand just isn’t there – so we don’t have to pay rent, we’ll return the aircraft – well that means we’re going to have to reduce our flightcrews and our cabin crews by [a] similar amount because we will have fewer aircraft.”
He adds that while PAL plans to resume operations after the Philippines’ quarantine measures are lifted on 31 May, it will operate a limited schedule in June and July: 5-10% of its normal schedule of international flights to points in Asia and North America; and 20-30% of its previous domestic schedule.