The Business Daily
Wednesday, September 2, 1998
Even with scaled down operations and a grant suspension of payments from the Securities and Exchange Commission (SEC), Philippine Airlines (PAL) continues to incur heavy losses.
In a disclosure to the SEC, the company stated that it incurred a net loss of P2.2 billion during its first quarter ending in June.
The airline, which is majority owned by taipan Lucio Tan, blamed the two crippling strikes staged by its unions for the firm’s unhealthy financial position.
“Revenues decreased by P1.3-billion or 14.5% mainly due to the labor strike staged by the Airline Pilots Association of the Philippines (ALPAP) in the first week of June 1998 wherein 59% of scheduled flights were unable to operate,” the company stated.
Although expenses for the period in review were trimmed by 13.30% compared to last year, PAL’s revenues were not enough for the firm to break even due to the depreciation of the peso and the increase in other financial charges.
PAL’s operating expenses were mainly centered on flying operations, maintenance and aircraft and traffic servicing.
The heavy losses pushed PAL’s total debt by P4 billion from the time it filed for rehabilitation with the SEC to P89 billion, which PAL attributed to increased obligations under capital lease and on account of foreign exchange adjustments and accrued expenses.
Total assets stood at P92.80 billion after the first quarter, representing an increase of 1.92% compared with the same period last year. The amount gives the company enough liquidity to cover its debts.
PAL is currently putting in place its “Plan 21” program which will double its number of flights to the US and domestic destinations.
The five-man interim receivership is expected to submit its final draft to the SEC on Sept. 21.
However, several petitions against the company – including a P719-million claim being made by the PAL Employees’ Association – is causing some problems for the committee which might again ask for a second extension on the deadline given by the SEC. Rodel A. Alzona
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