Tuesday, December 15, 1998

PAL Asked to Return Planes

Philippine Daily Inquirer
Tuesday, December 15, 1998
Tina Arceo-Dumlao

Three foreign leasing companies are seeking the return of the aircraft they leased to the Philippine Airlines Inc. (PAL) despite the latter’s submission of a rehabilitation plan.

GPA Group Plc., General Electric Capital Corp., and Airlines Finance Ltd. said in a memorandum filed with the Securities and Exchange Commission that they wanted PAL to return and deliver the leased assets to the Shannon International Airport in Ireland.

The lessors also asked the SEC to prohibit PAL and all persons acting with it or on its behalf from using the leased assets while these remain in PAL’s possession.

PAL, however, is keen on retaining the four B737-300 aircraft and is set to negotiate with the lessors for the extension of the lease agreement since their planes are used for domestic operation.

The three leasing firms terminated the lease agreements with PAL due to inability to pay the rentals under the lease agreement.

The lessors said they have the right to recover their leased assets and terminate the agreement should PAL fail to perform its obligations including the payment of rent.

PAL, however, included the four aircraft with serial numbers 24680, 24681, 24464 and 24770 in the list of aircraft that will continue to be used under its rehabilitation program.

The rehabilitation plan submitted last week by PAL showed that it would retain 22 plains out of the 52 in its current fleet.

PAL plans to return two B747-200 planes to Nora Leasing Inc., four A340-200 planes to A340 Leasing Ltd., four A300-B4 planes to AI Leasing II Inc., one B737-300 plane to KG Aircraft Leasing Ltd., 10 Fokker-50 planes to Aircraft Financing and Trading BV, and one SD-360 plane to Fortis Phils. (3735) Ltd.

PAL plans to sell four of its A300-B4 planes, one B737-300 plane, two A340-300 planes and one A330-300 owned by Paladin Aviation Ltd.

PAL will be left with four B747-400, two A340-300, seven A330-300, three A320-200, six B737-300 and one King Air.

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