PAL Reports P2 Billion Losses

Philippine Daily Inquirer
Wednesday, September 2, 1998

Philippine Airlines, which has been devastated by recent strikes, said yesterday it lost P2.2 billion in the first quarter of the fiscal year mainly due to the work stoppages.

PAL officials said a 22-day strike by its pilots in June dealt the heaviest damage, canceling two-thirds of its flights and causing revenue losses of about P200 million a day.

The airline said its losses also rose due to soaring dollar-denominated payments and continuing lease payments on unused planes, which have not yet been returned.

In financial report submitted to the Securities and Exchange Commission, PAL said its liabilities increased to P26.67 billion in the first quarter of the year started April from P9.83 billion in the preceding quarter.

In the fiscal year, the national flag carrier reported a loss of P8.08 billion.

PAL is seeking to restructure its debts and has obtained permission to suspend payments to domestic and international creditors amounting to $2 billion while it prepares a rehabilitation plan.

The plan includes layoffs, the disposal of most the airline’s planes and a sharp reduction of flights.

The airline fired all the striking pilots after they ignored a government return-to-work order.

At the height of the strike, PAL laid off 5,000 of its more than 13,000 workers to minimize its losses. It also halted an ambitious $4 billion reflecting and modernization program.