PAL losses since bankruptcy filing reach P2.89B

FLAG carrier Philippine Airlines (PAL) ended October, two months since its Chapter 11 filing on Sept. 3, with a loss of $27.87 million, or P1.40 billion, resulting in a cumulative loss of $57.42 million, or P2.89 billion.

The airline’s end-October report to the United States Bankruptcy Court for the Southern District of New York, as signed by PAL Chief Financial Officer Nilo Thaddeus P. Rodriguez, showed it had a gross income of $122.95 million for the month.

However, cost of goods sold reached $119.32 million, resulting in a gross profit of $3.63 million.

PAL reported $6.07 million in selling expenses, $6.69 million in general and administrative expenses, and $1.91 million in other expenses.

PAL filed its October operating report on Nov. 15, according to a copy of the document from the airline’s claims agent Kurtzman Carson Consultants LLC.

To recall, PAL ended September with a loss of $29.56 million, or P1.5 billion. It had a gross income of $91.75 million for the month.

The airline said the cost of goods sold from Sept. 3 to 30 reached $90.42 million, resulting in a gross profit of $1.33 million.

The US Bankruptcy Court for the Southern District of New York is expected to decide next month on either to approve or reject the reorganization plan of PAL.

The deadline for filing objections to the plan is Dec. 10, while the confirmation of the plan hearing will commence on Dec. 17.

PAL hopes to exit the Chapter 11 process before the end of the year.

PAL also expects to exit the recovery phase by the end of 2022, as operating activities “generate more consistent positive monthly cash flow,” it said.

It anticipates to generate an operating income of $220 million in 2022 and $364 million in 2023.

PAL Holdings, Inc. (not included in the Chapter 11 filing) had said that billionaire Lucio C. Tan’s private firm Buona Sorte Holdings, Inc. (BSHI) would inject “fresh and additional capital” amounting to P12.75 billion ($255 million) into the listed parent company of PAL.

BSHI would also provide a five-year loan of $250 million to PAL.

For the nine months to September, PAL Holdings’ attributable net loss was reduced to P21.83 billion from a loss of P28.85 billion last year. Gross revenue went down by 29% to P32.16 billion from P45.29 billion previously. — Arjay L. Balinbin