Losing P1.5B every month: We won’t be here anymore without Lucio Tan’s P15B emergency cash infusion

Losing P1.5B every month: We won’t be here anymore without Lucio Tan’s P15B emergency cash infusion

Philippine Air Lines (PAL) along with other airlines not just in the country but also in other country’s are in the brink if not total bankruptcy all because of the global pandemic brought about by the coronavirus.

Pal President and Chief Operating Officer Gilbert Sta. Maria who also admitted that the airline would have long crashed and burned if billionaire tycoon Lucio Tan had not injected P15 billion into the flag carrier.

In an interview with ANC’s Kathy Yang, Sta. Maria revealed that PAL was losing P1.5 billion every month since the country and the rest of the world on a travel lockdown in March 2020.

Philippine Air Lines' Lucio Tan
(photo credit to owner)

P50 billion revenues have been wiped out since February when COVID-19 started dragging down demand from air travel.

“All airlines are on the brink of bankruptcy because of COVID-19. The 2019 report reflects a financial situation which I picked up when I joined the company last year,” said Sta. Maria 

Sta. Maria was not losing hope that PAL was “in immediate danger of bankruptcy” despite losing P18 billion in the last 3 years, P10.2 billion in 2020 alone, the worst in its 79-year history of PAL.

The Pal president downplays the 2020 performance saying “a good chunk of our losses” was due to a change in accounting rules “which treats the rented aircraft as if it belongs to us so we have to be charged with depreciation.”
“We have to reflect it as if it were a liability, therefore our losses ballooned, these are non cash losses,” he said.
It’s a good thing that Lucio Tan can spare more for PAL and advanced PAL’s proposed P30 billion equity infusion still pending with the Securities and Exchange Commission.
“Without that liquidity, PAL would not be here anymore,” said COO Sta. Maria.

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