NICHOLAS IONIDES / SINGAPORE
Additional aircraft and new routes will result from a revised five-year plan from the troubled Asian carrier
Philippine Airlines (PAL) is seeking to lease a further three long-haul widebody aircraft for use on new flights to Europe as it continues to rebuild its fleet and international route network following near bankruptcy in 1998/99.
President and chief operating officer Avelino Zapanta told Flight International that PAL wants to resume services to unspecified European points that were dropped in 1998. Airbus A340-300s and Boeing 747-400s are being considered for the services, both of which are currently operated by the airline.
PAL has been in receivership since mid-1998, when it nearly collapsed under the weight of a $2.2 billion debt and temporarily dropped all international services.
The carrier was saved from liquidation in 1999 by a five-year rehabilitation plan approved by key creditors and the Philippine Securities and Exchange Commission. The scheme provided for a reduced fleet and route network, the sale of non-core assets, a $200 million cash injection from shareholders and other cost-cutting measures.
Zapanta says the addition of aircraft and routes will be incorporated into a new five-year plan. This replaces the current one, which he says is "already obsolete".
"Cost items built into the rehabilitation plan are way off. We have to redo the budgets," Zapanta says, adding that fuel prices are much higher than anticipated and the local currency, the peso, is much weaker against the US dollar. "We have also added new destinations and increased our capacity earlier than we had expected," he says.
Meetings are to be held with key European creditors and PAL's receivership committee to seek approval for the new plan, Zapanta says. He adds that the carrier is hoping to get out of receivership 12 months earlier than called for, requiring it to reduce debt repayment schedules with major creditors, which were extended in its effort to avoid bankruptcy.
PAL's fleet was reduced to just over 20 aircraft from more than 50 as a result of its financial troubles but it has been steadily growing since last year and now numbers 32 aircraft. The carrier has resumed key international services over the past year but still does not have any flights of its own to Europe.
Zapanta says European flights may be relaunched through codeshare agreements under which PAL can be the operating carrier. He says "exploratory talks" are being held with Alitalia and talks may be started with Iberia.
Source: Flight International
