Andrzej Jeziorski/SINGAPORE
The Philippine Securities and Exchange Commission (SEC) has approved the resumption of payments by debt-ridden Philippine Airlines (PAL) on four leased Boeing 737-300s.
Monthly payments of $220,000 for each aircraft will restart to Airplanes Finance, GE Capital Aviation Services and the GPA Group. The go-ahead staves off attempts by the three companies to repossess their aircraft.
The lease companies say they are owed millions of dollars in overdue lease payments since PAL stopped making installments on its debts last June after being put in receivership by the SEC. The airline's debts total more than $2.2 billion.
In February, PAL reached an agreement with lessors to resume monthly payments, with an understanding that the aircraft would be repossessed immediately if PAL defaulted again.
PAL is now preparing a revised rehabilitation plan, to be presented to the SEC on 15 March, after its original plan was rejected by the airline's creditors in December.
The airline has phased out its 10 leased Fokker 50s that served as workhorses on its secondary domestic network.
The 54-seat turboprops were introduced in 1988, leased from Fokker associate Aircraft Financing and Trading.
PAL says that it found the aircraft "extremely uneconomical to operate" because of high maintenance and operating costs. The former strict regulatory regime also forced the airline to operate unprofitable, token, services to remote destinations.
The withdrawal of the Fokker 50s leaves PAL with an all-jet fleet of 22 aircraft - the optimal fleet specified in the carrier's earlier rehabilitation proposals. Its fleet comprises four Boeing 747-400s, two long-range Airbus A340-300s, six medium-range Airbus A330-300s, three Airbus A320-200s and seven Boeing 737-300s.
Source: Flight International
