Philippine Airlines said it expects to register a loss this year mainly because of P6 billion worth of unpaid navigational fees and other charges to the government.
“It will affect our cash flow, we will have to borrow money to pay for it. That’s the impact, its additional cost,” PAL president and chief operating officer Jaime Bautista said, adding the airline would settle the debt before the end of the year.
Bautista said the airline was in talks with local banks to borrow money.
When asked if PAL would report a net loss this year because of the unpaid debt to the government, Bautista said, “ most probably, likely.”
PAL Holdings Inc., the parent firm of PAL, earlier reported a total comprehensive loss of P1.05 billion in the January-to-June period, a turnaround from a profit of P4.62 billion year-on-year.
Total revenues in the first half reached P67.76 billion, up 17.7 percent from last year’s P57.57 billion. Total expenses for the period increased 32.5 percent to P52.31 billion.
President Rodrigo Durterte earlier threatened to close the Ninoy Aquino International Airport Terminal 2 if PAL did not settle its unpaid navigational fees to the government.
PAL operates domestic and international flights at NAIA Terminal 2.
Bautista said PAL was finalizing a new proposal to the Manila International Airport Authority and Department of Transportation to build a new passenger terminal beside its current hub at the NAIA Centennial Terminal 2.
“So whatever issue on the Pagcor [Philippine Amusement and Gaming Corp. ] property will be resolved if our proposal is accepted by the DoT and approved by Neda [National Economic and Development Authority],” he said.
Pagcor had said PAL’s contract with a former management of the state-run gaming corporation only included the use of the rented property as “an aircraft parking ramp/apron facility.”
It said PAL, thus, was prohibited from using the leased premises for any other business or purpose, including the construction of a new terminal without prior written consent from Pagcor.
PAL plans to build a P20-billon passenger terminal at the former Nayong Pilipino complex, which could handle 12 million to 15 million passenger a year and feature aerobridges capable of serving 12 to 17 wide-bodied and single aisle jets.
PAL expects to start construction of the new terminal by December 2020 and operate it by July 2021.
NAIA’s four terminals are currently hosting 42 million passengers a year, 12 million or 40 percent more than their design capacity of 30 million.
Constructing a new, 89,000 square-meter air terminal north of NAIA 2 would help decongest the airport and provide PAL passengers much-deserved space, amenities and modern conveniences.
The proposed annex building will rise on a 16-hectare area adjacent to NAIA 2, comprising of the now-defunct Philippine Village Hotel, the former Nayong Pilipino complex and a property owned by Pagcor.
Aside from the passenger terminal, the complex will include a multi-level parking for 1,000 vehicles, a new cargo terminal and ground service facilities.