PAL Holdings Inc., the operator of Philippine Airlines, said Monday the delivery of 13 new aircraft would be delayed by up to 10 years as it waits for the recovery of the travel sector from the impact of the global pandemic.
PAL, the airline unit of tycoon Lucio Tan, said it remained in the red in the first half because of the travel restrictions related to COVID-19 pandemic. It said the aircraft delivery schedule was revised to align with the forecast recovery of travel demand.
The flag carrier said the 2020 and 2021 aircraft deliveries were postponed and rescheduled for delivery by 2026 to 2030. PAL in July this year returned two aircraft to its lessor.
PAL said the remaining aircraft for delivery as of December 2020 included 13 Airbus 321-231 NEO, with one scheduled for delivery in December 2021 and the remaining 12 aircraft to be handed over between 2022 and 2025.
“The restrictions imposed by the Philippine and foreign authorities compelled PAL to make further adjustments, including flight cancellations, to its limited operations. National Capital Region was put under enhanced community quarantine until Aug. 20, 2021,” PAL said.
The Philippine government also imposed a travel ban from ten countries including Indonesia, Malaysia, Thailand, India and United Arab Emirates to prevent the spread of the highly transmissible Delta coronavirus variant that first emerged in India.
PAL said total comprehensive loss amounted of P18.04 billion in the first half, down 18 percent from P22.02-billion comprehensive loss in the same period last year.
Consolidated revenues in the six-month period declined by 51 percent to P18.04 billion from last year’s P36.82 billion because of the effect of continuing COVID-19 pandemic which started in mid-March of 2020.
Passenger revenue amounted to P11.62 billion in the first half, while cargo revenues amounted to P5.53 billion.
Consolidated operating expenses decreased by 48.6 percent to P26.83 billion from P52.16 billion a year ago because of the significant reduction in the number of flights operated.
Manpower costs declined as a result of PAL’s retrenchment program in mid-March and expenses related to grounded aircraft which were recognized this year under other charges which also contributed to the decrease in operating expenses.
Philippine Airlines announced in February a company-wide workforce reduction program covering about 2,300 employees, or 30 percent of the airline’s workforce.
Prior to the retrenchment, PAL chose to implement temporary furloughs and flexible working arrangements to hold off job cuts as long as possible and ensure that its employees continued to receive salaries and benefits, particularly medical benefits, during the height of the pandemic.