Lucio Tan admits PAL on course for crash landing even after infusing P16B in last 5 months

Bilyonaryo Lucio Tan admits Philippine Airlines is on the verge of bankruptcy even after pumping in P16 billion in cash into the company which has lost P18 billion in the last three years.

In its 2019 annual report released only yesterday, PAL Holdings Inc., citing the coronavirus pandemic which has shut down global travel since March 2020, said: “A material uncertainty exists that may cast significant doubt on the Group’s (PAL) ability to continue as a going concern.”

PAL made the grim outlook even as Tan, through Buona Sorte Holdings, Inc. (BSHI), has pumped in P15.75 billion into the company – P11.1 billion as of December 2019 and P4.65 billion in the first quarter of 2020.

These are Tan’s cash advances as partial payment for the $600 million or P30 billion equity infusion approved by PAL‘s board in October 2019 but is still awaiting approval from the Securities and Exchange Commission

While PAL cited the coronavirus pandemic for pushing it to the verge of bankruptcy, the company has been in deep financial trouble since 2017.

In 2019, PAL reported a record high loss of P10.2 billion, its third year of red ink after losing P2.84 billion in 2018 and P4.61 billion in 2017.

PAL‘s total liabilities rocketed to P312.931 billion, up 66 percent from P188.51 billion in 2018 as the airline loaded up on long-term debt by 123 percent to P210.34 billion.

No wonder Tan has join Lance Gokongwei of Cebu Pacific and Mikee Romero of Air Asia Philippines in asking for a staggering P8.6 billion subsidies every month form government to save them from bankruptcy.

But is PAL worth saving or worth keeping in the same hands?

P8.6B per month in dole outs: Lucio Tan, Gokongwei, Mikee Romero asking for taxpayers’ money to rescue PAL, CebuPac, Air Asia from bankruptcy