The way the Los Angeles-based boss of Philippine Airlines talks about the airline industry’s demand for a monthly bailout of P8.6 billion, taxpayers are obliged to rescue the loss-making flag carrier owned by bilyonaryo Lucio Tan.
“As everybody in the world can see, the airlines are grounded because there is no demand, because we are all complying with government requirements to prevent the spread of the virus. So this is not our shareholders’ doing and this is not the doing our management team why Philippine Airlines is grounded,” said PAL president and COO Gilbert Sta. Maria in an interview with ANC’s “So it basically would be an injustice to require shareholders of any single airline to bear the brunt of the risks of this pandemic because we’re not allowed to fly,” he added.
For the record, PAL has been neck deep in red ink with a total of P18 billion in losses in the last three years, of which P10.2 billion it suffered in 2020, the worst in its 79-year history. Tan made a big bet on a massive refleeting program and it blew up in his face even before COVID-19 became a concern.
Tan, along with Lance Gokongwei of Cebu Pacific and Mikee Romero of Air Asia Philippines, are asking the government to give the industry P8.6 billion subsidies every month to cover working capital (P6.8 billion), wage subsidies (P1.3 billion), and navigational and airport fees (P500 million).
“The government has to tell us what terms they seek for this assistance. We’re not asking for subsidies, we’re asking for credit lines. We want to have liquidity again once revenue returns. We have zero revenues and very little abilities to pay fixed costs without tapping into equity,” Sta. Maria said.
“We assure taxpayers it’s not a handout coming at their expense. The only assurance we can give is, as long as we continue to fly and survive, that’s an obligation we are willing and eager to pay back,” he added.
All local and foreign travel have been closed since President Rodrigo Duterte declared Luzon under an enhanced community quarantine in March 2020.
Sta. Maria claimed PAL has been losing P1.5 billion every month since its planes have been grounded since March and that it has lost P50 billion in revenues since February.