Billionaire Lucio Tan’s Philippine Airlines Plots ‘Comeback’ As Carrier Boosts Passenger, Cargo Flights

Philippine Airlines—controlled by billionaire Lucio Tan—is expanding passenger and cargo flights this year in the domestic and international markets to support the airline’s post-pandemic recovery.

“We look forward to a comeback year for Philippine Airlines and for our country,” Tan, chairman and CEO of the company, said on Tuesday as Asia’s oldest airline celebrated its anniversary. “Our 81st birthday marks a day of rebirth for PAL. We will make good use of our new life by delivering a stronger, more reliable and dynamic airline.”

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PAL, whose losses deepened during the pandemic as governments around the world restricted travel, exited from bankruptcy proceedings in late December after a U.S. court approved its restructuring plan to slash debts by more than $2 billion. As part of the restructuring, Tan injected $505 million in fresh capital into PAL, while the airline streamlined its fleets to about 70 wide body long-haul aircraft including Airbus A350s and Boeing B777s.

Starting this month, PAL is increasing scheduled flights by 52%, reflecting the company’s optimism that tourism will recover as the country reopens its international borders and the government eases Covid-19 restrictions. Along with the restoration of its passenger flights, the company said it also plans to develop new all-cargo routes between Asia, U.S., Canada and Australia to diversify its revenue streams.

The airline introduced all-cargo flights during the pandemic, with freight revenue expected to exceed $300 million revenues in 2021 (compared to just $193 million in 2018), PAL director Lucio Tan III, a grandson of the company’s biggest shareholder, said in his speech. “We converted passenger aircraft into freighters, without taking out any seats, so we could fly all-cargo services in prima markets,” Tan said. “Thus, PAL’s cargo network helped supply chains going and trade flowing.”

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Airlines were among the hardest hit by the pandemic in the past two years as governments around the world imposed lockdowns and restricted cross-border travel to curb the spread of Covid-19. The International Air Transport Association estimates airlines around the world will lose another $11.6 billion this year after incurring about $190 billion in losses in the past two years.

Tan, 87, —who emerged as PAL’s controlling shareholder in 1995 when he was appointed chairman—regained control of PAL in 2014 after buying San Miguel Corp.’s controlling interest in the airline. His real-time net worth has fallen to $1.2 billion from $1.9 billion when the list of the Philippines’s 50 Richest was published in September, according to Forbes data. Tan’s business empire also includes tobacco, spirits, banking and property.