Philippine Airlines seeks to return A350s, B777s to lessors

As PAL Holdings considers seeking court protection from creditors while undertaking “comprehensive” debt restructuring, its subsidiary Philippine Airlines (PR, Manila Ninoy Aquino Int’l) is in talks with lessors to cut the size of its fleet, telling them that a Chapter 11 filing in the United States is among the options, anonymous sources close to the matter have told Bloomberg News. The carrier could return at least two Airbus A350s and four Boeing B777s in its fleet, some of the sources claimed. According to the ch-aviation fleets advanced module, Philippine Airlines currently operates six A350-900s, all of which are leased, and ten B777-300(ER)s, six of which are leased. The average age of the A350s is just 2.6 years, the B777s 7.2 years. The ch-aviation fleets ownership module shows that Avolon leases one of the A350s to the airline, Goshawk two of them, Park Aerospace Holdings one, and SMBC Aviation Capital two. The six B777s emanate from Avation (one), Castlelake (one), GECAS (one), and Voyager Aviation (three). As work continues on restructuring the various lease contracts, one of the sources said that two of the A350s were already in the process of being returned to lessors and will be redeployed to other carriers. However, another lessor has agreed with Philippine Airlines that the carrier keeps hold of one of the B777s and an A330. The only lessor of a B777 also providing other aircraft types to Philippine Airlines is GECAS, which also leases a single A330-300 to the troubled carrier. Privately-owned PAL Holdings is preparing for a pre-packaged bankruptcy, the sources said, with New York-based venture capital firm Seabury Capital advising on the restructuring. The company has posted losses since the first quarter of 2017, including a PHP29.03 billion peso (USD607 million) loss for the first nine months of 2020 – the most recent figures available, published in November. The Philippine government has said it does not want to take ownership of the country’s airlines, preferring that private banks assist instead. Philippine Airlines did not immediately respond to ch-aviation’s request for comment.