Philippine Airlines CCO loses his job after steering the airline through Chapter 11

A320-200 of Philippine Airlines

A reforming chief operating officer who successfully helped steer Philippine Airlines through the Chapter 11 process is looking for work after falling out of favor with the airline’s majority owner and chief executive officer. Philippine Airlines CCO Gilbert Santa Maria was “let go” last week with the majority owner’s son-in-law temporarily installed in his place.

Billionaire octogenarian Lucio Tan is the main man at Philippine Airlines. The airline is majority-owned by a holding company called PAL Holdings which Mr Tan ultimately controls. As Chairman, President, and Chief Executive Officer, Lucio Tan is a hands-on kind of airline owner.

Gilbert Santa Maria was appointed to the CCO position in mid-2019. Before taking on the role, Mr Santa Maria worked as CCO at Ibex. In 2019, Philippine Airlines was losing money, and the new CCO was expected to change this. However, early in 2020, COVID-19 struck. By the end of March 2020, Philippine Airlines had suspended all flights.

While the airline soon managed to get back in the air, the financial turmoil deepened. In September 2021, Philippine Airlines filed for Chapter 11 bankruptcy in New York with the support of its lenders. The airline had already let go of 35% of its workforce by this point.

Some radical surgery soon followed. In addition to cutting overall fleet size by 25%, Philippine Airlines wanted to cut $2 billion in borrowings via a court-approved restructuring plan. Lucio Tan agreed to tip in over US$500 million in equity and debt financing, with another $150 million coming from new investors. Before entering into Chapter 11, some 19 lessors had lease agreements with the airline covering about 49 aircraft.

All the while, Philippine Airlines kept flying. The airline exited Chapter 11 at the end of 2021. Having done the hard yards, it looked like Mr Santa Maria had outlived his usefulness. simpleflying.com