Philippine Airlines went belly-up last September 23 because of financial problems precipitated by a restless labor force. The debilitating labor problems saw more than 5,000 ground staff, flight attendants and about 400 pilots given their walking papers. Subsequent to the closure, management and the unions met and forged a deal that would ensure labor peace for the next 10 years. This paved the way for the re-opening last October 7. Only domestic flights were flown using nine aircraft, a mix of A330s, A320s, B737s and a Fokker 50. The route network has been steadily expanding. International flights were to have started October 18, but this was postponed until PAL could get assurances from its creditors that its aircraft would not be seized. When PAL's imminent closure was announced in the middle of September, US creditors seized two Boeing 747-400s as they landed in LAX and HK.
Cathay Pacific is seriously looking at buying a 40 percent stake in PAL. This also includes management of the airline. CX is going through the PAL's books right now and has completed the initial stages of its audit. Talk has it that with that CX needs to shell out only US$130-M for 40%, assuming it takes over the $2-B debt of the airline. The brunt of that $2-B is owed to aircraft leasing firms. PAL recently acquired 36 new aircraft, a mix of Boeing 747-400s, A340s, A330s and A320s. Some of the orders have been cancelled and many of the planes were due to be returned to the leasing companies, but with PAL's re-opening, the airline decided to hold on to them.
Interestingly enough, the Philippine government allowed Cathay to fly some key domestic Philippine routes in the two weeks that PAL was closed. CX didn't make money, but they did get to test the waters.