To finance spin-off, outsourcing, PAL obtains $50-M credit line

Manila Bulletin
September 9, 2011

MANILA, Philippines — Flag carrier Philippine Airlines (PAL) has sealed an agreement with Credit Suisse to help finance part of the P2.5-billion spin off/outsourcing program set to take effect on October 1, 2011.

PAL chief finance officer Jose Gabriel Olives said the European bank agreed to lend PAL US$50-million which the airline will use to pay the separation and other transition benefits of close to 2,400 workers affected by the spin off/outsourcing.

“The agreement has been signed. All affected workers from PAL’s catering, ground handling and call center reservations units can rest assured that they will be paid in full by October 2011 as promised,” said Olives.

The PAL CFO said that aside from Credit Suisse, other PAL creditors fully support the airline’s spin off/outsourcing program that seeks to restructure and make the airline leaner and more competitive in the long-term. He stressed that PAL will proceed with the spin off/outsourcing as scheduled.

“Of course, management will maintain the status quo if the Court of Appeals issues a restraining order. But to date, we have received no such order preventing us from carrying out the spin off/outsourcing which has been upheld as valid by the Department of Labor and Employment and the Office of the President,” he said.

Olives added that PAL’s service providers SkyKitchen Philippines, Inc. (catering), SkyLogistics Philippines, Inc. (ground handling) and SPi Global (call center) are busy processing the applications of PAL personnel who accepted job offers.