Saturday, January 22, 2011

Air Philippines seeks approval of SEC to restructure its capital

MANILA, Philippines – Air Philippines Corporation is seeking the permission of the Securities and Exchange Commission to use its additional paid in capital (APIC) to partially wipe out its deficit of P6.83 billion.

Documents show, the SEC’s financial analysis and audit division has already recommended the approval of the airline’s capital restructuring plan.

Under the plan, the airline will use its APIC amounting to P6.16 billion to wipe out a significant portion of its P6.83-billion capital deficit based on its interim audited financial statement as of September 30, 2010.

Air Philippines has undertaken that if its deficit as of December 31, 2010 turns out to be less than P6.16 billion, the difference will be reverted to the APIC.

The airline plans to open more new air routes by expanding its aircraft fleet to compete in the country's competitive aviation industry.

Air Philippines chief executive Cesar Chiong said they will increase the airline’s Airbus A320 aircraft from just three to 18 by 2012 and add more domestic and regional routes.

"We're looking at destinations like the Republic of Korea, Bangkok and maybe Hong Kong," Chiong said. Domestic routes like Vigan and Marinduque are also being considered.

Chiong said the company expects six new A320s to arrive this year while six more will be delivered in 2012. Air Philippines' first two A320s were given to it by sister company Philippine Airlines (PAL) while six arrived last year.

Aside from the Airbus jets, Air Philippines also has eight turbo propeller planes used to fly on domestic routes. A total of $250 million will be spent for the lease of the new aircraft.

Chiong said the company preferred to acquire A320 jets, which are the same planes used by its sister PAL, to keep expenses down since a fleet with just one type of airline is easier and cheaper to maintain.

Air Philippines is already the country's third largest airline, behind Gokongwei-led Cebu Pacific and PAL, at the end of the first half of the year after carrying 676,686 passengers.


NEHA JAIN                                                                                                                

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