Tuesday, February 22, 2011

Air Philippines restructures








Air Philippines restructures

Air Philippines Corp., the low-cost airline owned by beer and tobacco tycoon Lucio Tan, will restructure its equity to improve business operations and address the long-term viability of the company.

Air Philippines, which operates Airphil Express, said in a filing with the Securities and Exchange Commission that it will use the firm’s additional paid-in capital worth P6.1 billion to partially wipe out a deficit that stood at P6.8 billion as of end September 2010.

Air Philippines said the company also planned to generate additional revenues and reduce operating cost to boost operations.

It said it planned to tap the credit and capital markets to finance the equity restructuring, change fleet type to suit core markets and reduce manpower and overhead costs.

Air Philippines lost P941 million in the first nine months of 2010, up from the loss of P687 million posted in the same period last year, due to higher expenses.

Revenues totaled P1.9 billion, up 35 percent from P1.42 billion on year on higher passenger and cargo revenues. Expenses grew 31 percent to P2.9 billion from P2.2 billion on year.

Air Philippines said last year it was allotting $250 million for fleet expansion in two-and-a-half years and planned to add 18 Airbus 320 until 2012 to compete in the local aviation industry.

It said it would finance the fleet expansion partly by internal funds and the rest from the capital market.

Air Philippines is the country’s third largest airline, behind sister company Philippine Airlines and Cebu Pacific of the Gokongwei group, at the end of the first half of 2010 after carrying 676,686 passengers.

The airline hopes to increase its Airbus 320 aircraft fleet to 18 by 2012 and add more domestic routes like Vigan and Marinduque and regional routes, including Korea, Bangkok and Hong Kong.

The airline currently flies to Bacolod, Busuanga, Cagayan de Oro, Calbayog, Catarman, Caticlan (Boracay), Cebu, Davao, Iloilo, Jolo, Kalibo, Legazpi, Masbate, Naga, Ormoc, Puerto Princesa, San Jose(Mindoro), Singapore, Surigao, Tacloban, Tagbilaran, Tuguegarao and Zamboanga.








By

NEHA JAIN

      

   

     



            
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