PAL sees modest net profit, exit from receivership

MANILA (AFP) - Philippine Airlines said Thursday it expects to post a modest net profit of about 30 million dollars in its year to March 2008, by which time the flag carrier should have emerged from eight years in receivership.

"We want our income to be better but we're facing challenges given increasing fuel prices and competition," PAL president Jaime Bautista told reporters on the sidelines of the company's annual shareholders meeting.

PAL posted a net profit of 140.3 million dollars in the year to March 2007, the third straight year of profitability.

Chief finance officer Andrew Huang said the current year's profit would be much lower than last year's, which had been boosted by one-off gains.

Given the sustained profit record, PAL said it was preparing to seek regulatory approvals for its exit from receivership.

"We've reached a stage where we don't need the veil of protection that receivership provides," Huang said.

The carrier went into receivership in June 1998 after going to the brink of liquidation. Under the adminstrators overnight, PAL chairman and chief executive Lucio Tan injected 200 million dollars into the carrier which dropped unprofitable routes, downsizing staff and fleet.

Bautista said PAL has now "fully recovered and (is) ready to expand.

"We are now in the process of obtaining the necessary approvals from the Securities and Exchange Commission for our exit from rehabilitation," he said.

"PAL is also in the process of a quasi-reorganization of the company, which we expect to materialize before the end of the year."

Huang said PAL has repaid a total of 1.87 billion dollars of its debt over the past few years and will pay the balance of 950 million over the next seven years.

He said PAL has no plans to seek a restructuring of its outstanding debt, which will be settled using internally generated funds.