The Department of Transportation (DOTr) has accepted the offer of Philippine Airlines (PAL) to settle P6 billion in navigational dues it has owed the Civil Aviation Authority of the Philippines (CAAP) and Manila International Airport Authority (MIAA) for more than seven years.
In a joint statement with DoTr, PAL said it also commits to keep all transactions updated and current with CAAP and MIAA, both agencies under DOTr.
The airline said it agreed to settle to “manifest its trust and confidence in President Duterte’s administration.”
President Rodrigo Duterte on September 27 called out PAL chairman and chief executive officer Lucio Tan to pay PAL’s liabilities in 10 days or Ninoy Aquino International Airport (NAIA) Terminal 2—PAL’s exclusive flight base at NAIA since 1992—would be shut down.
A DOTr press release followed the President’s statement, saying it sent PAL letters as early as August 2016, which demanded full payment of all unpaid navigational charges.
PAL responded that it was ready to submit a compromise agreement, noting “this issue on alleged unpaid navigational charges involves complex legal issues which PAL has been trying to thresh out with the Authority (CAAP) for years.”
The flag carrier, which had recovered from four years of losses in 2014, returned to a decline in net income in 2016 to P3.945 billion from P6.460 billion recorded in 2015.
For the first quarter of 2017, PAL reported a total comprehensive income of P904.7 million, a significant downturn from P2.707 billion registered in the same period last year.
