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A phoenix at sunrise
MANILA, Philippines — The Federal Court judge overseeing the PAL Chapter 11 matter openly and consistently commended the PAL team, from the First-Day Motions through the Second-Day hearings, DIP financing, Section 341 creditor meeting, disclosure statements, Plan Confirmation and Emergence sessions.
Airline Economics and Air Finance Journal awarded the restructuring the “Asia Pacific Deal of the Year” for 2021.
Buong pusong alaga
Very recently, a European expat and former finance executive for a large MRO (maintenance, repair and operations) provider recognized me, reminded me of our connection and commented that PAL’s restructuring had been a memorable act of “genius.”
It wasn’t genius.
It was love.
The success of the restructuring was the result of the work and sacrifice of thousands.
The young cabin crews who volunteered without hesitation at a time of greatest fear; who openly rejected an anonymous request for “hazard pay” in an early town hall; who volunteered to work in hospitals because few flights were available; who endured low pay during the years of crisis and who found themselves laid off first because they had been hired last – all were living the deep, heartfelt care at the core of the PAL brand.
A care that sits deep in the Filipino identity.
Employees voluntarily took fewer hours and gave up pay with few complaints.
PAL’s famously combative unions rallied around management, bound by the same faith that sees Filipino communities come together in mutual support in towns devastated by natural calamities.
No labor action, nor any of the usual theater of industrial relations, disrupted the purpose to serve the Filipino passenger through the worst of the crisis.
It wasn’t just corporate loyalty or patriotism.
It was family.
Thousands of small acts of care took place every day, on flights where crews first endured the inconvenience and hazard of dealing with contagion and then the tedium of quarantine.
The quarantines are long gone.
The small acts of care remain, especially for elderly Filipino immigrants who routinely make PAL the airline with the longest wheelchair queues in many airports to which it flies.
I’ve read reports of a purser who handed his spare uniform trousers to an elderly, incontinent Filipino man so he could keep his dignity; of crews who passed the hat for OFWs with nothing to bring home to their families; of impromptu birthday celebrations and of small care packages of extra snacks packed in barf bags for travelers with long journeys on wheels and boats still ahead. Stories of Filipinos being Filipino.
And while there will always be dickheads who might give passengers a bad time, I have found that they are the exception who prove the rule.
The heart of the Filipino
PAL’s aircraft are well flown by captains and officers whom a Boeing pilot-executive once described to me as having one of the best traditions of flying excellence anywhere.
In a world of automated landing systems, PAL pilots still routinely hand-fly the feather-light landings for which they have become known.
However, the interior passenger amenities of the aging PAL fleet have become increasingly ragged. In-flight entertainment systems are obsolete. Some seats don’t work properly. Some don’t work at all. And the toilets.
Through it all, the cabin crews patiently try to bring care and kindness to the passenger, while the pilots ensure a safe, direct flight home.
It isn’t the luxury ride of an Emirates or a Singapore.
But it is the same warmth and care you find anywhere you find Filipinos – a similar cultural expression to the familiar Filipino archetype who invites a stranger to share a humble meal with a simple:
“Kain tayo.”
Let’s eat.
Essentially saying: this may be all I have, but I’ll share it with you.
What doesn’t kill you
makes you stronger
As it had done before, PAL once again faced hazards to serve the country whose flag it carried.
Because PAL was a private enterprise, no government loans or bailouts were available.
But while the government gave no handouts other than the $4 million from the Bayanihan Act, it bought thousands of charter flights for repatriations and the carriage of thousands of tons of vaccines and urgent medical supplies.
And it paid its invoices on time, driven by a specific urgency to ensure that these flights would continue – one of the largest sustained repatriation efforts mounted by any government anywhere.
These government revenues gave PAL the liquidity and credibility it needed to convince creditors, suppliers, partners and other paying passengers that the earlier reports of PAL’s imminent demise were, to paraphrase Mark Twain, greatly exaggerated.
Management by Divine Intervention
On the scale of what we had to do at PAL, random chance occasionally made things fall our way.
I remember getting a call from the CFO early in the crisis, on a Wednesday, telling me that we no longer had enough cash to make payroll.
And, according to our plan, we prepared to shut down on Friday, starting with the early-morning transpacific arrivals, and then holding all departures until the end of the day, when we would announce the indefinite suspension of operations that would herald what seemed inevitable at the time.
But on Thursday night, he called again.
One of the clearinghouses had released just enough cash to make payroll.
And so, we kept going.
Something similar happened often enough that we began calling it “MDI”—Management by Divine Intervention.
It seemed an appropriate way to describe the universe appearing to put a finger on the scale for us while thousands prayed daily for PAL’s survival.
PAL had an old prayer regularly recited in Wednesday Operations Group meetings that began:
“Heavenly Father, who gave man the gift of wings and genius for flight…”
We even read the Surah Al Fatiha for our brothers and sisters of a different faith tradition when we assembled at dawn in March 2021 to celebrate PAL’s 80th birthday.
At the height of the pandemic, in the shadow of a PAL Airbus A330 on the apron of Terminal 2 at NAIA, as the sun broke over Manila, voices were raised in prayer for clear skies and fair winds to carry PAL safely home.
And it seems those prayers were answered.
Postscript
Over its 85 years, PAL has gone through a recurring cycle: investment in expensive new fleets, followed by years of mounting debt, desperate cost controls, crisis and resolution.
Until the manic cycle starts again.
I pray that PAL finally breaks the cycle, despite all the global challenges that bedevil commercial aviation.
Once again, ongoing conflicts in the Middle East have driven volatile fuel prices. Once again, global economic uncertainty has driven economic insecurity. Once again, political reality in the Philippines is driving economic weakness.
This time, I have some confidence that PAL will endure.
Its balance sheet is stronger, even as demand has weakened, costs have risen and financial performance has suffered. It is investing heavily in customer experience, primarily in upgrades and new planes. It is recalibrating its schedules, routes and pricing. It has joined the Oneworld Alliance. And it is still backed by
Kapitan.
It has the Philippines: its natural beauty and culture and neighborhood in Southeast Asia brings in global travelers; its challenged but still-growing economy enables more air travel and its diaspora sends Filipinos
around the world who step through the doors of PAL aircraft to find home.
And PAL still has its people whom I had the privilege of leading through what had been PAL’s greatest existential crisis, and for which honor I will always be grateful.
Perhaps millions of others, in the Philippines and beyond, should also share my gratitude that PAL’s people never gave up, found purpose in service through the darkest of times, and kept the great lady in the air.
