PHILIPPINE Airlines (PAL) will likely exit from a receivership this year, citing improved financial condition and favorable outlook for the airline sector.

President Jaime Bautista said the flag carrier is now in the process of obtaining the necessary approvals from the Securities and Exchange Commission (SEC) for its exit from rehabilitation and a quasi-reorganization of the company, “which we expect to materialize by December this year.

“After eight years under receivership, during which it established a solid track record of operational productivity and financial strength, we can now pronounce PAL fully recovered and ready to expand,” Bautista said.

PAL entered receivership in June 1998. The carrier said it is now the appropriate time to advance out of the SEC-supervised rehabilitation program.

Chief financial officer and senior vice president for finance Andrew Huang said going out of receivership does not necessarily mean that the company would have to pay its remaining obligations within the year.

“We will just be out of SEC’s supervised rehabilitation. But we will continue with the payment of our debts. The schedule of payment goes all the way to 2013-2014,” Huang said, adding that he hopes the nation’s flag carrier can settle its obligations ahead of schedule.

PAL paid $1.8 billion in principal and interest, said Huang.  Its outstanding obligations amount to $950 million.

“There is no plan to restructure the $950 million. Our plan now is to continue to pay it from internally generated funds. We do not need to borrow money to pay for that,” Huang added.

Each year, PAL forks out about $200 million in principal and interest payments.

“The difficulties that confronted us in the early days of our financial restructuring are clearly behind us. The airline’s fortunes have been revived,” Bautista said.

In particular, PAL posted dramatic productivity gains over the past eight years. Revenue per employee more than doubled, rising by about 10.5 percent yearly; asset turnover also more than doubled; and passenger load factor increased from 66.1 percent to 76.9 percent.

These enabled PAL to post operational profits for eight consecutive years, from 2000 to 2007, and net profits in six of those years, including a three-year stretch from 2005 to 2007 that culminated in a record profit of $140.3 million in the latest fiscal year.

PHILIPPINE Airlines (PAL) will likely exit from a receivership this year, citing improved financial condition and favorable outlook for the airline sector.

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