PAL keeps Ba2 rating; recovery story still under pressure

Moody’s cites stable market position and profits since 2022 but flags expansion risks and tight liquidity.

Moody’s has assigned a Ba2 rating to Philippine Airlines Inc., keeping the flag carrier in non-investment grade territory.

Moody’s said the rating reflects PAL’s role as the country’s national airline, with stable domestic and international market share and a defensible long-haul network.

The agency noted stronger financial metrics and a leaner cost structure after exiting Chapter 11 in 2021, marking continued recovery after its restructuring period.

It also flagged limits in scale versus global carriers, aggressive fleet expansion plans, and relatively thin liquidity buffers despite improving performance.

PAL has remained profitable since 2022, with debt expected to stay below 4.0x EBITDA in the next 12 to 18 months even as it continues to expand capacity, while support from the Lucio Tan group and aircraft lessors helps cushion funding needs.

 

 

Despite a 24% income surge and a defensible long-haul network, the PAL must now navigate 2026’s energy crisis and aggressive growth plans.

 

 

READ: