PAL Airlines (Santiago de Chile) has been declared bankrupt by a Santiago court following a petition lodged by a local jet-fuel supplier. In its docket, Air BP Copec claimed it was owed CLP388 million (USD 622,352) in unpaid fuel bills by the defunct carrier.
Other creditors that have approached the courts for relief include the Chilean Treasury, PAL's pilots, Calama airport operator Sociedad Concesionaria El Loa S.A, local logistics firm Blue Express, and the Caja Los Andes building society.
Prior to its suspension of operations in September last year, PAL Airlines CEO Fernando Musiet said the airline had been hit hard by unfavourable market conditions chief among them a slowdown in the carrier's bread-and-butter market, the mining sector. In addition, a weakening Chilean Peso had driven up the airline's fuel costs, he added.
Though it had over USD10 million in unpaid debt, management repeatedly denied rumours they would file for bankruptcy, claiming the airline's difficult financial situation could be remedied by a restructuring programme. Among other drastic capital-raising measures considered were the sale of the airline's Air Operators Certificate (AOC), its brand and its MRO facility.
