A reforming chief operating officer who successfully helped steer Philippine Airlines through the Chapter 11 process is looking for work after falling out of favor with the airline's majority owner and chief executive officer. Philippine Airlines COO Gilbert Santa Maria was "let go" last week with the majority owner's son-in-law temporarily installed in his place.

Philippine Airlines COO loses his job after steering the airline through the Chapter 11 process

Billionaire octogenarian Lucio Tan is the main man at Philippine Airlines. The airline is majority-owned by a holding company called PAL Holdings which Mr Tan ultimately controls. As Chairman, President, and Chief Executive Officer, Lucio Tan is a hands-on kind of airline owner.

Gilbert Santa Maria was appointed to the COO (Chief Operating Officer) position in mid-2019. Before taking on the role, Mr Santa Maria worked as COO at Ibex. In 2019, Philippine Airlines was losing money, and the new COO was expected to change this. However, early in 2020, COVID-19 struck. By the end of March 2020, Philippine Airlines had suspended all flights.

While the airline soon managed to get back in the air, the financial turmoil deepened. In September 2021, Philippine Airlines filed for Chapter 11 bankruptcy in New York with the support of its lenders. The airline had already let go of 35% of its workforce by this point.

Some radical surgery soon followed. In addition to cutting overall fleet size by 25%, Philippine Airlines wanted to cut $2 billion in borrowings via a court-approved restructuring plan. Lucio Tan agreed to tip in over US$500 million in equity and debt financing, with another $150 million coming from new investors. Before entering into Chapter 11, some 19 lessors had lease agreements with the airline covering about 49 aircraft,

All the while, Philippine Airlines kept flying. The airline exited Chapter 11 at the end of 2021. Having done the hard yards, it looked like Mr Santa Maria had outlived his usefulness.

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Photo: Getty Images

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Multiple agendas at play at Philippine Airlines HQ

Local media are reporting Mr Santa Maria's management style put quite a few Philippine Airlines' employees offside, including some with close ties to Lucio Tan. Local reporter Maria Stella F. Arnaldo, writing for Skift, described it as a,

"...coterie of associates (at the airline) constantly undermining Tan and his lieutenant’s decisions."

But Arnaldo also reports decisions made by executives like Mr Santa Maria would often be overruled by Tan at the behest of family members and others in the billionaire's favor.

The end result is that Gilbert Santa Maria was abruptly shown the door in late January. Lucio Tan's son-in-law, Captain Stanley K. Ng, was installed as acting COO while Santa Maria's permanent replacement is found. While Mr Tan lauded Santa Maria's steering the airline through the Chapter 11 process, he said that the now-former COO had also resigned from all other positions and directorates with his companies, with Stanley K. Ng taking over the roles.

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Philippine Airlines Photo: Getty Images

Insiders ask whether the acting COO is up to the job

Mr Santa Maria's demise comes only a month after telling another Filipino media outlet that quitting was never an option, saying, “If you’re drowning, your choice is fighting to live or just allowing yourself to die. It’s not really a choice, right?"

Mr Tan's decision to bounce his well-regarded COO is raising plenty of eyebrows in Manila. His son-in-law's ability to pilot aircraft isn't questioned. However, some ask whether he is up to the COO role, especially as it requires some tough decision-making and standing up to the boss - his formidable father-in-law.

But Lucio Tan is hoping for the best. After introducing employees to his new COO, he asked employees to support his son-in-law as he faced "immense challenges."

“I am optimistic that he will be able to execute the recovery plan and build on the momentum of the success of the financial restructuring,” Mr Tan said.