Friday, May 24, 2024

Philippine Airlines exits Chapter 11 bankruptcy

Philippine Airlines (PAL) has emerged from Chapter 11 proceedings, just under four months after the flag carrier filed for bankruptcy protection in New York.

In a statement PAL said that it was “reinvigorated for the future”, with a reduction of over US$2 billion in debt from existing creditors, and an injection of $505 million in long-term equity and debt financing from the carrier’s majority shareholder.

PAL said that it had “successfully completed its financial restructuring within four months, in contrast to other airlines that remain in the Chapter 11 process more than a year after filing in 2020”.

As previously reported, the airline has reduced its fleet size by over 20 per cent and cut some unprofitable routes, although it said that it would remain the only carrier offering nonstop flights from the Philippines to the US, Canadian East and West coasts, Hawaii, Brisbane and Melbourne.

PAL said it would also offer “the largest network of flights from the Philippines to multiple cities in Japan, Australia and the Middle East, along with convenient schedules to Hong Kong, Korea, Taipei, Singapore, Thailand, Indonesia, Vietnam and Malaysia”.

No mention was made of the airline’s London service, which was suspended in early 2020 following the onset of Covid-19, and had looked likely to be permanently cut as part of the restructuring plans. When Business Traveller checked, weekly flights between London and Manila were listed on PAL’s website over the coming weeks.

The carrier said that it would look to restore more routes and increase flight frequencies “as travel restrictions ease and borders reopen, including the resumption of regular flights to multiple cities in mainland China, full regularisation of flights to Australia and the commencement of historic new services to Israel”.

“This is a celebratory moment for PAL, for all our partners and stakeholders, and for our personnel who sacrificed much while working successfully to keep the airline flying,” said Gilbert F. Santa Maria, PAL President and chief operating officer.

“There are immense challenges ahead, but we look forward to tackling them as a reinvigorated Philippine Airlines, better positioned for strategic growth to continue serving our customers” he added.

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