Philippine Airlines emerges from bankruptcy proceedings
Philippine Airlines in a statement released on December 31 said it has emerged from bankruptcy after a US court approved its plan to slash up to $2 billion in debt and obtain additional capital.
The national carrier of the Philippines had filed for Chapter 11 status to reorganise the company under the bankruptcy laws of the US, seeking relief from creditors as it tried to survive the devastation unleashed on the airline industry by the Covid-19 pandemic.
Its court-approved reorganisation plan includes a $2 billion debt reduction and additional liquidity of $505 million from its main shareholder, the airline said, adding that it also has the option to obtain up to $150 million in additional financing from new investors. The carrier’s main shareholder is PAL Holdings, a company controlled by Filipino business tycoon and billionaire Lucio Tan who is also the airline’s CEO and chairman.
The airline’s consensual restructuring plan was accepted by 100 per cent of the votes cast by its primary aircraft lessors and lenders, original equipment manufacturers and maintenance, repair and overhaul service providers, as well as certain long-term debt lenders.
“Philippine Airlines has streamlined operations with a reorganised fleet and is now better capitalised for future growth,” the statement said.
Pandemic caused air travel in the Philippines to collapse
Air travel in the Philippines collapsed by more than 75 per cent in 2020 due to travel restrictions imposed to contain the coronavirus, according to government data.
From 60 million domestic and international passengers in 2019, traffic plunged to just over 13 million in 2020.
Philippine Airlines said in September it had cancelled more than 80,000 flights since the pandemic started, wiping out $2 billion in revenue, and let go of more than 2,000 employees.
Restoring the international and domestic flight network
As borders reopen and travel restrictions ease, the airline said it will resume regular flights, including to cities in Mainland China and Australia.
It would also restore its international network, namely nonstop flights linking the Philippines to the US, the Canadian East and West Coasts and Hawaii, as well as to multiple cities in Japan and the Middle East, along with convenient schedules to Hong Kong, South Korea, Taiwan, Singapore, Thailand, Indonesia, Vietnam and Malaysia.
Domestically, Philippine Airlines seeks to re-establish its high-frequency domestic network with routes to the major cities of Visayas, Mindanao and Luzon, as well as inter-island services to the nation’s tourist hot spots and holiday islands, the carrier said.
Philippine Airlines in a statement released on December 31 said it has emerged from bankruptcy after a US court approved its plan to slash up to $2 billion in debt and obtain additional capital. The national carrier of the Philippines had filed for Chapter 11 status to reorganise the company under the bankruptcy laws of the US, seeking relief from creditors as it tried to survive the devastation unleashed on the airline industry by the Covid-19 pandemic. Its court-approved reorganisation plan includes a $2 billion debt reduction and additional liquidity of $505 million from its main shareholder, the airline said,...
Philippine Airlines in a statement released on December 31 said it has emerged from bankruptcy after a US court approved its plan to slash up to $2 billion in debt and obtain additional capital.
The national carrier of the Philippines had filed for Chapter 11 status to reorganise the company under the bankruptcy laws of the US, seeking relief from creditors as it tried to survive the devastation unleashed on the airline industry by the Covid-19 pandemic.
Its court-approved reorganisation plan includes a $2 billion debt reduction and additional liquidity of $505 million from its main shareholder, the airline said, adding that it also has the option to obtain up to $150 million in additional financing from new investors. The carrier’s main shareholder is PAL Holdings, a company controlled by Filipino business tycoon and billionaire Lucio Tan who is also the airline’s CEO and chairman.
The airline’s consensual restructuring plan was accepted by 100 per cent of the votes cast by its primary aircraft lessors and lenders, original equipment manufacturers and maintenance, repair and overhaul service providers, as well as certain long-term debt lenders.
“Philippine Airlines has streamlined operations with a reorganised fleet and is now better capitalised for future growth,” the statement said.
Pandemic caused air travel in the Philippines to collapse
Air travel in the Philippines collapsed by more than 75 per cent in 2020 due to travel restrictions imposed to contain the coronavirus, according to government data.
From 60 million domestic and international passengers in 2019, traffic plunged to just over 13 million in 2020.
Philippine Airlines said in September it had cancelled more than 80,000 flights since the pandemic started, wiping out $2 billion in revenue, and let go of more than 2,000 employees.
Restoring the international and domestic flight network
As borders reopen and travel restrictions ease, the airline said it will resume regular flights, including to cities in Mainland China and Australia.
It would also restore its international network, namely nonstop flights linking the Philippines to the US, the Canadian East and West Coasts and Hawaii, as well as to multiple cities in Japan and the Middle East, along with convenient schedules to Hong Kong, South Korea, Taiwan, Singapore, Thailand, Indonesia, Vietnam and Malaysia.
Domestically, Philippine Airlines seeks to re-establish its high-frequency domestic network with routes to the major cities of Visayas, Mindanao and Luzon, as well as inter-island services to the nation’s tourist hot spots and holiday islands, the carrier said.
