Philippine Airlines files for US bankruptcy protection

Flag carrier Philippines Airlines has filed for bankruptcy protection in the United States as the pandemic continues to hurt its operations.

Photo from PAL Facebook page

PAL seeks to strengthen its financial position

In a statement issued Saturday, PAL said its key stakeholders gave the go signal to proceed with the filing for the US Chapter 11 in the Southern District of New York to pursue its restructuring plan.

Under the restructuring plan, which seeks to secure court approval, PAL aims to cut USD 2 billion (around PHP 99.7 billion) in borrowings, reduce its fleet volume by 25.

The local airline also hopes to raise a total of USD 655 million (around PHP 32.67 billion) in new funds from its majority shareholder and new investors.

We welcome this major breakthrough, an overall agreement that enables PAL to remain the flag carrier of the Philippines and the premier global airline of the country, one that is better equipped to execute strategic initiatives and sustain the Philippines’ vital global air links to the world. We are grateful to our lenders, aviation partners and other creditors for supporting the plan, which empowers PAL to overcome the unprecedented impact of the global pandemic that has significantly disrupted businesses in all sectors, especially aviation, and emerge stronger for the long-term, said Dr. Lucio C. Tan, PAL chairman and chief executive officer.

The Tan-led group said it would be business as usual for PAL as its flights—both passenger and cargo operations—would not be disrupted by the move.

PAL also seeks to boost its domestic and international flights as it keeps its bullishness for the travel rebound.

VIa: ABS-CBN