Philippine Airlines (PAL) has successfully completed its financial restructuring through a Chapter 11 bankruptcy filing within four months, unlike other carriers that have been in the process since 2020.
See also: Philippine Airlines enters Chapter 11 restructuring process
During its reorganization, the Philippine flag carrier simplified its fleet by returning several aircraft to lessors, including the Airbus A350-900s it had recently taken delivery of, and eliminated long-haul routes such as New York (JFK) and London Heathrow (LHR).
The company plans to reduce permanently more than USD 2 billion of verified debts to existing creditors, improve core operations and add liquidity, including a USD 500 million investment. This represents long-term debt-equity financing with PAL’s major shareholders.
The airline’s restructuring plan was voted unanimously by major aircraft lessors, investors, equipment manufacturers, maintenance, repair and inspection providers, and certain creditors.
“Philippine Airlines is ready to help grow the Philippine local and international air travel markets to revamp the tourism industry, and meet the needs of global citizens, including the Philippines abroad, and actively contribute to the recovery of the country economy,” said Lucio C. Tan III Chief Executive Officer of PAL.
“We especially thank our customers for their support and the Philippine people for keeping faith in their flag carrier throughout the restructuring process. There are tremendous challenges ahead, but we look forward to tackling them as a revitalized Philippine airline, better positioned for strategic growth to continue serving our customers” said Gilbert F. Santa Maria, President and Chief Operating Officer of PAL.
PAL plans to reinforce its position as the Philippines’ only full-service airline with the largest international network, as it is currently the only Philippine carrier with non-stop flights to the United States, Vancouver (YVR), and Toronto (YYZ) in Canada, Hawaii, Brisbane (BNE) and Melbourne (MEL) in Australia.
Additionally, Philippine Airlines has the largest network of flights from the Philippines to Japan, Australia, and the Middle East with convenient connections to Southeast Asia and Hong Kong.
PAL has the opportunity to raise up to USD 150 million in additional funds from new investors and reaffirms its commitment to all payment obligations. The company has processed more than 99% of previous repayments and has returned to normal times, with the exception of a few cases requiring other types of procedures.
Philippine Airlines Inc. was the only group subsidiary included in the Chapter 11 filing; while PAL Holdings Inc. and domestic subsidiary PAL Express were not included in the financial restructuring filing.
