Philippine Airlines exits chapter 11 bankruptcy
Philippines national flag carrier Philippine Airlines (PAL) has emerged from Chapter 11 bankruptcy protection after a US court approved the airline restructuring plan. The Ninoy Aquino International Airport (MNL)-based carrier said it would get rid of $2 billion in debt and raise fresh capital.
According to the International Business Times, Philippine Airlines sought bankruptcy protection from creditors in September as the airline looked for relief from the financial pressures following the COVID-19 pandemic. In a statement issued on Friday, December 31, 2021,
Philippine Airlines said that it would cut its debt load by $2 billion and at the same time add $505 million in liquidity from its main shareholder PAL Holdings, owned by business tycoon Lucio Tan. PAL also said that at the same time it had the option of obtaining a further $150 million from new investors.
Philippine Airlines cut its workforce by 2,000
The airline added that PAL has streamlined operations with a reorganized fleet and is now better capitalized for future growth.
When the coronavirus outbreak emerged in late 2019 and countries began imposing travel restrictions, the Philippines saw air travel collapse by 75%. From carrying 60 million passengers during 2019, passenger numbers plummeted to slightly over 13 million in 2020.
As a consequence of the virus, Philippine Airlines said that it had to cancel more than 80,000 flights wiping out $2 billion in revenue. It also said that as a result of COVID-19, it had to let 2,000 employees go.
Philippine Airlines wants to help the economy grow
When speaking about its emergence from bankruptcy after just four months, PAL Director Lucio C. Tan III, quoting PAL Chairman and CEO Dr. Lucio C. Tan, said the following in a company statement:
“Philippine Airlines stands ready to help grow back the Philippines local and international air travel markets in ways that renew the tourism industry, serve the needs of global citizens including overseas Filipinos, and contribute actively to the recovery of the Philippine economy.
“…Our mission as the flag carrier matters more than ever, and we are thankful for the chance to rebound from the pandemic and continue to fulfill this mission as best as we can.”
Also quoted in the statement was PAL President and Chief Operating Officer Gilbert F. Santa Maria, who said;
“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. Above all, we thank our customers for their support and the Filipino people for keeping faith in their flag carrier through the entire restructuring process.
“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.”
Now looking to the future and the reopening of borders, Philippine Airlines says it will soon resume flights, including ones to mainland China and Australia.
About Philippine Airlines
Founded in 1941, Philippine Airlines was one of the largest carriers in Asia before becoming one of the Philippines’ biggest corporate failures during the 1997 Asian financial crisis. PAL was forced to downsize its fleet of planes dramatically and lay off thousands of workers.
Now revamped and looking to rebuild, the aviation data and statistics website ch-aviation lists Philippine Airlines as having the following aircraft in its fleet:
- 4 x Airbus A320-200s
- 18 x Airbus A321-200s
- 6 x Airbus A321Ns
- 2 x Airbus A321NXs
- 11 x Airbus A330-300s
- 4 x Airbus A350-900s
