MANILA, Philippines – Philippine Airlines (PAL) has completed a financial restructuring plan that has written off $ 2.1 billion in debt, further strengthening its attempt to recover from losses due to the global health crisis.
In a statement Friday evening, PAL announced its exit from voluntary Chapter 11 bankruptcy proceedings in the United States. The emergence, which reached PAL’s end-of-year objective, comes four months after the plea was filed last September.
“Our mission as a flag bearer matters more than ever, and we are grateful for the chance to bounce back from the pandemic and continue to fulfill this mission to the best of our ability,” said PAL Director Lucio C. Tan III, who delivered the words of his grandfather, PAL president and CEO Lucio C. Tan.
PAL’s reorganization plan was approved by the U.S. bankruptcy court on December 17 after it garnered overwhelming backing from its creditors, including aircraft leasing companies, suppliers and major banks.
In addition to reducing $ 2.1 billion in debt, PAL has pledged to streamline its operations and return more than 20 aircraft, reducing its fleet to 70 aircraft.
Throughout the process, the Tan family pledged to invest $ 505 million in debt and equity to support the flag bearer. PAL said in the statement that it has an opportunity to raise up to $ 150 million in “additional funding from new investors.”
“This is a time of celebration for PAL, for all of our partners and stakeholders, and for our staff who have sacrificed a lot while working successfully to keep the airline flying,” said Gilbert F. Santa Maria, president and chief operating officer of PAL, in the same release. declaration.
“Above all, we thank our customers for their support and the Filipino people for remaining confident in their standard bearers throughout the restructuring process. There are immense challenges ahead, but we look forward to meeting them as a rejuvenated Philippine Airlines, better positioned for strategic growth to continue serving our customers, ”he added.
Following its emergence from the Chapter 11 process, PAL said it aims to organize flights to Israel and re-establish travel to Australia and China when borders reopen.
It also wants to expand codeshare and interline agreements with other carriers and expand its freight business.
Furthermore, PAL reiterated its commitment to fulfill all reimbursement obligations.
PAL said it has cleared over 99% of past refunds and has now returned to normal processing times for refunds “with the exception of certain cases in 2020 which require validation procedures primarily involving third-party vendors.”
“The Philippine national airline attributes the strong support of its creditors and shareholders, the cooperation of its industrial partners and the collective efforts of PAL employees around the world who have operated on several international and domestic routes throughout the year. restructuring period, ”said PAL.
Subscribe to INQUIRER PLUS to access The Philippine Daily Inquirer and over 70 other titles, share up to 5 gadgets, listen to the news, download from 4 a.m. and share articles on social media. Call 896 6000.