MANILA, 7 September 2021: Philippine Airlines will continue to fly and meet its customer obligations despite filing for Chapter 11 bankruptcy in New York last Friday.
Posting statements on palrecovery.com, the airline said: “We will continue to fly and to serve our customers throughout this process… PAL continues to increase domestic and international flights as travel demand recovers with the easing of travel restrictions, and we will roll out new products and services that help make flying safer and more convenient.”
The airline confirmed the latest flight schedules from Manila on its Facebook Page.
According to Bloomberg, the company aims to cut USD2 billion in borrowings through a proposed restructuring plan, which needs court approval and will allow the carrier to reduce its fleet capacity by 25%.
Philippine Airlines will also get USD505 million in equity and debt financing from its majority shareholder, as well as USD150 million of debt financing from new investors. The carrier claims to have obtained support agreements from 90% of its lenders.
The airline filed under US Chapter 11 rules, which lets a company continue to operate while it restructures. It is understood the airline also made a partial filing in the Philippines.
The restructuring plan will allow the carrier to reduce its fleet capacity by 25% and enable the airline to return a minimum of 20 aircraft and cut the workforce by 35%, the company’s management said in response to a Bloomberg news query.
The restructuring plan allows the airline “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 the airline in a statement.
PAL celebrates its 80th year of flying this year, but since 2017 it has suffered heavy losses, and the situation dramatically deteriorated during the Covid-19 pandemic
In a statement to customers and passengers, the airline said all passenger and cargo flights would continue to operate.
All current and future tickets and travel vouchers will be honoured, subject to the usual terms and conditions of use.
Passengers can continue to book and buy tickets from the airline’s website, mobile app, ticket offices, contact centres and partner travel agents.
Mabuhay Miles will continue to be earned and honoured subject to the usual terms and conditions of use.