PAL Gets Ready to Soar After Exiting U.S. Bankruptcy

On New Year’s Eve, Philippine Airlines (PAL) announced that it has exited its voluntary Chapter 11 bankruptcy proceedings in the United States after its plan to slash $2.1 billion in debt from its balance sheet. The flag carrier first filed for bankruptcy in September to survive the challenges that the global pandemic has brought on the airline industry. Airlines that undergo the Chapter 11 process usually remain for over a year, but PAL was able to quickly achieve its restructuring positioning it for long-term growth.

“PAL has streamlined operations with a reorganized fleet and is now better capitalized for future growth,” explained the airline. The company’s fleet now stands at 70 planes after it committed to returning more than 20 aircraft. As part of the restructuring plan approved by the U.S. Court, PAL will also have an additional $505 million investment in long-term equity and debt financing from its main shareholder.

“PAL 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,” remarked PAL Director Lucio C. Tan III, who was quoting PAL Chairman and CEO Dr. Lucio C. Tan. “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.”

“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,” shared Gilbert Sta. Maria, PAL’s President and Chief Operating Officer. “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.”

Sources: Manila Bulletin, ABS CBN