Troubled Southeast Asia flag carrier Philippine Airlines has filed for bankruptcy as it battles more than $2 billion of debts.
Main picture Philippines Airlines aircraft credit Kentaro IEMOTO on flickr
The airline has filed for Chapter 11 restructuring in the USA as well as also filing in the Philippines.
“The Chapter 11 restructuring now gives us the opportunity to seal in the recovery and get back to a firm financial footing once and for all. We’re hopeful. We’re very encouraged that PAL is undertaking a “pre-arranged” Chapter 11 process where we go in with the strong support of our major creditors and the commitment of our shareholders, unlike most Chapter 11 scenarios.”
“We will continue to fly and to serve our customers throughout this process: it is business as usual for us. 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.”Philippines Airlines Statement
Earlier this year the airline announced plans to cut 2,300 employees, or 30% of the workforce by mid-March, this followed cutting 300 jobs in March 2020. Shares in the airline ceased trading on 18th June this year after posting a record $1.51 billion loss for 2020.
Since the news first broke late last week the airline has confirmed that the fleet size will contract by 25%, the airline’s owner, PAL Holdings, will provide US$505 million in long-term equity and debt financing and a further US$150 million in additional debt financing will come from new investors.
The airline has also agreed to delay or cancel orders for 13 Airbus A321neo aircraft. The airline will also return 22 aircraft, mostly Airbus and Boeing jets, to lessors.
The majority of airlines in Southeast Asia have struggled throughout the pandemic. Singapore Airlines had increased issues due to being purely an international carrier where many airlines managed to keep some domestic services running. Thai Airways had ongoing financial issues that came to a head with a major restructuring earlier this year.
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