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
Mabuhay Miles will continue to be earned and honoured
subject to the usual terms and conditions of use.