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Philippine Airlines files for Chapter 11 bankruptcy in the U.S.
September 6th 2021
Philippine Airlines (PAL) has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in the Southern District of New York. Read More » The airline said it had reached agreements with a majority of lessors, lenders and other creditors for US$2 billion in payment reductions and other changes in a permanent restructuring of the balance sheet. There also will be a $505 million capital injection into the carrier through new debt and equity funding from existing shareholders and domestic commercial banks that will provide sufficient liquidity during recovery. As well the carrier has secured $150 million of additional debt financing from global private investors to facilitate post-restructuring activities. The fleet will be cut by 25%. At June 30, PAL had 95 aircraft, 15 owned and 80 under lease. "We are grateful to our lenders, aviation partners and other creditors for supporting the plan. It empowers PAL to overcome the unprecedented impact of the global pandemic which has significantly disrupted businesses in all sectors, especially aviation, and for us to emerge stronger for the long-term,” PAL owner, Lucio Tan, said in a statement. All of the flag carrier's flights will operate as normal, PAL said, with tickets, vouchers, refund applications and Mabuhay frequent flyer miles to be honoured. The airline's parent company, PAL Holdings, and Air Philippines Corporation (PAL Express), were not included in the Chapter 11 filing.
