Philippine Airlines on Friday said it has completed its financial restructuring under its Chapter 11 bankruptcy filing in the U.S. as it committed to restore routes and add more flights to many of its destinations.
PAL said it emerged from its Chapter 11 proceedings, which allowed the company to undergo financial restructuring, within four months as it reaffirmed its role as the Philippines' only full-service airlines with the largest international network.
“Philippine Airlines 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,” said PAL director Lucio Tan III, quoting PAL chairman and CEO Lucio 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," he added.
As part of its renewed operations, PAL said it would restore more routes and increase flight frequencies in its destinations, including the resumption of regular flights to multiple cities in mainland China, full regularization of flights to Australia and the commencement of historic new services to Israel.
PAL filed a Chapter 11 bankruptcy in the U.S. in September 2021 to pare down its debt by "at least" $2 billion (P102 billion) and returning some aircraft, including wide-body jets, to cut back on costs," it said in a video message on its website. It also planned to secure another $150 million (P7.6 billion) in debt after emerging from Chapter 11.
PAL said its Plan of Reorganization, which was approved by the U.S. restructuring court last Dec. 17, provides for over $2 billion (P102 billion) in permanent balance sheet reductions from existing creditors.
It also allowed for improvements in PAL's critical operational agreements and additional liquidity, including a $505 million (P25.7 billion) investment in long-term equity and debt financing from the airline's majority shareholder.
“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,” said Gilbert Santa Maria, PAL President and Chief Operating Officer.
“Above all, we thank our customers for their support, and the Filipino people for keeping faith in their flag carrier through the entire restructuring process," he added.