By Revin Mikhael D. Ochave, Reporter
PHILIPPINE Airlines Inc. (PAL) announced before the new year the completion of its financial restructuring and disclosed plans to add more flights in 2022.
The flag carrier said in a statement late Friday that it exited Chapter 11 proceedings after its voluntary filing, adding that it now has a reorganized fleet and is better capitalized for future growth.
“PAL successfully completed its financial restructuring within four months, in contrast to other airlines that remain in the Chapter 11 process more than a year after filing in 2020,” it said.
To recall, PAL filed for a voluntary petition for relief under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court for the Southern District of New York on Sept. 3.
The airline previously said that the bankruptcy protection filing will let it “successfully restructure and reorganize its finances to navigate the coronavirus disease 2019 (COVID-19) crisis and emerge as a leaner and better-capitalized airline.”
PAL said its plan of reorganization, which secured the approval of the US court on Dec. 17, provides for more than $2 billion in permanent balance sheet reductions from existing creditors.
The plan also provides for improvements in its critical operational agreements and additional liquidity, including a $505-million investment in long-term equity and debt financing from PAL’s majority shareholder.
“The airline’s consensual restructuring plan was accepted by 100% of the votes cast by its primary aircraft lessors and lenders, original equipment manufacturers and maintenance, repair, and overhaul service providers, and certain funded debt lenders,” PAL said.
“Under the newly effective recovery plan, PAL has the option to obtain up to $150 million in additional financing from new investors,” it added.
Further, PAL reiterated its commitment to fulfill all refund obligations.
“The company has cleared over 99% of past refunds and is now back to normal processing times for refunds, except for some 2020 cases that require validation procedures mostly involving third party providers,” PAL said.
Following its exit from Chapter 11, PAL said it would restore more routes and increase flight frequencies with the easing of travel restrictions and reopening of borders, including the resumption of flights to cities in mainland China, full regularization of flights to Australia, and commencement of new services to Israel.
The airline will also expand its cargo business including the conduct of all-cargo flights and will offer “year-round great value fares and competitive promotional offers.”
“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,” PAL Director Lucio C. Tan III said.