Philippine Airlines files for bankruptcy protection in US

  NEW YORK - Philippine Airlines on Friday (September 4 in UAE) filed for Chapter 11 bankruptcy in New York to help the Philippine carrier recover from the impact of the pandemic on global travel. Philippine Airlines will also complete a filing for recognition in the Philippines under the insolvency and rehabilitation law. Chapter 11 allows a company to restructure in order to keep its business alive. A restructuring plan will allow Philippine Airlines to cut its fleet capacity by 25 percent, and return at least 20 aircraft. Under Chapter 11, Philippine Airlines will undergo a proposed restructuring plan to allow it to pay its $2 billion in debt over time. The restructuring plan is subject to court approval. Philippine Airlines will also get $505 million in equity and debt financing from its majority shareholder, as well as $150 million of debt financing from new investors. Philippine Airlines already cut 35 percent of its workforce early this year, with many other airlines forced to do a similar measure as a response to the pandemic. The filing for bankruptcy protection comes after months of negotiations with stakeholders. Philippine Airlines’ billionaire owner Lucio Tan called the filing a “major breakthrough”. Tan said a restructuring plan will allow the airline to “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”. Philippine Airlines will continue to operate its passenger and cargo flights based on demand and travel restrictions. In the UAE, it has scheduled several special flights to bring home stranded Filipinos this September. CCP/Expat Media
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