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PHILIPPINE Airlines (PAL) revealed that its airline had emerged from the brink of bankruptcy. This comes after a US court approved Philippine Airlines’ plan to cut debt by up to US$2 billion and raise additional capital.
The Philippines’ national carrier filed for bankruptcy in the United States in September, seeking help from creditors as it tries to survive the devastation wrought on the aviation industry by the coronavirus pandemic.
“The court-approved reorganization plan includes a debt reduction of US$2 billion and additional liquidity of US$505 million from its major shareholders,” Philippine Airlines said in a statement quoted by Channel News Asia, Sunday (1/02).
“The company also has the option of securing additional funding of up to US$150 million from new investors. PAL has streamlined operations with a reorganized fleet and is now better capitalized for future growth,” the airline added.
For information, air travel in the Philippines collapsed by more than 75% in 2020 due to travel restrictions imposed to contain the corona virus. From 60 million domestic and international passengers in 2019, traffic fell to 13 million in 2020.
Philippine Airlines said in September it had canceled more than 80,000 flights, wiped out US$2 billion in revenue and laid off more than 2,000 employees. As borders reopen and travel restrictions are relaxed, the airline said it would resume regular flights, including to cities in mainland China and Australia. [sources/photo special]
