The United State Bankruptcy Court of the Southern District of New York has cleared Philippine Airlines’ recovery plan, four months after the flag carrier filed for financial restructuring under Chapter 11 proceedings.
The recovery plan was approved by 100% of the votes cast by the airline’s creditors, including aircraft lessors, OEM and MRO providers, and certain funded debt lenders.
“Today’s court approval represents a critical moment in our journey to emerge as a stronger airline,” Gilbert F. Santa Maria, PAL President & COO announced in a statement.
The recovery plan allows PAL to reduce its fleet by 25%, includes $505 million in financing, and “provides for over $2 billion in permanent balance sheet reductions from existing creditors”. The carrier said it will likely emerge from the Chapter 11 process by the end of 2021.
“We have a few more procedural steps to take before we can complete the Chapter 11 process, after which we will focus intensely on serving the public, navigating the continuing challenges of the pandemic and economic recovery, and sustaining the links that connect our archipelago,” Maria added.
In the first nine months ended September 2021, Philippine Airlines reported a total comprehensive loss of 27 billion pesos ($540 million).
Currently, the airline serves 32 international and 29 domestic destinations and plans to increase its flight schedule once travel restrictions are lifted.
The airline presently has a total of 80 aircraft in its fleet, Planespotters.net data shows. The PAL’s fleet comprises 30 Airbus A321s, 13 Airbus A320s, 13 De Havilland Canada Dash 8s, 11 Airbus A330s, 10 Boeing 777s, and three Airbus A350 XWB aircraft.