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Friday, February 3, 2023

Philippine Airlines Inc. (PAL) Announces Initial Milestone in Recovery Plan

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Philippine Airlines Inc. (PAL) stated on Friday that the United States Chapter 11 court had granted all “First Day” motions for PAL’s voluntary reorganization after petitions filed on September 3, 2021.

These approvals represent a significant step forward in PAL’s recovery plan, which will cut the company’s debt by US$2.0 billion and assist the company in recovering from the effects of the global epidemic.

“This is an important stage in our recovery plan since it enables our continued operations to continue serving our loyal customers and connecting the Philippines with the rest of the globe.

Our considerable creditor backing, along with the Court’s authorization, allows us to move forward toward a rapid emergence and full recovery.

As demand for travel rises and constraints relax, we will continue to grow domestic and international flights while ensuring the safety and health of our passengers and employees,” stated Gilbert F. Santa Maria, President and Chief Operating Officer of PAL.

The orders given by the United States Bankruptcy Court for the Southern District of New York allow PAL to continue operating normally, guaranteeing that the Company may continue to serve customers as a full-service airline and the Philippines’ flag carrier. PAL has been granted permission to:

All customer programs, including valid tickets and travel vouchers, Mabuhay Miles and rewards, and refund obligations, must be honored and maintained, subject to PAL’s standard terms and conditions of usage.

Members of Mabuhay Miles should expect to continue accruing and redeeming Mabuhay Miles as usual.

Pay ongoing suppliers and trade creditors in the normal course of business for goods and services given throughout the Chapter 11 procedure.

Continue to pay all employee wages, compensation, and benefit obligations, subject to the maintenance of any appropriate temporary employment arrangements, and maintain employee benefit programs in the ordinary course of business throughout the Chapter 11 process.

Access the first $20 million of its $505 million in debtor-in-possession finance.

PAL will continue to operate flights in the normal course of business in accordance with safety regulations, and the Company expects to meet all of its current financial obligations to employees, customers, the government, and its lessors, lenders, suppliers, and other creditors throughout the Chapter 11 process.

The only party included in the Chapter 11 filing is Philippine Airlines Inc., while PAL Holdings Inc., which is traded on the Philippine Stock Exchange (PSE: PHI), and Air Philippines Corporation, known as PAL Express, are not.

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