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Sunday, September 25, 2022

US court approves Philippine Airlines’ recovery plan

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Philippine Airlines’ recovery plan has been approved by the United States Bankruptcy Court for the Southern District of New York, four months after the flag carrier filed for financial restructuring of its $2 billion debt under Chapter 11.

The airline’s creditors, including aircraft lessors, OEM and MRO providers, and some financed loan lenders, voted unanimously in favor of the recovery plan.

“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 cut its fleet by 25%, contains $505 million in finance, and “provides for almost $2 billion in permanent balance sheet reductions from existing creditors,” according to the proposal. By the end of 2021, the carrier expects to be out of the Chapter 11 procedure.

“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.

Philippine Airlines reported a cumulative comprehensive loss of 27 billion pesos ($540 million) in the first nine months of 2021.

The airline currently serves 32 foreign and 29 local locations, and once travel restrictions are eased, it expects to expand its flight schedule.

According to statistics from Planespotters.net, the airline currently has 80 aircraft in its fleet. Thirty Airbus A321s, thirteen Airbus A320s, thirteen De Havilland Canada Dash 8s, eleven Airbus A330s, ten Boeing 777s, and three Airbus A350 XWBs make up PAL’s fleet.

 

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