PAL secures ‘critical’ US court approval of recovery plan
CNN Philippines — Philippine Airlines (PAL) realized a “critical” development on its hopes to survive the COVID pandemic after winning a United States court approval of its recovery plan.
In a statement, PAL reported that the U.S. Bankruptcy Court of the Southern District of New York has approved its plan of reorganization, adding it received “overwhelming creditor support throughout the process.”
“Today’s court approval represents a critical moment in our journey to emerge as a stronger airline,” said Gilbert F. Santa Maria, PAL president and chief operating officer.
“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,” he said.
The flag carrier said the plan was accepted by “100% of the votes cast, which were from PAL’s primary aircraft lessors and lenders, original equipment manufacturers and maintenance, repair, and overhaul service providers, and certain funded debt lenders.”
PAL noted it expects to emerge from the Chapter 11 process before the year ends.
Under the restructuring plan, the Tan-led airline seeks to slash $2 billion in borrowings, cut its operating fleet capacity by 25%, and raise $655 million in new financing.
PAL is servicing flights to 32 international and 29 domestic destinations from its hubs in Manila, Cebu, and Davao.
The airline also hopes to restore more routes and boost flight frequencies.
“Following implementation of the plan, PAL will be better positioned to capture travel demand and serve the needs of global citizens, actively contributing to the Philippine economy,” it said.
