Philippines Airlines bounces back from bankruptcy
07 / 01 / 2022
Philippines Airlines Airbus A340-313X. Copyright: Toshi Aoki - JP Spotters, CC BY-SA 3.0
Philippines Airlines (PAL) has emerged from bankruptcy proceedings with a new focus on growing air cargo.
The airline has exited chapter 11 of the United States Bankruptcy Code voluntarily, having successfully completed its financial restructuring within four months.
PAL aims to expand its newly established cargo business to tap more air cargo market opportunities, including the operation of all-cargo flights to keep supply chains moving and to meet specific freight transport needs such as the airlift of vaccines and medical equipment.
Other plans include restoring more routes and increasing flight frequencies; accelerating digital transformation initiatives; and rolling out new product advancements.
The company’s Plan of Reorganisation was approved by the US restructuring court in December. Under the recovery plan, PAL has the option to obtain up to $150m in additional financing from new investors.
Gilbert F. Santa Maria, PAL president and chief operating officer, said: “There are immense challenges ahead, but we look forward to tackling them as a reinvigorated Philippine Airlines, better positioned for strategic growth to continue serving our customers.”
PAL is the flag carrier of the Philippines and the country’s only full-service network airline.
The US Government’s ‘United States Courts’ website said that a case filed under chapter 11 of the United States Bankruptcy Code is frequently referred to as a “reorganisation” bankruptcy.
Usually, the debtor remains “in possession,” has the powers and duties of a trustee, may continue to operate its business, and may, with court approval, borrow new money. A plan of reorganisation is proposed, creditors whose rights are affected may vote on the plan, and the plan may be confirmed by the court if it gets the required votes and satisfies certain legal requirements.