Bankrupt Philippine Airlines of bilyonaryo Lucio Tan has vowed to emerge “stronger” from its “voluntary” decision to file a Chapter 11 program in the United States.
“Chapter 11 is a globally recognized U.S. legal process that many airlines have used to reinvent themselves into more successful companies. The restructuring will enable PAL to emerge with fresh capital, lower debt and a sturdier financial foundation for the future,” said PAL in a newly-formed website, palrecovery.com.
Based on the deal signed with the New York court, lessors and creditors have agreed to slash PAL’s debt by $2 billion with Tan shelling out $505 million in fresh money and the airline borrowing $150 million from global private investors.
PAL finally announced the start of its Chapter 11 process on September 3 after amassing P126 billion in losses from the start of the pandemic in 2020 to the first half of 2021. But PAL has been in the red before the COVID breakout, losing a total of P22 billion from 2017 to 2019.
“This step is part of a set of major agreements PAL has reached with substantially all of our stakeholders, and with one objective: to build a stronger Philippine Airlines so that we can serve our customers better and continue our mission as a full-service airline and flag carrier of the Philippines,” said PAL.
PAL assured that “passengers and employees” would not be affected by the bailout.
The Tan-led airline said it would continue “business as usual”with flights continuing uninterrupted and tickets, vouchers, refund applications and Mabuhay Miles honored.