MANILA, Philippines–(BUSINESS WIRE)–Philippine Airlines Inc. (PAL) announced today that it has emerged from its voluntary Chapter 11 proceedings as a more efficient airline with a strengthened balance sheet, reaffirming its continuing role as the Philippines� sole full-service airline with the largest international network.
PAL successfully completed its financial restructuring within four months, in contrast to other airlines that remain in the Chapter 11 process more than a year after filing in 2020. The Philippine flag carrier credits the strong support of its creditors and shareholders, the cooperation of its industry partners and the collective efforts of PAL employees around the world who sustained flights on multiple international and domestic routes throughout the restructuring period.
PAL has streamlined operations with a reorganized fleet and is now better capitalized for future growth. The Companys Plan of Reorganization, which was approved by the U.S. restructuring Court on December 17, 2021, provides for over US$2.0 billion in permanent balance sheet reductions from existing creditors, improvements in PALs critical operational agreements and additional liquidity including a US$505 million investment in long-term equity and debt financing from PALs majority shareholder.
The airlines consensual restructuring plan was accepted by 100% of the votes cast by its primary aircraft lessors and lenders, original equipment manufacturers and maintenance, repair, and overhaul service providers, and certain funded debt lenders.
Philippine Airlines stands ready to help grow back the Philippines local and international air travel markets in ways that renew the tourism industry, serve the needs of global citizens including overseas Filipinos, and contribute actively to the recovery of the Philippine economy, said PAL Director Lucio C. Tan III, quoting PAL Chairman and CEO Dr. Lucio C. Tan. Our mission as the flag carrier matters more than ever, and we are thankful for the chance to rebound from the pandemic and continue to fulfill this mission as best as we can.
This is a celebratory moment for PAL, for all our partners and stakeholders, and for our personnel who sacrificed much while working successfully to keep the airline flying, said Gilbert F. Santa Maria, PAL President and Chief Operating Officer. Above all, we thank our customers for their support, and the Filipino people for keeping faith in their flag carrier through the entire restructuring process. 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.
Moving forward, PAL will reinvest in its operations to better serve its valued customers by:
Under the newly effective recovery plan, PAL has the option to obtain up to US$150 million in additional financing from new investors.
PAL reiterated its commitment to fulfill all refund obligations. The Company has cleared over 99% of past refunds and is now back to normal processing times for refunds, except for some 2020 cases that require validation procedures mostly involving third party providers.
Philippine Airlines Inc. was the only party included in the Chapter 11 filing; while PAL Holdings Inc., which is listed on the Philippine Stock Exchange (PSE: PHI), and Air Philippines Corporation, known as PAL Express, were not included in the Chapter 11 filing.
Additional Information
Debevoise & Plimpton LLP, Norton Rose Fulbright US LLP and Angara Abello Concepcion Regala & Cruz (ACCRA) acted as legal advisors and Seabury Securities LLC as financial advisor and investment banker to the Company.
About Philippine Airlines
Philippine Airlines, Inc. (PAL) is the flag carrier of the Philippines and the countrys only full-service network airline. PAL was the first commercial airline in Asia and marked its 80th anniversary in March 2021. PALs young fleet of Boeing 777s, Airbus A350s, Airbus A330s, Airbus A321s and De Havilland Dash 8-400 aircraft operate out of hubs in Manila, Cebu and Davao to 29 destinations in the Philippines and 32 destinations in Asia, North America, Australia, Europe and the Middle East. PAL was rated a 4-Star Global Airline by Skytrax in 2018 and was likewise voted the Worlds Most Improved Airline in the 2019 Skytrax worldwide passenger survey.
Contacts
PAL Corporate Communications (Manila)
corpcomms@pal.com.ph
Edelman (New York)
PhilippineAirlines@edelman.com
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