Philippine Airlines has filed for bankruptcy in the United States and has said it will undergo financial restructuring to recover losses from the impact of the “Govit-19” epidemic on global travel.
The company said it filed for bankruptcy in New York yesterday after a series of deals with lenders, tenants and suppliers to cut $ 2 billion in payments.
The company assured its customers that its operations would not be affected by the financial restructuring program, and hopes that the recovery of travel from the “Govit-19” crisis will continue to increase its domestic and international flights. The company says it has support deals from 90% of lenders. It said the restructuring plan would allow it to reduce the number of its aircraft carriers by 25%.
Responding to a question from the Bloomberg Agency, the company’s management said the “recovery plan” would allow the company to return at least 20 aircraft.
“Philippine Airlines will continue its operations as usual while restructuring our network, navy and company,” Nilo Dadios Rodriguez, vice president and chief financial officer of the airline, said in a video message.
Rodriguez said Philippine Airlines will receive $ 505 million to implement the recovery plan as part of deals with suppliers, lenders and tenants. This amount will then be converted into airline stocks and long-term loans. Rodriguez says it will also receive $ 150 million in loan funding after completing the restructuring process “in a few months”.
The volume of air travel in the Philippines fell by 75% from nearly 30 million passengers in 2019 to seven million last year, due to restrictions imposed against the epidemic, Philippine Airlines Chairman Gilbert Santa Maria announced in the same video. The airline canceled more than 80,000 flights, losing $ 2 billion in revenue and 2,300 employees.
The major shareholder paid over $ 130 million in emergency cash flow, and the non-strategic assets were sold for more than $ 70 million.
Santa Maria said Philippine Airlines operates 21 percent of its pre-epidemic flights and up to 70 percent of its regular stations.
“Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator.”