THURSDAY FEB 06, 2025
×
Search AeroXplorer
Philippine Airlines Exits Chapter 11 Bankruptcy

Philippine Airlines Exits Chapter 11 Bankruptcy

BY DAVIS TURNER Published on January 10, 2022 0 COMMENTS

On December 31, 2021, Philippine Airlines announced they were able to successfully exit Chapter 11 bankruptcy. This news is a welcome sight for the carrier, as they faced massive debt earlier in 2021 as a result of pandemic-related passenger declines. Air travel to the Philippines dropped significantly as a result of COVID-19, paralleling almost every country; the number of passengers flying within and to the Philippines dropped from 60 million in 2019 to 13 million in 2020. As many airlines struggle with Chapter 11 bankruptcy filings from 2020, Philippine Airlines was able to go through the process in just four months. Amazingly, the airline has now fulfilled 99% of past refund obligations and is committed to fulfilling all obligations in the future.

 

Previously in early September, the airline filed for reorganization in an attempt to reduce its debts by 2 billion dollars while also aiming to produce more than 500 million in liquid assets. The airline also hoped to raise additional money from investors to cover the debts, and from the CEO Lucio Tan—who provided financial assistance with "liquid injections." At the time of the bankruptcy announcement, the airline canceled 80,000 flights.

 

Philippine Airlines is taking off into 2022 with a solid financial bottom line and free of bankruptcy proceedings. Photo: Arthur Chow

 

In an attempt to reduce payroll, the airline laid-off 2,000 employees, and to reduce maintenance costs, the fleet size was streamlined and cut by 25%. The Restructuring Court of the United States approved the airline's Plan of Reorganization in mid-December, which gives the airline the 2 billion dollars in balance sheet reductions. The airline was also able to receive the 500 million long-term equity ask.

 

Many of the Philippine partners in the supply chain—aircraft lessors, maintenance contractors, and service providers—unanimously agreed to the restructuring. Without the support of of industry partners and airline employees, the fast turnaround may not have been possible. Gilbert F. Santa Maria, the President and CEO of Philippine Airlines, thanked the many people and groups who helped the airline through the process, writing, "This is a celebratory moment for the airline, for all our partners and stakeholders, and for our personnel who sacrificed so much...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."

 

A financially-strong Philippine Airlines is now looking to reaffirm their top-tier legacy carrier status in the year ahead. The airline has announced ambitions to restore more COVID-cancelled routes to Mainland China while increasing flight frequencies across the entire network. The airline is planning on launching service to Tel Aviv in April—becoming the first airline to offer service from Israel to the Philippines. Connectivity and interlining is expected to improve this year as well. Interestingly, another key goal is to also expand Philippine's Cargo services considering the success of other East Asian cargo "divisions" of established passenger carriers such as China Airlines and Cathay Pacific.

 AeroXplorer is on Telegram! Subscribe to the AeroXplorer Telegram Channel to receive aviation news updates as soon as they are released. View Channel 
Davis Turner
Planespotter and aviation journalist from the San Francisco Bay Area. Davis has previously worked on business plan research with StartupBoeing and historical analysis with Ricondo and Associates. Davis will be a freshman in college this fall, based in Chicago.

Comments (0)

Add Your Comment

SHARE




TAGS

NEWS Philippine AirlinesBankruptcyChapter 11

RECENTLY PUBLISHED

Seattle Plane Strike 2025: Japan Airlines and Delta Collision Raises Safety Concerns Seattle-Tacoma International Airport saw a concerning incident on Wednesday morning when a Japan Airlines (JAL) plane clipped a parked Delta Air Lines jet while taxiing. Thankfully, no one was injured, but passengers described the collision as a frightening experience. NEWS READ MORE »
Ethiopian Airlines Expands Cargo Fleet with New Boeing 777 Freighter Ethiopian Airlines has expanded its cargo fleet with a brand-new Boeing 777 Freighter, registered as ET-BAB (MSN 68140). The aircraft was delivered directly from Boeing’s factory in Everett, Washington, USA, and landed at Addis Ababa Bole International Airport at 3:41 PM (GMT+3) on Wednesday, January 22, 2025. NEWS READ MORE »
Jeju Air To Cut 1000 Flights By March In the aftermath of the recent tragedy in Korea, Jeju Air announced that they would cut many flights by March. This includes all flights to and from Muan International Airport, where the accident occurred, as the airline will pull all their operations from the airport. NEWS READ MORE »


SHOP

$2999
NEW!AeroXplorer Aviation Sweater Use code AVGEEK for 10% off! BUY NOW

FOLLOW US ONLINE