Philippine Airlines Inc. (PAL) today announced that it has emerged from its voluntary Chapter 11 procedures as a more efficient airline with a strengthened track record, reaffirming its continued role as the only full-service airline of Philippines with the largest international network.
PAL successfully completed its financial restructuring in four months, unlike other airlines which remain in the Chapter 11 process more than a year after filing in 2020. The Philippine national airline attributes strong support from its creditors and shareholders, the cooperation of its industry partners, and the collective efforts of PAL employees around the world who have operated flights on several international and domestic routes throughout the restructuring period.
PAL has streamlined its operations with a reorganized fleet and is now better capitalized for future growth. The company’s reorganization plan, which was approved by the United States Restructuring Court on December 17, 2021, provides for more than US $ 2.0 billion in permanent reductions in the balance sheet of existing creditors, improvements in operational agreements PAL reviews and additional cash, including a US $ 505 million investment. in long-term equity and in debt financing from PAL’s majority shareholder.
The airline’s consensual restructuring plan was accepted by 100% of the votes cast by its major aircraft lessors and lenders, original equipment manufacturers and maintenance, repair and overhaul service providers, and some funded lenders.
“Philippine Airlines stands ready to contribute to the growth of the local and international air transport markets of the Philippines in a way that renews the tourism industry, meets the needs of the citizens of the world, including overseas Filipinos, and to actively contribute to the recovery of the Philippine economy, ”said PAL Director Lucio C. Tan III, citing PAL CEO Dr. Lucio C. Tan. “Our mission as a standard bearer is more important than ever, and we are grateful for the chance to bounce back from the pandemic and continue to fulfill this mission to the best of our ability.”
“This is a time of celebration for PAL, for all of our partners and stakeholders, and for our staff who have sacrificed a lot while working successfully to keep the airline flying,” said Gilbert F. Santa Maria, president and chief operating officer of PAL. “Above all, we thank our customers for their support and the Filipino people for remaining confident in their standard bearers throughout the restructuring process. There are immense challenges ahead, but we look forward to meeting them as a rejuvenated Philippine Airlines, better positioned for strategic growth to continue serving our customers. ”
Going forward, PAL will reinvest in its operations to better serve its valued customers by:
Strengthening PAL’s position as the only full-service airline in the Philippines with the largest international network serving four continents, including:
The only non-stop flights connecting the Philippines with the United States, the east and west coasts of Canada, Hawaii, Brisbane and Melbourne;
The largest network of flights from the Philippines to several cities in Japan, Australia and the Middle East, along with convenient schedules to Hong Kong, Korea, Taipei, Singapore, Thailand, Indonesia, Vietnam and Malaysia;
A high-frequency domestic network encompassing main roads to the main cities of Visayas, Mindanao and Luzon, as well as inter-island services to tourist hot spots and the country’s paradise islands;
The only full service options in the Philippine National Sky, including Business Class on many local routes.
Restore more routes and increase the frequency of flights as travel restrictions ease and borders reopen, including the resumption of scheduled flights to several mainland Chinese cities, full regularization of flights to Australia and the start of new historical services to Israel.
Leveraging codeshare and interline partnerships to complement the airline’s current and future network and enable PAL passengers to enjoy better connections and access to more destinations through partner airlines.
Expand PAL’s newly established cargo business to exploit more opportunities in the air cargo market, including the operation of all-cargo flights to keep supply chains moving and to meet the specific transportation needs of freight such as air transport of vaccines and medical equipment.
Offering attractive rates all year round and competitive promotional offers.
Develop innovations for PAL’s Mabuhay Miles loyalty program, including expansion of membership lists and improvements to program terms and benefits.
Accelerate digital transformation initiatives to deliver seamless and intuitive experiences to PAL customers, including a more personalized website and mobile app, a streamlined reservation process that offers more flexible payment options such as e-wallets and plans payment, enhanced self-service options for booking modification and check-in, and enhanced chat facilities and interactive voice response (IVR) functions through the PAL contact center.
Deploy new product advancements by 2022, as part of a commitment to constantly upgrade services and the overall travel experience for customers.
As always, adhere to the highest professional safety standards and health protocols in all PAL operations.
As part of the new stimulus package in effect, PAL has the opportunity to raise up to US $ 150 million in additional financing from new investors.
PAL reiterated its commitment to meet all reimbursement obligations. The Company has settled over 99% of past refunds and has now returned to normal processing times for refunds, with the exception of certain 2020 cases which require validation procedures primarily involving third-party vendors.
Philippine Airlines Inc. was the only party included in the Chapter 11 file; 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 dossier.
Debevoise & Plimpton LLP, Norton Rose Fulbright US LLP and Angara Abello Concepcion Regala & Cruz (ACCRA) acted as legal advisers and Seabury Securities LLC as financial advisor and investment banker to the Company.
About Philippine Airlines
Philippine Airlines, Inc. (PAL) is the national carrier of the Philippines and the country’s only full-service airline. PAL was the first commercial airline in Asia and celebrated its 80th anniversary in March 2021. The young fleet of Boeing 777, Airbus A350, Airbus A330, Airbus A321 and De Havilland Dash 8-400 operates from 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 ranked as a 4-star global airline by Skytrax in 2018 and was also named the world’s most improved airline in the 2019 Skytrax Global Passenger Survey.