PAL seen to fly into recovery after exit from Chapter 11 bankruptcy process

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Metro Manila (CNN Philippines, January 1) — Philippine Airlines welcomed 2022 on a positive note as it officially climbed out of its financial restructuring plan, driving its recovery hopes.

In a statement Friday night, the flag carrier said it emerged from its voluntary Chapter 11 proceedings, slashing over $2 billion in debts. This came four months after the Tan-led airline filed for bankruptcy protection in the United States in September.

The restructuring plea also sought to reduce the company's operating fleet capacity by 25% and raise $655 million in new financing.

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"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," he added.

While many countries have seen their COVID-19 cases spike anew due to the presence of the new variant Omicron, Gilbert F. Santa Maria, PAL president and chief operating officer, still expressed optimism that the airline is more equipped now to weather challenges.

The Philippines has already recorded 14 Omicron cases, three of which are local cases. With a high possibility of local transmission, Metro Manila will be placed under Alert Level 3 from Jan. 3 to 15.

READ: PH confirms three local cases of Omicron variant

"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," he said.

Following the completion of its restructuring plan, PAL seeks to restore more routes and increase flight frequencies.

PAL also targets to expand its presence in the cargo business.

The firm reiterated its commitment to fulfilling all refund obligations. PAL said it 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."