MANILA: Philippine Airlines has stated it emerged from bankruptcy after a U.S. court approved its plan to cut up to $ 2 billion in debt and raise additional capital.
The Philippines’ national airline filed for bankruptcy in the United States in September to relieve creditors as it tried to survive the devastation of the aviation industry caused by the coronavirus pandemic.
Its court-approved reorganization plan includes a $ 2 billion debt reduction and $ 505 million additional liquidity from its majority shareholder, PAL said in a statement Friday.
It also has an option to obtain up to $ 150 million in additional funding from new investors.
“PAL has streamlined operations with a reorganized fleet and is now better capitalized for future growth,” added the airline.
Air traffic in the Philippines collapsed by more than 75 percent in 2020 due to travel restrictions to contain the coronavirus, according to government figures.
From 60 million domestic and international passengers in 2019, traffic slumped to just over 13 million in 2020.
PAL said in September it canceled more than 80,000 flights, wiped $ 2 billion in sales and laid off more than 2,000 employees.
As borders reopen and travel restrictions ease, the airline said it will resume regular flights, including to cities in mainland China and Australia.