September 6, 2021
By Neil Jerome Morales
MANILA (Reuters) – Philippine Airlines will return 22 aircraft, mostly Airbus and Boeing jets, to lessors as it pursues a financial restructuring programme to survive after the pandemic has decimated global travel, executives said on Monday.
Philippine Airlines last week filed for Chapter 11 bankruptcy https://ift.tt/2VhOXca in the United States, allowing it to continue operations and generate fresh capital.
With the company not expecting a return to pre-pandemic levels until 2024 to 2025, the carrier will return 22 aircraft to lessors, Philippine Airlines President Gilbert Santa Maria told a news conference.
Philippine Airlines will end with 70 aircraft after cutting about a quarter of its fleet of 92 planes.
The flag carrier has also negotiated with Airbus for the postponement of the delivery of 13 narrow-body Airbus aircraft, with an option to cancel some orders beyond 2026 to 2030, said Nilo Thaddeus Rodriguez, the company’s chief financial officer.
After filing for Chapter 11 bankruptcy, Philippine Airlines said on Friday it was pursuing a financial restructuring plan.
“The chance that this will fail is very small,” Santa Maria said.
The proposed rehabilitation plan will cut $2 billion in borrowings. It also includes $505 million in long-term debt equity and debt financing from the airline’s majority shareholder, PAL Holdings Inc., and $150 million of additional debt financing from new investors, the company said.
PAL Holdings is partly owned by Japan’s ANA Holdings Inc.
(Reporting by Neil Jerome Morales; Editing by Ed Davies)
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