Philippine Airlines exits US bankruptcy

This photo taken on June 24, 2021 shows Philippine Airlines’ (PAL) crew members wearing protective gear as a preventive measure against the Covid-19 coronavirus welcoming a passenger on a flight prior to departure at General Santos City airport, on the southern island of Mindanao. (Photo by Ted ALJIBE / AFP)

Philippine Airlines has said it has emerged from bankruptcy after a US court approved its plan to slash up to $2 billion in debt and obtain additional capital.

The national carrier of the Philippines had filed for bankruptcy in the United States in September, seeking relief from creditors as it tried to survive the devastation unleashed on the airline industry by the coronavirus pandemic.

Its court-approved reorganisation plan includes a $2 billion debt reduction and additional liquidity of $505 million from its main shareholder, PAL said in a statement Friday.

It also has the option to obtain up to $150 million in additional financing from new investors.

“PAL has streamlined operations with a reorganised fleet and is now better capitalised for future growth,” the airline added.

(FILES) In this file photo taken on January 26, 2016 tail sections of Philippine airlines (PAL) aircrafts are seen parked at the terminal II building of the Manila international airport. – Philippine Airlines has said on January 1, 2022 it has emerged from bankruptcy after a US court approved its plan to slash up to 2 billion USD in debt and obtain additional capital. (Photo by Ted ALJIBE / AFP)

Air travel in the Philippines collapsed by more than 75 percent in 2020 due to travel restrictions imposed to contain the coronavirus, according to government data.

From 60 million domestic and international passengers in 2019, traffic plunged to just over 13 million in 2020.

PAL said in September it had cancelled more than 80,000 flights, wiping out $2 billion in revenue, and let go of 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.