International

Philippine Airlines exits US bankruptcy

Philippine Airlines has declared bankruptcy, claiming that a US court has accepted its plan to trim up to $2 billion in debt and raise extra money.

In September, the Philippines’ national carrier filed for bankruptcy in the United States, seeking relief from creditors as it struggled to endure the airline industry’s destruction caused by the coronavirus outbreak.

PAL said in a statement Friday that its court-approved reorganization plan involves a $2 billion debt reduction and increased liquidity of $505 million from its principal shareholder.

It also has the option of raising up to $150 million in new capital from new investors.

“With a reorganized fleet, PAL has streamlined operations and is now better financed for future expansion,” the airline noted.

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.

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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.

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