Philippine Airlines (PAL) has announced it is filing for bankruptcy in the US to slash off at least US$2 billion of debt, and that the move should gain the carrier some US$655 million in fresh capital after the Chapter 11 bankruptcy code process.
In a 6 September post on its Facebook page, the national carrier will "continue business as usual, while finalising the restructuring of our network, fleet, and organisation," said Nilo Thaddeus P. Rodriguez, SVP/CFO and compliance officer.
The money from agreements reached with lenders, lessors and suppliers will go into airline equity and long-term debt.
In the Facebook video update, it was shared that customers should not experience any service disruptions, and that all current and future tickets will be honoured.
As well, codeshare and internline partnerships will remain, and Mabuhay Miles privileges have been extended until February 2022.
As for refund applications for the more than 80,000 flights cancelled, about 90% have been completed and the rest should be resolved in the coming months.
"We will maintain our current flight schedules, and gradually increase our domestic and international destinations, and flight frequencies as travel demand returns," said Dexter C. Lee, SVP strategy and planning.
PAL will also be downsizing its fleet by 25%.
Watch the video here.