The Philippines Airlines(PAL) announced its decision to undergo financial restructuring under the U.S. Chapter 11 process. The airlines filed a petition in the New York district court on Friday, September 3rd, 2021; there have been rumors about the Philippines carrier filing for Chapter 11 for a while. After 18+ months into the pandemic, the speculations came true.
During the start of the pandemic, some of the airlines filed for Chapter 11, including the Latin American airlines Avianca and the airline group with affiliates in Chile, Peru, Colombia, Ecuador, and the U.S., LATAM. The filing for bankruptcy is expected to significantly shrink the fleet size of the Philippines Airlines in its long-haul operations.
PAL’s Restructuring Program
After it announced a voluntary decision to undergo financial restructuring under the U.S. Chapter 11 process on September 3rd, 2021, the step to go under the financial restructuring is part of a set of major agreements PAL has reached in terms with substantially all of its stakeholders. With the one objective to build a stronger Philippines Airlines to serve the customer better and continue with their mission as a full-service airline and flag carrier of the Philippines, the carrier is moving along with the restructuring phase.
The restructuring of the finance will enable the national carrier to emerge with fresh capital, lower debt, and a sturdier financial foundation that will be sustained and strategically developed for the future of the carrier. Charter 11, a globally recognized U.S. legal process, has been used by many carriers over the years to reinvent themselves into more successful operators; PAL also hopes out with the strategic financial restructures that will aid it to develop a successful framework during the period where the aviation industry is starting slowly re-develop after the heavy blows from the Covid-19 pandemics and its restriction on travel.
Philippines Airlines expects to meet its current financial obligations to employees, customers, suppliers, and partners throughout the restructuring process. The airline expects to fulfill all refund obligations, intensifying the efforts to refund the refund application submitted by the passengers that are still pending.
Even though the national carrier has filed for Chapter 11 in New York, the airlines will continue to fly and serve their customers throughout the entire process; aside from the financial restructuring filing, the services and operation of the Philippines Airlines will remain the same as usual. All current and future tickers and travel vouchers with the airlines will be honored and subjected to the usual terms and conditions of use. The passengers will still be able to browse, book, and buy tickets from the PAL’s website, mobile app, contact center, and partner travel agents. Furthermore, the Mabuhay Miles members will be continuously able to earn and redeem their miles from both flight and non-flight transactions with the airline’s merchant partner and look forward to exciting deals and promotions from the national carrier.
Philippines Airline’s Increased Domestic and International Services
Philippines Airlines has continuously increased its domestic and international route travel as the travel demand has started to recover with ease on travel restrictions on a global scale. The airline has plans to roll out new products and services to help the flyers have a convenient, comfortable, and safe flying experience. In the upcoming weeks, PAL is planning to build up flight frequencies on key regional and long-haul routes while expanding domestic networks at the same time. The carrier plans to increase domestic operations from its hubs in Manila and Cebu. All the PAL passenger and cargo flights will continue to operate in the increased network and will be subjected to demand and travel restrictions.
The national carrier has prioritized the safety and health of passengers, employees, and communities they serve to have a comfortable and safe flying experience throughout the journey to bring back confidence in air travel. The airline continues to innovate and enhance customer experience by working with the government and IATA on streamlined rules for travel with the necessity of travel passes and vaccines requirements maintaining the highest level of passengers’ safety throughout the experience.