MANILA - Flag carrier Philippine Airlines (PAL) is working on a comprehensive restructuring plan that will allow it to emerge financially stronger from the current global crisis, the airline said on Tuesday following reports that it is seeking court protection from creditors in the United States.
PAL issued the statement after aviation industry website FlightGlobal said the company informed its lessors that it was planning to file for Chapter 11 bankruptcy protection in the US by the end of May.
Flight Global said 3 people with knowledge of the matter told airline industry data provider Cirium.
The Lucio Tan-led flag carrier has been reported to be seeking court protection as early as November last year.
PAL, meanwhile, declined to give specifics about its restructuring.
“As the work is ongoing, we will make the necessary disclosures at the proper time, once details are finalized,” PAL said in a statement.
PAL Holdings Inc, the operator of the airline, disclosed in November last year that it had incurred over P28.85 billion in net losses in the first three quarters of 2020 alone.
This followed a net loss of over P10.31 billion for the whole of 2019, and a net loss of P4.33 billion for the whole of 2018.
PAL Holdings has yet to disclose its full-year financial results for 2020.
A Chapter 11 filing does not mean that PAL is shutting down, but instead will be allowed to reorganize to keep its business alive and pay creditors over a period of time.
The company also said its operations will not be affected “in any restructuring.”
“We continue to increase our international and domestic flights as the market recovers with easing of travel restrictions. We continue to operate repatriation flights and transport COVID-19 vaccines to and throughout the Philippines, as part of the global effort to combat the pandemic," the airline said.
Airlines have been hit hard by the travel restrictions imposed to check the spread of the COVID-19 pandemic.
Cebu Pacific posted a net loss of P22.2 billion in 2020 as the pandemic cratered travel demand.
The Gokongwei-led airline on Tuesday said it has raised over P40 billion to continue operations and prepare for recovery.