Philippine Airlines wants to get through the corona crisis under bankruptcy protection under US bankruptcy law. Flight operations will not be interrupted. The number of flights is to be increased gradually.
The airline Philippine Airlines (PAL) wants to get through the corona crisis under the protection of creditors under US bankruptcy law and is aiming for a financial restructuring. As the company announced, an application for bankruptcy protection under Chapter 11 of US bankruptcy law was filed with a court in New York on Friday. Previously, agreements with lenders, lessors and suppliers about payment cuts of more than two billion dollars (around 1.7 billion euros) had been reached.
The flight operations will not be interrupted, it said. Rather, the number of domestic and international flights should be gradually increased as the market recovers. The restructuring plan also allows the Filipino company to reduce fleet capacity by 25 percent and secure long-term financing of $ 505 million. The airline, founded in 1941, reported a loss of around 1.4 billion dollars in 2020.
The US regulations (“Chapter 11”) enable a restructuring and reorganization of troubled companies. Finances such as debts, leases and other financial obligations are reorganized. The aim is for the company to survive. As a rule, creditors remain seated on part of their claims.
In contrast to liquidation, this prevents the creditors from taking legal action against the company. The debtor is granted temporary protection from his creditors in order to reposition himself. Many US companies, including airlines, have restructured themselves this way in the past while maintaining their ongoing business.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
