The Struggle of PAL this Pandemic and its Bankruptcy in New York

As the pandemic continues to wreak havoc globally, Philippine Airlines (PAL) continues to push through the crisis and announced last Saturday, September 4, the filing of a Chapter 11 bankruptcy petition in the Southern District of New York.

Billionaire owner, PAL chairman and chief executive officer, Lucio Tan, called the move a major breakthrough as the airline’s survival in the pandemic. The long-anticipated bankruptcy slashed 25 percent of its fleet and raised $655 million (P32.6 billion) in funding.

This move allows PAL to get ahold of its finances and will get proper reconstruction for the company that has been much needed. The reconstruction of the airlines only covers Philippine Airlines, excluding PAL Holdings and PAL Express.

“On September 03, Philippine Airlines announced the voluntary decision to undergo financial restructuring under the U.S. Chapter 11 process. This step is part of a set of major agreements PAL has reached with substantially all of our stakeholders, and with one objective: to build a stronger Philippine Airlines so that we can serve our customers better and continue our mission as a full-service airline and flag carrier of the Philippines,” the airline said in a statement on their reconstruction.

“We welcome this major breakthrough, an overall agreement that enables PAL to remain the flag carrier of the Philippines and the premier global airline of the country, one that is better equipped to execute strategic initiatives and sustain the Philippines’ vital global air links to the world,” says Dr. Lucio C Tan, PAL Chairman and chief executive.