Philippine Airlines announced on Saturday that it is filing for bankruptcy in the United States, seeking to cut $ 2 billion in debt. in one moment in which he tries to continue in an industry that has been exhausted by the Covid pandemic.
The Philippine flag carrier has filed for bankruptcy It will be allowed to restructure contracts and reduce debt by at least two billion dollarsand at the same time getting $ 655 million of new capital.
The company will reduce the size of its fleet by 25% and renegotiate contracts to reduce rental rates.
“The Philippines will continue its operations as usual as they complete the restructuring of our network, fleet and enterprise,” he said. in a video message from the airline’s vice president and chief financial officer, Nilo Tadeos Rodriguez.
As part of the agreements reached with suppliers, lenders and lessors, Rodriguez said Philippine Airlines will guarantee $ 505 million to implement the recovery plan. The amounts will be subsequently converted in airline stocks and long-term debt.
It will also get $ 150 million in debt financing after completing the restructuring process. “in a few months “, according to Rodriguez.
Air travel volume in the Philippines plummeted 75% from nearly 30 million passengers in 2019 to seven million last year due to restrictions imposed to fight the pandemic, Philippine Airlines president Gilbert Santa Maria announced in the same video. .
The airline canceled more than 80,000 flights, costing $ 2 billion in revenue and lost 2,300 employees.
The major shareholder injected over $ 130 million in urgent cash and they were sold asset non-strategic for over 70 million dollars.
Santa Maria said Philippine Airlines now operates 21% of its pre-pandemic flights, up to 70% of its regular stops.
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