PAL cites 'restructuring' amid bankruptcy protection reports

Flag carrier Philippine Airlines (PAL) reiterated it is undergoing "restructuring" as part of its plan to weather the coronavirus pandemic, amid reports of a bankruptcy protection plan.

"Philippine Airlines management and stakeholders continue to work on a comprehensive restructuring plan that will enable PAL to emerge financially stronger from the current global crisis," it said on Tuesday evening, May 11.

PAL issued the statement after aviation site FlightGlobal reported that the flag carrier has informed its creditors of a plan to file for Chapter 11 bankruptcy protection in the United States by the end of May.

PAL has been rumored to be seeking court protection from creditors.

In February, PAL announced that 30% or 2,300 of its over 7,000 workers would be laid off in mid-March. The flag carrier earlier said the move was part of a "larger restructuring and recovery plan."

"As the work [on restructuring] is ongoing, we will make the necessary disclosures at the proper time, once details are finalized," it said on Tuesday.

In a disclosure on Wednesday, May 12, listed parent PAL Holdings told the local bourse, "PAL is considering all options available to it, including a comprehensive restructuring plan that will ensure its viability, and support the chairman's (Lucio Tan) commitment to continue its operations."

"As of the moment, there is no definite option that has been officially approved," it added.

The flag carrier gave assurances on Tuesday that flight operations – including repatriation flights and vaccine transport – "will not be affected" by any restructuring.

PAL has yet to disclose its full-year financial report for 2020 and for the first quarter of 2021.

It recently asked for an extension, citing "difficulty" in preparing the 2020 earnings report following the lockdown in March. For its first-quarter financial statement, PAL said it "needs more time."

In November 2020, PAL reported a net loss of P29.03 billion in the first nine months of that year, 269% larger than the P7.86 billion it lost in the same period in 2019. – Rappler.com

Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at aika.rey@rappler.com.

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