Connect with us

Hi, what are you looking for?

Economy

PAL mulls Chapter 11 filing in US

Philippine Airlines Inc. is in talks with plane lessors about reducing its fleet size and has told them it’s considering a Chapter 11 filing in the U.S. to carry out a restructuring, according to people familiar with the plan.

The airline could return at least two Airbus SE A350s to lessors and four of the 10 Boeing Co. 777s in its fleet, some of the people said, asking not to be identified as the information is private. Two A350s are in the process of being taken back by aircraft lessors and will be redeployed to other carriers, one person said. Prior to the negotiations, Philippine Airlines had six A350s.

One lessor reached an agreement with the airline for it to keep a 777 and an A330, a person involved in the discussions said, asking not to be identified. Work on restructuring lease contracts and reaffirming commitments is ongoing, another person said.

Philippine Airlines is working on documentation for a pre-packaged bankruptcy, people familiar said, with Seabury Capital advising on the restructuring. Cirium had previously reported that Seabury was an adviser on the Chapter 11 plan. Seabury didn’t immediately respond to emailed requests for comment.

Founded in 1941, the airline said in a statement it is working with stakeholders “on a comprehensive restructuring plan” that will enable it to emerge from the global crisis financially stronger. Flights and operations won’t be affected in any restructuring, it said.

Representatives for Airbus said the company doesn’t comment on fleet planning at individual airlines. Boeing declined to comment. Philippine Airlines’ lessors include GE Capital Aviation Services and Goshawk Aviation Ltd., according to Cirium. Calls to GE Capital Aviation’s Singapore office and an email to Ireland-based Goshawk seeking comment weren’t immediately returned during Asia hours.

Philippine Airlines would join dozens of carriers and other aviation businesses, including Latam Airlines Group SA and lessor AeroCentury Corp., in being felled or forced to restructure after global travel was decimated by the pandemic.

The tourism industry accounted for nearly 13% of the Philippines’ gross domestic product in 2019 and employed 13.5% of its labor force. Then COVID-19 came, and international arrivals slumped 82% last year to less than 1.5 million.

While air travel within some countries is recovering as vaccination rollouts gather pace, a return to pre-pandemic levels of traffic could still take years as the virus mutates and governments take different approaches to opening borders. The International Air Transport Association has warned carriers globally will lose about $48 billion in 2021 amid setbacks in restarting travel.

PAL Holdings Inc., the holding company of Philippine Airlines, has reported losses since the first quarter of 2017, including nearly P29 billion ($607 million) in the first nine months of 2020, its latest published figures show.

The airline said in November it was working on a recovery and restructuring plan, without providing details. In February, it said that it would cut 2,300 jobs or about a third of its workforce by mid-March.

Philippines Finance Secretary Carlos Dominguez has told private banks to take the lead in assisting airlines, saying the government didn’t want to take ownership. – Bloomberg

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

MORE than half of students in the Philippines consider temporarily dropping out of school until the coronavirus pandemic ends mainly due to difficulties in...

Economy

The Public Works department has ramped up the completion of projects such as the Sta. Monica-Lawton Bridge also known as the Kalayaan Bridge. —...

Economy

THE BUREAU of the Treasury (BTr) raised its planned borrowings from the local market to P235 billion in July, as it seeks to offer...

Economy

By Jenina P. Ibañez, Reporter MANILA is the 78th most expensive city for expatriates to live in according to Mercer’s 2021 Cost of Living...

Economy

LOCAL GOVERNMENT UNITS (LGUs) could boost their real property tax (RPT) collection by P113.4 billion with the implementation of a project that will digitize...

Economy

THE Department of Energy (DoE) has ordered National Grid Corp. of the Philippines (NGCP) to speed up the acquisition of the required ancillary services...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Economy

US President Joseph R. Biden, Jr., will rely on ally countries to supply the bulk of the metals needed to build electric vehicles and focus on...

Economy

THE Securities and Exchange Commission (SEC) has warned the public from investing or to stop any investment in a group named Maxxprofit Computer Trading...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.



Your information is secure and your privacy is protected. By opting in you agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!