Philippine Airlines has filed for bankruptcy protection in the United States to undergo financial restructuring under the Chapter 11 process.
Chapter 11 of the United States bankruptcy code allows reorganization under the bankruptcy laws of America. The company normally proposes a reorganization plan in order to keep its business alive and pay creditors over time.
“Chapter 11 enables us to restructure contracts that are mostly governed by foreign laws, with our largest creditors based outside the Philippines. We are thus able to ensure the execution of all such agreements under a well-established legal process that is universally accepted and can be completed expeditiously,” said Nilo Thaddeus Rodriguez, Senior Vice President and Chief Financial Officer of Philippine airlines in a video statement online.
While this process is anticipated to take months, it is business as usual for Philippine Airlines.
“Our highest priority is the safety and health of our passengers, our employees and the communities we serve. Nothing about that will change as we undergo restructuring,” the airline states online.
In late August of 2021, Philippine Airlines posted a net loss of 16.6 Billion Pesos ($ 330.9 million) in the first six months of 2021. In 2020, the airline reported a net loss of 20 Billion Pesos ($399 million).
In the Philippines, travel volume collapsed about 75 percent from about 30 million passengers in 2019 to just 7 million in 2020 due to pandemic restrictions.