PHILIPPINE Airlines (PAL) has emerged from bankruptcy after a United States (US) court approved its plan to slash up to US$2 billion (RM8.3 billion) in debt and obtain additional capital.

It had filed for bankruptcy in the US in September, seeking relief from creditors as it tried to survive the devastation unleashed on the airline industry by the Covid-19 pandemic.

Its court-approved reorganisation plan includes a US$2 billion debt reduction and additional liquidity of US$505 million from its main shareholder, said the national carrier of the Philippines in a statement yesterday.

It also has the option to obtain up to US$150 million in additional financing from new investors.

“PAL has streamlined operations with a reorganised fleet and is now better capitalised for future growth.”

Last year, Philippines’ air travel collapsed by more than 75% due to travel restrictions imposed to contain Covid-19, according to government data.

From 60 million domestic and international passengers in 2019, traffic plunged to just over 13 million in 2020.

PAL had in September said it had cancelled more than 80,000 flights, wiping out US$2 billion in revenue, and let go of more than 2,000 workers.

The airline said it will resume regular flights, including to cities in Australia and China, as borders reopen and travel restrictions ease. – AFP, January 1, 2022.