Right on schedule, within four months, Philippine Airlines Inc. (PAL) exited from its voluntary Chapter 11 bankruptcy proceedings to take $2.1 billion debts off its balance sheet, the flag carrier announced on New Year's eve ( Dec. 31, 2021).

While other airlines usually remain in the Chapter 11 process more than a year after filing, PAL completed its restructuring quickly and is now well-positioned for long-term growth, with reduced debt and additional liquidity.

PAL has streamlined operations, committing to return over 20 planes, slashing its fleet to 70 aircraft, and is now better capitalized for future growth.

On top of its US$2.1 billion permanent balance sheet reduction from existing creditors, the flag carrier's Plan of Reorganization, which the U.S. restructuring Court approved on December 17, 2021, include a US$505 million investment in long-term equity and debt financing from PAL’s majority shareholder.

The airline’s consensual restructuring plan was accepted by 100 percent of the votes cast by its primary aircraft lessors and lenders, original equipment manufacturers and maintenance, repair, and overhaul service providers, and certain funded debt lenders.

Under its new recovery plan, PAL also has the option to obtain up to US$150 million in additional financing from new investors.

“PAL stands ready to help grow back the Philippines’ local and international air travel markets in ways that renew the tourism industry, serve the needs of global citizens including overseas Filipinos, and contribute actively to the recovery of the Philippine economy,” said PAL Director Lucio C. Tan III, quoting PAL Chairman and CEO Dr. Lucio C. Tan.

“Our mission as the flag carrier matters more than ever, and we are thankful for the chance to rebound from the pandemic and continue to fulfill this mission as best as we can.”

“This is a celebratory moment for PAL, for all our partners and stakeholders, and for our personnel who sacrificed much while working successfully to keep the airline flying,” according to Gilbert F. Santa Maria, PAL President and Chief Operating Officer.

“There are immense challenges ahead, but we look forward to tackling them as a reinvigorated Philippine Airlines, better positioned for strategic growth to continue serving our customers,” he stressed.

Moving forward, PAL will reinvest in its operations to better serve customers by reinforcing its position as the country's sole full-service airline with the largest international network.

PAL serves four continents and offers the only nonstop flights linking the Philippines to the U.S., Canadian East and West Coasts, Hawaii, Brisbane, and Melbourne;

It has the largest network of flights from the Philippines to multiple cities in Japan, Australia and the Middle East, as well; along with convenient schedules to Hong Kong, Korea, Taipei, Singapore, Thailand, Indonesia, Vietnam and Malaysia

PAL has a high-frequency domestic network encompassing trunk routes to the major cities of Visayas, Mindanao and Luzon, plus inter-island services to the nation’s tourist hot spots.

Also, it is the only full-service option in Philippine domestic skies, including Business Class on many local routes.

PAL is restoring more routes and increasing flight frequencies as travel restrictions ease and borders reopen.

It will resume regular flights to multiple cities in mainland China, fully regularize flights to Australia and start historic new services to Israel.

PAL will likewise build on code sharing and interline partnerships to complement its current and future network and allow passengers better connections and access to more destinations through partner airlines.

Furthermore, the flag carrier is expanding its newly established cargo business to tap more air cargo market opportunities.

This includes operating all-cargo flights to keep supply chains moving and to meet specific freight transport needs, such as the airlift of vaccines and medical equipment.

PAL plans to offer year-round great value fares and competitive promotional offers as well.

It is developing innovations to its Mabuhay Miles frequent flyer program, expanding membership rolls and enhancing program terms and benefits.

PAL is accelerating its digital transformation initiatives to improve customer experience via a more personalized website and mobile app, a streamlined booking process with more flexible payment options, such as e-wallets and installment plans, enhanced self-service options for rebooking and check-in, and improved chat facilities and inter-active voice response (IVR) functions through PAL’s contact center.

Finally, PAL reiterated its commitment to fulfill all refund obligations.

Already, it has cleared over 99 percent of past refunds and is now back to normal processing times for refunds, except for some 2020 cases that require validation procedures mostly involving third party providers.