Metro Manila (CNN Philippines, September 6) — Flag carrier Philippine Airlines is bullish about completing its restructuring plan within the year, but its operations will fly high to pre-pandemic levels only in 2024 or 2025, officials said Monday.
Filing for Chapter 11 bankruptcy in the US will allow the airline to “stay in the rehabilitation process in the shortest possible time” compared to the years-long receivership program it had to deal with in 1999, its chief financial officer Nilo Thaddeus P. Rodriguez said in a virtual briefing.
Its president, Gilbert F. Sta. Maria, also said that since last year, the group has been in talks with creditors and lessors, assuring them of PAL’s survival if the plan to file for Chapter 11 would be pursued.
READ: Philippine Airlines files for bankruptcy protection as COVID continues to drain financials
Under its restructuring plan—which requires court approval, PAL intends to slash $2 billion in borrowings, cut its operating fleet capacity by 25%, and raise $655 million in new financing.
“The chance that this will fail is very, very small. We have a very high degree of confidence that this will be completed,” Sta. Maria said.
However, PAL’s pre-pandemic size remains far from reality as travel demand is expected to bounce back only until 2024 or 2025, PAL chief strategy officer Dexter C. Lee said.
READ: PAL operator sinks deeper into the red with ₱73B losses in 2020
“We don’t foresee demand coming back to pre-pandemic levels until 2024 to 2025. At that point in time, we don’t believe we will be at what our size was, which was $3 billion in revenue,” he said.
Reaching pre-pandemic revenues may happen “closer to the back half of the decade,” Lee said.
PAL assured that its passenger and cargo flights will continue during the rehabilitation program. The move to file for bankruptcy protection, which includes the hope to reduce fleet volume, will not lead to layoffs, Sta. Maria said.
