Warning, Philippines Airlines has entered chapter 11

[Old55]

From PAL web site;

On September 03, Philippine Airlines announced the voluntary decision to undergo financial restructuring under the U.S. Chapter 11 process. This step is part of a set of major agreements PAL has reached with substantially all of our stakeholders, and with one objective:  to build a stronger Philippine Airlines so that we can serve our customers better and continue our mission as a full-service airline and flag carrier of the Philippines. 

Chapter 11 is a globally recognized U.S. legal process that many airlines have used to reinvent themselves into more successful companies. The restructuring will enable PAL to emerge with fresh capital, lower debt and a sturdier financial foundation for the future.   

We will continue to fly and to serve our customers throughout this process:  it is business as usual for us. PAL continues to increase domestic and international flights as travel demand recovers with the easing of travel restrictions, and we will roll out new products and services that help make flying safer and more convenient.    

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.

After 80 years of flying the Philippine flag, we recognize that our nation will look up to PAL to sustain the links and connections that unite our island country and bring life to our communities and economy.  We pledge to work harder to earn your continuing support, to deliver buong pusong alaga(whole-hearted care) and provide a beacon of hope to Filipinos and travelers from all over the world. 

Thank you for your support for PAL’s recovery and renewal. 

https://palrecovery.com

Edited September 4, 2021 by Old55

[OnMyWay]

This has been rumored for a while, maybe even here on the forum.  And they owe a lot of people refunds.  People have complained that refunds take forever.  I wonder if these refunds are a large liability on the books that can be swept away.  

[Joey G]

46 minutes ago, OnMyWay said:

This has been rumored for a while, maybe even here on the forum.  And they owe a lot of people refunds.  People have complained that refunds take forever.  I wonder if these refunds are a large liability on the books that can be swept away.  

Have read the same about long refund waits on many respectable travel forums... I'd say if one is due a refund, purchased their ticket on a credit card, and have not gotten thier refund within 7 business days (might depend on country of purchase), I would file a claim with the credit card company.  It's not guaranteed you'll get a refund... they must have some money in the bank for the credit card to recover... but it's your best shot.

Personally... I haven't  flown on PAL internationally since 1988, only domestic since... I considered them to on the verge of bankruptcy for many decades.

Edited September 4, 2021 by Joey G
clarification

[Gandang Smile]

I was recently given a refund of about P7,000 from Air Asia, almost 12 months after the flight was cancelled. Testing times for all airlines across the world...

Even Alitalia, the Italian flagship carrier, has just completed restructuring a few months ago and will start to fly under another name (ITA instead of Alitalia) around October.

Welcome to the new normal... Some seem to like it more than others... 

[scott h]

6 hours ago, Joey G said:

Personally... I haven't  flown on PAL internationally since 1988

Airline of last resort,,,,,,,even before covid.......worst food in the world

 

[Old55]

My wife flew PAL to Cebu last month against my advice. She's to return Sep 20th..... I'll sure miss her.

[Jollygoodfellow]

PAL begins restructuring process, vows to meet all obligations

September 04, 2021
FLAG carrier Philippine Airlines, Inc. (PAL) announced on Sept. 4, 2021 that it has begun bankruptcy proceedings in the United States to be able to stay in business and restructure its obligations amid the coronavirus disease 2019 (Covid-19) pandemic.

PAL assured that “it is business as usual.”

All passenger and cargo flights will continue uninterrupted, subject to demand and travel restrictions. All tickets, vouchers and Mabuhay Miles remain valid.

Passengers and employees will not be affected. The company said it will continue to meet its current financial obligations to employees, customers, the government, and its lessors, lenders, suppliers, and other creditors.

In a statement posted by public relations firm Business Wire, the airline said it filed for a pre-arranged restructuring under the U.S. Chapter 11 process in the Southern District of New York.

It will complete a parallel filing for recognition in the Philippines under the Financial Insolvency and Rehabilitation (FRIA) Act of 2010.

Chapter 11 is a bankruptcy proceeding that allows the reorganization of a debtor’s business affairs, debts and assets.

PAL Holdings Inc., which is listed on the Philippine Stock Exchange, and Air Philippines Corporation, known as PAL Express, are not included in the Chapter 11 filing.

The move was initiated after PAL entered into a series of agreements with its lenders, lessors, and aircraft and engine suppliers as well as its majority shareholder.

“This is the best path forward to strengthen PAL as the Philippines’ global flag carrier,” the company said in a statement posted on its Facebook page.

The company said the restructuring plan will provide over US$2 billion permanent balance sheet reductions from existing creditors and allow the airline to consensually contract fleet capacity by 25 percent.

It also includes US$505 million in long-term equity and debt financing from PAL’s majority shareholder and US$150 million of additional debt financing from new investors.

“We welcome this major breakthrough, an overall agreement that enables PAL to remain the flag carrier of the Philippines and the premier global airline of the country, one that is better equipped to execute strategic initiatives and sustain the Philippines’ vital global air links to the world,” Dr. Lucio C. Tan, PAL chairman and CEO, said in the statement.

“We are grateful to our lenders, aviation partners and other creditors for supporting the plan, which empowers PAL to overcome the unprecedented impact of the global pandemic that has significantly disrupted businesses in all sectors, especially aviation, and emerge stronger for the long-term,” Tan added.

PAL said it is seeking approval from the US court to allow the following:

Build up flight frequencies on key regional and long-haul routes while expanding domestic networks from its hubs in Manila and Cebu.
All passenger and cargo flights will continue to operate, subject to demand and travel restrictions.
All valid tickets and travel vouchers will be honored.
All refund obligations will be fulfilled.
Mabuhay Miles and benefits will be honored.
Valid travel benefits for retired employees will be honored.
Ongoing suppliers and trade creditors will be paid in the ordinary course for goods and services delivered throughout this process.
Travel agencies and other commercial partners will experience no disruption in their interactions with PAL.
Special all-cargo flights to transport vaccines, medical supplies and sustain critical supply chains will continue to operate.

The airline also said it will continue to work with the Philippine government in mounting repatriation flights to bring overseas Filipino workers (OFWs) home. (Marites Villamor-Ilano / SunStar Philippines)
https://www.sunstar.com.ph/article/1906191/Manila/Business/PAL-begins-restructuring-process-vows-to-meet-all-obligations

[BC57]

7 hours ago, Joey G said:

Have read the same about long refund waits on many respectable travel forums... I'd say if one is due a refund, purchased their ticket on a credit card, and have not gotten thier refund within 7 business days (might depend on country of purchase), I would file a claim with the credit card company.  It's not guaranteed you'll get a refund... they must have some money in the bank for the credit card to recover... but it's your best shot.

Personally... I haven't  flown on PAL internationally since 1988, only domestic since... I considered them to on the verge of bankruptcy for many decades.

Airlines will surely take your money but they never want to give it back even though they are the ones to cancel flights. They need to fix that problem and fast.

[Snowy79]

My ex has been attempting to visit myself and current partner ( I know ) since the begining of August and is now on her third cancellation via Pal. They are desperate not to give refunds as some of the replacement flights are a joke.

Fly into Caticlan at 10:20am and return to Cebu the same day at 11am.  The other change they offered was fly to Caticlan on the 8th of Sept returning on the 3rd of Sept, they must have a time machine. 

Cebu Pacific were good, two cancellations and full refunds within 3 months.  Air Juan took 27 months and the involvement of the Civil Aeronautical Board before they paid up. 

[Mike J]

4 hours ago, Jollygoodfellow said:

PAL begins restructuring process, vows to meet all obligations

You cannot "meet all obligations" and at the same time eliminate "US$2 billion permanent balance sheet reductions".  Fancy language that says the primary lenders are taking a HUGE haircut.