After Philippine Airlines announced its restructuring plans, the Philippine flag carrier announced it received a US bankruptcy court approval for all “First Day” motions on an interim or final basis for the airline's voluntary restructuring.
On Friday (September 10), the US Bankruptcy Court for the Southern District of New York issued an order that would allow the Manila-based carrier to reduce the company's debt by USD $2 Billion. The order will allow the airline to continue regular operations, along with getting access to the first USD $20 Million of its debtor-in-possession financing totaling USD $505 million.
Under the order, the airline will continue to honor and maintain all customer programs, pay ongoing suppliers and trade creditors, and continue to pay all employee wages, compensation and benefit obligations through the Chapter 11 process.
“This is a significant step in our recovery plan and supports our ongoing operations to continue serving our valued customers and connecting the Philippines with the world. The combination of our substantial creditor support and the Court’s approvals enables us to progress toward an expedited emergence and full recovery. As travel demand increases and restrictions ease, we continue to increase domestic and international flights, while maintaining the safety and health of our passengers and employees,” Philippine Airlines' President and Gilbert F. Santa Maria said in a statement.
Philippine Airlines filed petitions for voluntary restructuring on September 3, and released details of its restructuring plan as it continues to weather the continued impact the COVID-19 pandemic.