Philippine Airlines will return 22 aircraft, reassuring survival

MANILA, Sept. 6 (Reuters) – Philippine Airlines [RIC:RIC:PHL.UL] will return 22 planes, mostly Airbus (AIR.PA) and Boeing (BA.N) planes, to landlords as it pursues a financial restructuring program to survive after the pandemic has decimated global travel, executives said Monday.

Philippine Airlines filed for Chapter 11 bankruptcy in the United States last week, which allowed it to continue operating and generate new capital.

As the company does not expect a return to pre-pandemic levels by 2024 to 2025, the carrier will return 22 aircraft to landlords, Philippine Airlines President Gilbert Santa Maria told a news conference.

Philippine Airlines will end up with 70 aircraft after cutting about a quarter of its fleet of 92 aircraft.

The flag carrier has also negotiated with Airbus to postpone the delivery of 13 narrow-body Airbus aircraft, with the option to cancel some orders beyond 2026 to 2030, said Nilo Thaddeus Rodriguez, the company’s chief financial officer. .

After filing for bankruptcy in Chapter 11, Philippine Airlines said Friday it was pursuing a financial restructuring plan.

“The chance of this failing is very small,” Santa Maria said.

The proposed rehabilitation plan will reduce $ 2 billion in loans. It also includes $ 505 million in long-term debt and debt financing from the airline’s majority shareholder, PAL Holdings Inc. (PAL.PS), and $ 150 million in additional financing for new investors, the company said.

PAL Holdings is partly owned by the Japanese ANA Holdings Inc (9202.T).

Report by Neil Jerome Morales Edited by Ed Davies

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