A U.S. bankruptcy judge in New York has yet to approve a $ 2 billion debt reduction plan.
Under its majority shareholder plan, Philippine Airlines will receive $ 505 million in equity and debt financing and $ 150 million in debt financing from new investors. According to Bloomberg, 90 percent of lenders support the plan.
The restructuring plan allows the airline to reduce its naval capacity by 25 percent. This means that about twenty aircraft will leave the Navy. Earlier this year, Philippine Airlines already cut jobs by 35 percent.
CEO Lucio Tan said the restructuring plan will help the airline deal with the unprecedented impact of the Corona crisis. In the long run, this plan should strengthen the position of Philippine Airlines.
Through this move, Philippine Airlines is following the example of Latin American airlines Avianca, LATAM and Aeromexico, which already opted for bankruptcy protection in the United States last year. All three companies have already made progress with their restructuring.
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