Philippine Airlines is all set to return 22 of its aircrafts as it finds different measures to deal with the rising financial pressure. Out of the 22 aircrafts, there are mostly Airbus and Boeing jets that will be returned to the lessors as a part of the financial restructuring program. The state airline has been struggling amidst the pandemic due to the reduced global travel demands.
It was only last week when Philippine Airlines filed for the Chapter 11 bankruptcy in the United States. As per the norms, the airline will be allowed to continue to the operations and generate fresh capital. President Gilbert Santa Maria of Philippine Airlines has said that the company is not expected to return to the pre-pandemic levels by at least 2024 to 2025 and will be returning 22 of its aircrafts to the lessors. After returning the aircrafts, the airline will be cutting down nearly a quarter of its fleet of 92 aircrafts.
On the other hand the airline is also in talks with the aircraft manufacturer Airbus to delay the delivery of 13 of its narrow body Airbus aircrafts. It is also in talks to cancel some of the orders beyond 2025 and 2030. The Philippine Airline in a statement released on 3, 2021 said that after filing for Chapter for Bankruptcy, it will be pursuing a financial restructuring plan. Santa Maria said that the chances for a fail of the current plan is very low.
The current plan for restructuring will cut $2 billion of its borrowings and that includes $505 million in long-term debt equity. That also includes the debt financing from the shareholders. The company also informed that it also has a $150 million of additional debt that was financed from the new investors. The coronavirus pandemic has affected a number of airlines across the globe as the demand for travel decreased remarkably. The most recent problem is the delta variant of the virus that has made things worse.
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