After months of struggle and speculation over its long term future, Philippine Airlines filed for Chapter 11 bankruptcy in New York.
The company plans to trim liabilities by US$2 billion through a restructuring plan, which would require court approval and PAL plans to reduce its fleet by a quarter.
According to the proposal PAL will receive about US$500 million in equity and debt financing and an extra US$150 million from new investors.
It says 90% of its lenders approve the plan.
PAL management told Bloomberg the proposal calls for a 35% reduction in the workforce.
Owner Lucio Tan said it will be a ‘major breakthrough’ for the airline if it gets court approval.
The airline has struggled for many years and last posted a profit in 2017.
It posted a big annual loss in 2020.
