The Philippine Airlines (PAL) plans to seek court protection from creditors as it pursues debt restructuring with the government to survive the impact of the COVID-19 pandemic, Philippine Finance Secretary Carlos Dominguez said on Wednesday.
Dominguez said the PAL, partly owned by Japan’s ANA Holdings Inc, informed the Philippine government of its plans recently. However, the finance secretary did not provide details as to what kind of government assistance PAL needs.
The PAL has not commented on the plan.
Last month, the PAL announced its plans to cut up to 35 percent of its total more than 7,000 workers “as part of a larger restructuring and recovery plan” to curtail losses brought about by the pandemic.
The listed operator of the PAL reported 198 billion pesos (roughly 4.11 billion U.S. dollars) in lease and long-term debts by end-September.
The PAL also suspended capital expenditures, which are mainly for the acquisition of new aircraft. It also put in place a skeletal workforce and reduced management salaries and non-essential expenses.
The Philippines imposed in mid-March a lockdown on the main island of Luzon to stem the spread of the coronavirus.
The lockdown forced local airport closures leading to the suspensions of all incoming and outgoing flights, except for international and domestic sweeper flights to repatriate foreigners out of the Philippines and to bring in stranded Filipinos from abroad.