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Business

PAL bullish as restrictions ease

Richmond Mercurio - The Philippine Star

MANILA, Philippines — Philippine Airlines Inc. has expressed a bullish outlook  on the back of the continued easing of travel restrictions and its successful emergence from voluntary Chapter 11 proceedings.

The flag carrier said its management sees a positive outlook with return of traffic following the government’s decision to suspend quarantine requirements on Feb. 1 and the resumption of visitors to the Philippines from Feb. 10 onwards.

The reopening of the country’s borders to foreign leisure and business travelers last Feb. 10 is expected to stimulate tourism travel to the country and lead to an increase in flights.

On March 1, the alert level status in Metro Manila and 38 other provinces was further lowered to Level 1, allowing intrazonal and interzonal travel regardless of age and comorbidities.

PAL said its management believes that the significant cost reduction and healthy cash balance would allow for a more sustainable operation that would enable it to survive travel restrictions and thrive when these restrictions are lifted.

PAL emerged from Chapter 11 as of Jan. 1, having reduced its fleet by 20 aircraft and its financial liabilities by $2.1 billion.

PAL said the financial restructuring is expected to substantially, if not fully, wipe the airline’s current deficit.

As of the date of its emergence from Chapter 11, PAL said it had a cash balance of $391 million.

The company is in the process of negotiating an additional $100 million three-year term loan from international lenders as part of its post restructuring steps.

PAL’s restructuring plan included infusion of $505 million in long-term equity and debt financing from its majority shareholder, alongside an option to obtain up to $150 million of additional debt financing from new investors.

The flag carrier intends to restore more routes and increasing flight frequencies as travel restrictions ease and borders reopen, including the resumption of regular flights to multiple cities in mainland China, full regularization of flights to Australia, and the commencement of historic new flight to Israel.

The company is also planning to roll out new product advancements this year as part of a commitment to continuously upgrade services and the overall customer travel experience.

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