The Philippine Airlines has filed for Chapter 11 bankruptcy in the United States to pursue a restructuring plan to keep the company afloat amid the Covid-19 pandemic, the flag carrier said on Saturday. The company aims to cut USD 2 billion in borrowings through a proposed restructuring plan, which needs court approval and will allow the carrier to reduce its fleet capacity by 25%, it said. It further said,  the move is "to allow the company to successfully restructure and reorganize its finances to navigate the Covid-19 crisis and emerge as a leaner and better-capitalized airline”.

The carrier said it has entered into a series of agreements with its lenders, lessors, aircraft and engine suppliers, and its majority shareholder, adding that it will continue to operate flights in the "normal course" of business according to safety regulations.

The company expects to continue to meet its current financial obligations throughout this process to employees, customers, the government, and its lessors, lenders, suppliers, and other creditors. The restructuring plan "empowers Philippine Airlines to overcome the unprecedented impact of the global pandemic that has significantly disrupted businesses in all sectors, especially aviation, and emerge stronger for the long-term", Philippine Airlines Chairman and CEO Lucio Tan said.

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