The airline Philippine Airlines announced on Saturday having placed itself under the American bankruptcy regime in order to reduce its debt, after the fall in its activity trained by the coronavirus pandemic, but will continue to ensure its air connections.

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The National Philippine Company (PAL) said that the bankruptcy would allow it to restructure its contracts and reduce its debt by at least $ 2 billion, while obtaining $ 655 million in capital when it will leave the procedurechapter 11."Philippine Airlines will continue its usual activities while finalizing the restructuring of its network, its fleet and its organization," said Nilo ThaddeusRodriguez, vice-president and financial director, in a video press release.

PAL has announced reducing its fleet by 25% and renegotiating its contracts to reduce rental payments.In the United States, the use of Chapter 11 is a system that allows a company that can no longer reimburse its debt to restructure from creditors.As part of the agreements concluded with suppliers, lenders and donors, Nilo ThaddeusRodriguez said PAL will get $ 505 million to execute the recovery plan.This money will then be converted into actions of the airline and long -term debt.

The company will also obtain an additional $ 150 million in the form of loan funding when it comes out of the restructuring process "in a few months," said Mr..Rodriguez.The volume of Philippine air trips collapsed by 75%, from around 30 million passengers in 2019 to seven million last year, due to restrictions linked to the pandemic, said president of PAL, Gilbert SantaMaria, in the same video.

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The carrier canceled more than 80.000 flights, losing $ 2 billion in revenues and eliminating 2.300 posts.Santa Maria said that PAL now ensures 21% of the flights before the pandemic, around 70% of the destinations usually served.