CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Philippine Airlines (PAL) sees profit after bankruptcy exit

By Ernie Sadashige

18:10, 4 January 2022

Passengers exiting a Philippine Airlines flight
The airline expects to generate operating income of $220m in 2022 – Photo: Shutterstock

Philippine Airlines (PAL) is starting the new year fresh, with new ownership and less debt.

The Filipino national carrier emerged from US bankruptcy protection on 31 December as a reorganised company with over $2.0bn (£1.5bn) in permanent balance sheet reductions from existing creditors. The company is also seeing improvements in critical operational agreements and additional liquidity including a $505m investment in long-term equity and debt financing from the airline’s majority shareholder.

PAL has the option of obtaining up to $150m in additional financing from new investors as well.

Majority ownership of the airline was transferred to bankruptcy lenders, who received 79.5% of the stock in the reorganised company, according to a court document.

Better routes, fewer planes

The airline was able to optimise its routes and restructure its fleet while in bankruptcy,

Following its restructuring, PAL is exiting unprofitable markets and flying only those routes that are, or can be made, profitable, while selectively increasing regional capacity in targeted growth markets.

PAL will return 21 surplus aircraft to lessors and lenders, thereby reducing its pre-bankruptcy fleet of 98 aircraft by 23%, lowering operating lease payments by $1.8bn and shedding $250m of bank debt.


0.72 Price
-0.490% 1D Chg, %
Long position overnight fee -0.0253%
Short position overnight fee 0.0033%
Overnight fee time 22:00 (UTC)
Spread 0.0125


249.42 Price
+5.620% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.18


477.93 Price
-0.860% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.23


147.02 Price
-0.540% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.27

The airline expects to generate operating income of $220m in 2022 and $364m in 2023. Based on the projections and available data, earnings before interest, taxes, depreciation, amortization and restructuring/rent costs (EBITDAR) margins are expected to improve from 2% in 2020 to 7% in 2021 and by as much as 27% in 2025.

Grounded by Covid-19

The carrier filed for Chapter 11 bankruptcy on 3 September 2021 in New York after the prolonged impact of Covid-19 rendered PAL unable to generate sufficient cash to fully meet its financial obligations.

PAL halted all commercial operations on 17 March 2020, resulting in the loss of $2bn in previously forecast revenue for 2020 and $370m of refunds.

The airline furloughed over 30% of its workforce in January 2021 and launched several cash-generating and cost-saving measures to improve liquidity before entering a consensual bankruptcy restructuring plan with primary aircraft lessors and lenders, original equipment manufacturers and maintenance, repair and overhaul service providers, as well as certain funded debt lenders.

Philippine Airlines was the only party included in the bankruptcy filing. The air carrier’s parent PAL Holdings and PAL Holdings subsidiary Air Philippines, known as PAL Express, did not file for bankruptcy.

Read more: Philippine Airlines files Chapter 11 bankruptcy in US court

Related topics

Rate this article

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?

Join the 570.000+ traders worldwide that chose to trade with

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading