Philippine Airlines files for bankruptcy
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
Last Friday, Philippine Airlines (PAL) filed for U.S. Chapter 11 bankruptcy according to Bloomberg. While this is an indication of serious financial trouble within a company, it is not (yet) shocking for flyers – the airline is permitted to continue normal operations while trying to restructure debt and other financial means in order to survive.
Tickets will keep their value and the airlines Mabuhay Miles loyalty program will keep operating as usual.
Want more airline-specific news? Sign up for TPG’s free new biweekly Aviation newsletter.
While it may seem counter-intuitive that the Manila-based airline is seeking bankruptcy in the United States, this is often the case with multinational companies due to them having an entity in the U.S. for regulatory reasons. With this bankruptcy case, filed in New York, the airline hopes to be released of some debt and to reduce its fleet by 25%.
Both Boeing and Airbus planes will be returned to their lessors, bringing the fleet down from 92 to 70 aircraft. Also, the airline will ask Airbus to delay the arrival of 13 new narrow-body jets. Like other airlines worldwide, PAL has temporarily grounded some of its fleet while demand for air travel remains low.
In many similar cases, we have seen struggling South East Asian airlines transform into a more regional-first airline. For example, Malaysia Airlines, Garuda Indonesia and Thai Airways have all become more focused on their regional operations after restructuring processed triggered by decreased demand due to the pandemic.
Currently, there is no indication if the fleet reduction will impact mainly regional or mainly intercontinental operations. The airline has been aiming for a higher quality of intercontinental service by offering flights on new Airbus A350s to prime destinations like New York (JFK) and London Heathrow (LHR) in recent years.
However, given the strong network in the region and relatively few longer flights, it might make more sense for the airline to put regional flights first.
Times are still tough for the airline industry. The intercontinental airlines, with flag carriers such as British Airways, KLM and Lufthansa, rely on business travel to make money. Although passengers numbers as a whole are on the rise again, the proportion of business versus leisure travelers is way off compared to pre-pandemic numbers. This balance leads to leisure-heavy airlines flourishing, while more traditional airlines are still struggling to stay afloat.
Featured image of a Philippines Airlines Airbus A321 by Fabrizio Gandolfo/SOPA Images/LightRocket via Getty Images
Welcome to The Points Guy!
Earn 50,000 bonus miles and 5,000 Medallion® Qualification Miles (MQMs) after you spend $2,000 in purchases on your new card in the first three months of card membership. Plus, earn up to $100 back in statement credits for eligible purchases at U.S. restaurants in the first three months of card membership.
With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.
- Earn 50,000 Bonus Miles and 5,000 Medallion® Qualification Miles (MQMs) after you spend $2,000 in purchases on your new Card in your first 3 months.
- Plus, earn up to $100 back in statement credits for eligible purchases at U.S. restaurants with your card within the first 3 months of membership.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
- Earn 1X Miles on all other eligible purchases.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights.
- Fee Credit for Global Entry or TSA Pre✓®.
- Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees