ARC NEWS
PAL exits US Chapter 11 bankruptcy proceedings
January 05, 2022
Philippine Airlines has emerged from its voluntary Chapter 11 proceedings after completing its financial restructuring within four months. PAL says it "has streamlined operations with a reorganised fleet" and is "better capitalised for future growth", in a 3 January filing to the Philippine Stock Exchange. Under the newly effective recovery plan, PAL says it has the option to obtain up to $150 million in additional financing from new investors. PAL's reorganisation plan, approved by the US bankruptcy court on 17 December, provides for over $2 billion in permanent balance sheet reductions from existing creditors, improvements in its critical operational agreements and additional liquidity including a $505 million investment in long-term equity and debt financing from its majority shareholder. PAL was the only party included in the Chapter 11 filing in September, while parent PAL Holdings and subsidiary PAL Express were not included in the filing. Debevoise & Plimpton, Norton Rose Fulbright US and Angara Abello Concepcion Regala & Cruz were PAL's legal advisors. Seabury Securities was the financial advisor and investment banker. Director Lucio Tan III states: "Philippine Airlines stands ready to help grow back the Philippines’ local and international air travel markets in ways that renew the tourism industry, serve the needs of global citizens including overseas Filipinos and contribute actively to the recovery of the Philippine economy." PAL says it intends to reinvest in its operations to better serve customers. This includes its nonstop flights to the USA, Canadian East and West coasts, Hawaii, Brisbane, and Melbourne. PAL also operates to multiple cities in Japan, Australia and the Middle East, along with schedules to Hong Kong, Korea, Taipei, Singapore, Thailand, Indonesia, Vietnam and Malaysia. The carrier says its domestic network encompasses trunk routes to the major cities of Visayas, Mindanao and Luzon, while its inter-island services will provide access to the Philippines' tourist destinations and paradise islands. Additionally, the carrier plans to restore more routes and increase flight frequencies as travel restrictions ease and borders reopen; build on codesharing and interline partnerships; and expand its newly-established cargo business, among other things. In a separate statement, Singapore-based lessor Avation says that PAL has retained a Boeing 777-300ER aircraft on lease in accordance with its restructuring plan. The airline has exited bankruptcy and received court approval for its restructuring plan, which was effective 31 December 2021, the lessor notes. Avation says that under the terms of restructuring, it has been collecting monthly rent on the aircraft based on hourly rates of utilisation in the period from September 2021. The lessor is also entitled to receive a cash payment, in or around January 2022, relating to utilisation from 1 September 2020 to 3 September 2021, it says. It will also get a promissory note for 25% of the aggregate rent outstanding for the period prior to 1 September 2020. Astates: "The lease will continue until the original scheduled termination date, from 1 March 2022 the lease payments will revert to a fixed market rate rent along with cash maintenance reserves."


Denmark aims for fossil-free domestic flights by 2030
January 05, 2022
Denmark has become the second Scandinavian country to set a target for all domestic flights to be fossil fuel-free by 2030. Danish Prime Minister Mette Frederiksen said in her New Year's address to the nation that by 2025, "Danes must be able to fly green on a domestic route", and by 2030, "we must be able to fly completely green when we fly domestically in Denmark". In her speech, Frederiksen acknowledged that the target would be difficult to achieve and did not detail any specific plans for how the goal would be met, but said that "we're already on our way" and "skilled researchers and companies are working on the solutions". Denmark's pledge follows a similar goal set by the Swedish government in 2019. Sweden is aiming for all domestic flights to be fossil fuel-free by 2030, and for all flights departing from Sweden to be fossil-free by 2045. Norway has set a target for all short-haul flights to be 100% electric by 2040.


Regulatory body gives green light to Gol's MAP purchase
January 04, 2022
Brazilian competition authority CADE has approved Gol's acquisition of regional operator MAP Linhas Aereas. Gol disclosed in June 2021 that it had agreed to acquire MAP for R$28 million ($5 million) in cash and stock. The low-cost carrier intends to substitute MAP's ATR turboprop fleet with larger aircraft. The regional airline's fleet consists of four ATR 42’s and three ATR 72’s, data shows. Gol in September signed a non-binding letter of intent with Irish lessor Avolon to acquire or lease 250 electric vertical take-off and landing (eVTOL) aircraft as part of its continuing investment in regional air transport in Brazil.


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