Philippine Airlines is in talks with plane lessors about reducing its fleet size and has told them it’s considering a Chapter 11 filing in the U.S. to carry out a restructuring, according to people familiar with the plan.
The airline could return at least two Airbus A350s to lessors and four of the 10 Boeing 777s in its fleet, some of the people said, asking not to be identified as the information is private.
Two A350s are in the process of being taken back by aircraft lessors and will be redeployed to other carriers, one person said. Prior to the negotiations, Philippine Airlines had six A350s.
One lessor reached an agreement with the airline for it to keep a 777 and an A330, a person involved in the discussions said, asking not to be identified. Work on restructuring lease contracts and reaffirming commitments is ongoing, another person said.
Philippine Airlines is working on documentation for a pre-packaged bankruptcy, people familiar said, with Seabury Capital advising on the restructuring. Cirium had previously reported that Seabury was an adviser on the Chapter 11 plan. Seabury didn’t immediately respond to emailed requests for comment.
Founded in 1941, the airline said in a statement it is working with stakeholders “on a comprehensive restructuring plan” that will enable it to emerge from the global crisis financially stronger. Flights and operations won’t be affected in any restructuring, it said.
Representatives for Airbus said the company doesn’t comment on fleet planning at individual airlines. Boeing declined to comment. Philippine Airlines’ lessors include GE Capital Aviation Services and Goshawk Aviation, according to Cirium. Calls to GE Capital Aviation’s Singapore office and an email to Ireland-based Goshawk seeking comment weren’t immediately returned during Asia hours.
Philippine Airlines would join dozens of carriers and other aviation businesses, including Latam Airlines Group and lessor AeroCentury, in being felled or…