Courts oversee Southeast Asian airline reform

When Philippine Airlines filed for bankruptcy protection on 3-Sep-2021 it followed other major Southeast Asian airlines that have turned to courts to restructure their debts. The list of airlines in the region that have taken this course is steadily growing - and more are likely to follow before the COVID-19 crisis is over.

These airlines are restructuring to varying degrees, and therefore each bankruptcy process is different. Some are relatively quick as they have already reached agreement with creditors, while others are more contentious.

The airlines are also choosing a wide range of jurisdictions to file their bankruptcy petitions, using either their own countries or others with robust bankruptcy protection processes.

Some of the elements in these plans include cutting debt, renegotiating aircraft lease terms, and cancelling leases. Creditors have generally - but not always - accepted these relief proposals, thus avoiding liquidations.

For this reason there may actually be more airline start-ups than failures during the coronavirus pandemic period.