Airline News
PAL ownership decision imminent, mulls international expansion
September 9th 2014
A San Miguel Corp decision on whether it will sell its stake in Philippine Airlines' parent PAL Holdings Inc. to business tycoon and partner Lucio Tan, or buy Tan out, is expected for later this week. Read More »
Tan has said he wants to buy out San Miguel, and an exit would allow the country's biggest conglomerate to focus more on its food and beverage business.
San Miguel owns 49% of a holding company that controls around 90% of PAL, which has a market value of US$3.2 billion. Although Tan owns 51% of the holding company, management control of the airline rests with San Miguel.
Public opinion in the Philippines is against Tan taking over PAL as many seem to suggest he has no expertise in running an airline, and others saying he is involved in illicit business deals and therefore unfit to head the national carrier.
Meanwhile, PAL is eyeing the United States for international expansion. It has announced its return to New York’s JFK with four-weekly services connecting it with Manila’s Ninoy Aquino from March 15, 2015.
Both the outbound and inbound leg are routed via Vancouver with PAL having fifth freedom rights between the city pair, just like Cathay Pacific Airways.
The airline had last served New York 17 years ago but suspended flights as the island nation’s economy slumped in the 90’s in the wake of the Asian Financial Crisis.
The move to expand flights in the United States and Canada comes after the Philippines was restored to Category 1 status by the United States Federal Aviation Administration earlier this year.
PAL’s president Ramon Ang has since stepped forward and revealed that his carrier is eyeing Miami, San Diego and Chicago as possible new destinations in the US. He also said PAL is planning to increase frequencies to its current US ports of Honolulu, Guam, San Francisco and Los Angeles.
PAL swung to a net profit of PHP1.46 billion (US$33 million) in the April-June quarter from a PHP1.06 billion net loss a year ago.
In other news, PAL has just retired its last B747-400 aircraft after over 35 years of B747 operations. PAL’s B747-400s have been replaced by B777-300ER aircraft.
