PAL eyes strategic partner for US, Europe expansion
Louella Desiderio (The Philippine Star) - October 9, 2014 - 12:00am

MANILA, Philippines - Flag carrier Philippine Airlines Inc. (PAL) will draw up a business plan before taking in strategic partners that would allow it to expand operations in the US and Europe.

“We first have to prepare a business plan that will be attractive to a strategic partner,” PAL general manager Jaime Bautista told reporters.

At the moment, Bautista said there are no talks to get strategic partners.

The flag carrier, which is looking to reverse net losses incurred in the last two years this year, is undertaking a review of its operations.

As the review is being undertaken, the carrier is working to reschedule the delivery of new Airbus planes with 10 expected next year and another 10 in 2016 to ensure such can be used to cater to the market.

Bautista said discussions have to be made with Airbus to reschedule the delivery.

“We hope we can be profitable this year,” he said.

Think tank Centre for Asia Pacific Aviation (CAPA) said earlier the flag carrier needs to take in a new strategic partner after the group of taipan Lucio Tan successfully bought back the stake of diversified conglomerate San Miguel Corp. (SMC) in the airline.

In its aviation analysis, the think tank cited the need for PAL to have more and stronger partnerships to be able to mount additional flights to the US and Europe.

PAL , however, recently entered into a partnership with All Nippon Airways of Japan and Dubai-based Etihad Airways and CAPA said that while both have ruled out potential investments in the carrier for the time being, PAL could look to re-engage with the two while also exploring other potential suitors that could come to the table with both a comprehensive codeshare partnership and capital.

Last month, the Tan Group bought back the 49-percent interest of SMC in PAL for $1.3 billion. SMC’s wholly-owned subsidiary San Miguel Equity Investments Inc. acquired a 49-percent equity interest in Trustmark Holdings Corp. for $500 million.

Trustmark owns 97.71 percent of PAL Holdings, which in turn owns 84.67 percent of PAL through PR Holdings Inc.

Following the US Federal Aviation Administration’s move to upgrade the country’s aviation safety rating back to Category 1 from Category 2 last April, PAL is gearing up for flights to New York via Vancouver by March 15 next year, as well as flights to other major cities including Chicago, Miami, and San Diego.

Bautista said the US is seen to be a promising route for PAL.

As for Europe, the firm is not considering additional flights at the moment, he revealed.

ALL NIPPON AIRWAYS OF JAPAN AND DUBAI ASIA PACIFIC AVIATION BAUTISTA ETIHAD AIRWAYS FEDERAL AVIATION ADMINISTRATION HOLDINGS INC JAIME BAUTISTA LUCIO TAN NEW YORK PAL
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