PAL expects deal with strategic investor sealed within first half
The operator of flag carrier Philippine Airlines is in “advanced” talks to sell a minority stake to a foreign strategic investor, a move its top official said would help advance ambitions to become a world-class airline.
Jaime Bautista, president of PAL Holdings Inc., told reporters Friday that the airline was in discussions with at least one party, and they were now hammering out the “nitty gritty” aspects of the potential transaction, including the price.
“The due diligence is done,” Bautista said, adding that an agreement or deal could be announced “hopefully in the first half” of 2017.
Bautista said talks so far involved less than 40 percent of PAL Holdings, which had a market value of about P133.4 billion. The buyer would contribute equity, management expertise and help open up new routes, he added.
Bautista gave further clues on their strategic investor, likely a big airline operator, saying this could pave the way for “possible membership” in an airline alliance.
While declining to say where the investor was based, he said it was not a Middle East-based airline, in response to a query. He said the potential partner had “experience in getting star ratings.”
He was referring to PAL’s ambition to become a five-star carrier by 2020, as determined by the closely followed Skytrax ratings.
PAL, a three-star carrier alongside Cebu Pacific and United States-based Delta Air Lines, wants to join the ranks of Skytrax’s top tier airlines, such as Japan’s ANA, Hong Kong-based Cathay Pacific and Qatar Airways.
Three years ago, PAL saw a change in ownership after taipan Lucio Tan again assumed full control of the flag carrier after buying out conglomerate San Miguel Corp.
Bautista said the airline was continuing to expand its fleet, as it plans to acquire two more Boeing 777-300ERs set for delivery in December this year and in January 2018, increasing its B777 fleet to 10 planes.
The new aircraft, to be used in long-haul routes including London, would mark the phase out its ageing Airbus A340s fleet. He said PAL would also take delivery of five Q400 turboprop planes made by Canada’s Bombardier Commercial Aircraft, and three Airbus A321s.
Bautista said PAL Holdings would likely post a profit for the full-year 2016, results of which have yet to be disclosed to the stock exchange.