PAL in ‘talks’ with investor for global expansion

A top executive of flag carrier Philippine Airlines said the firm was “in talks” with an investor to help it achieve the goal of becoming a five-star carrier by 2020.

PAL president and chief operating officer Jaime Bautista described the talks as “very preliminary,” while declining to give additional details.

Taking a partner, either for money or for strategic purposes, like another airline, has always been in the cards since taipan Lucio Tan retook full control of the flag carrier in 2014.

PAL has been in an on-again, off-again talks with foreign groups, and in more recent interviews, Bautista said the carrier was more keen on bolstering its business and valuation rather than considering investors.

“It’s just talks,” Bautista said on the sidelines of an event marking the launch of PAL’s Manila-Saipan flights that would begin on June 15, 2016. Saipan would be PAL’s 44th international destination.

Bautista said previously a strategic partner made sense for PAL, which is seeking to expand its presence globally.

In an interview last March, Bautista said PAL had firmed up a multi-year strategy to improve services, expand its network and reconfigure existing Airbus A330 aircraft to tap higher yields.

Part of the strategy was to erase any ambiguity over PAL’s market positioning and rank it among the top legacy carriers in the world, he said.

The five-star status would be based on an audit by Skytrax. PAL is currently ranked as a three-star carrier.

The company would also continue to boost its fleet.

Bautista said PAL had its 75th plane delivered last March 15, 2016. He said they would get six more planes this year: two long-range Boeing 777-300ERs and four Airbus A321s.

Last February, it placed an order for six Airbus A350-900s, which are next-generation long-haul planes to be used for non-stop Manila to New York flights, and potentially, new European destinations such as Amsterdam, Hamburg, Rome and Paris.

Due to strong demand, Bautista said the commercial Philippine aviation sector this year would likely grow between 8 percent and 9 percent, faster than the 6 to 7 percent growth worldwide. For PAL alone, passenger volume would hit 14 million in 2016, up from 12 million last year, he said.