FLAG carrier Philippine Airlines (PAL) remained keen on tapping a foreign investor and has hired Morgan Stanley as financial consultant.
PAL president and chief operating officer Jaime Bautista told reporters last week that the United States-based bank was working with PAL in line with taking on either a financial or strategic airline investor.
He said Morgan Stanley was hired last year. This was the first time the carrier disclosed it had officially tapped outside expertise in its bid to get new investors.
Bautista declined to give added details, only noting that there were initial talks.
PAL has been in on-again, off-again discussions with foreign groups since taipan Lucio Tan retook full control of the flag carrier in 2014. Bautista noted that there was no rush to take on investors immediately, saying he was more keen on first boosting PAL’s business and valuation.
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. Bautista said PAL was still aiming for “five-star” status by 2020. The five-star status would be based on an audit by Skytrax. PAL is currently ranked as a three-star carrier.
The plans also come as PAL last week flagged challenges in the airline business coming from intensifying competition and overcapacity. Bautista said that would result in lower yields for airlines.
Lower fuel prices and increased flights had a positive impact on PAL’s bottom-line last year. The flag carrier said comprehensive income for 2015 jumped 560 percent to $134.4 million. PAL’s revenue also rose about 4.5 percent to $2.38 billion during the period.
Bautista said PAL would still be profitable for 2016 despite challenges. He was also confident the domestic airline industry would strengthen under the Duterte administration, which started last week.
“We’re optimistic the Duterte government will formulate an aviation policy that will address the major issues we are now facing in the industry,” Bautista said.
He said earlier that expansion constraints at the country’s busiest air hub, the Ninoy Aquino International Airport in Manila, was limiting growth. Bautista said PAL would also support plans for another international gateway close to Metro Manila. Miguel R. Camus