PAL getting ‘feelers’ from likely investors
Lucio Tan-led Philippine Airlines (PAL) may still be struggling with internal labor woes, but it has already been generating interest from many deep-pocketed foreign groups that may be keen on investing in the national flag carrier.
PAL president and chief operating officer Jaime J. Bautista, however, said issues with the company’s workers would have to be resolved first before PAL could entertain prospective investors.
“There are several interested foreign groups,” he told the Inquirer. “They have been sending us feelers.”
Bautista had said earlier that the company was planning to take in strategic partners, or companies with interests in aviation that could bring in capital, technology and other best practices that could help PAL.
Although it remains the largest airline in the country in terms of revenue, PAL has struggled to compete with smaller budget airlines that are able to offer cheaper fares.
The Lucio Tan group itself has decided to put up its own budget carrier, AirPhil Express, which now services some of PAL’s flights and routes.
PAL also needs fresh capital to recover from massive losses it incurred due to a decision to hedge its oil costs for two years, forcing the airline to pay for expensive fuel even after prices in world markets crashed in 2009.
But Bautista said labor issues would have to be dealt with first before investors are allowed in.
“Who would want to invest in a company with these many problems?” he said. Bautista declined to say whether the Lucio Tan group was willing to cede control of PAL to new investors.
Last week, PAL’s operations were crippled by a “sit down” strike by its workers, who were scheduled to be terminated by the end of September. Workers were immediately put on forced leave with pay after the protests.
PAL’s operations are still limping because the third-party service providers have not been able to replace the 2,600 employees that were laid off.
