Biz Buzz: The sore thumb
The burgeoning partnership between San Miguel Corp. and the Lucio Tan group in flag carrier Philippines Airlines has taken off smoothly, with PAL’s key people described as “very supportive” of, and “cooperative” with, the change in management control and the proposed changes in processes.
Ironically, what’s sticking out like a sore thumb is budget airline affiliate Airphil Express as initial meetings reeked of lack of enthusiasm, and even some sort of resistance to the new bosses, according to our reliable grapevine.
According to industry sources, San Miguel people tasked to review the processes of the budget carrier were surprised with the unpalatable treatment from the Airphil Express old-timers. Despite accounting for a big bulk of the losses of the aviation group, Airphil Express was operating as an autonomous republic and these “oldtimers” would like it to remain so.
The “newcomers” could only theorize that because Airphil Express had been given much leeway to be able to compete with Cebu Pacific, its people were used to doing things their way and hesitant to seek or accept new guidance.
Ramon S. Ang, the new airline CEO, has of course given word that PAL would return to profitability in a year’s time. It has turned out that the smaller airline operation—which inevitably has to piggyback on PAL’s balance sheet for its own refleeting—could be a bigger challenge.—Doris C. Dumlao
‘Cool’ carrier
Several months after receiving its first aircraft—and operating them on domestic routes where they were underutilized—Air Asia Philippines will finally be able to use them for international flights.
Indeed, the local unit of Malaysian budget carrier Air Asia Berhad will begin its regular Clark-to-Kuala Lumpur service starting June 9.
This was made possible after Air Asia Philippines (majority-owned by presidential cousin Tony Boy Cojuangco, Maan Hontiveros and Mikee Romero, in partnership with its Malaysian parent) finally received its clearance to operate from the International Civil Aviation Organization (ICAO).
According to our source, Air Asia Philippines’ Kuala Lumpur service will soon be followed by a Clark-to-Hong Kong service.
Under the ICAO’s approved license, Air Asia Philippines will be assigned the three-letter code “APG” (like “PAL” or “CEB”).
As far as flight call signs for air traffic control radios are concerned, however, the airline is a newcomer and, as such, can no longer touch PAL’s “Philippine” (as in “Philippine 102, ready for takeoff…”) or “Cebu.”
In fact, Air Asia’s originally requested call sign—“Phil Asia”—was amended by ICAO to prevent confusion with other airlines flying regional routes.
Not to worry. Its new assigned call sign—“Cool Red”—is … well … cool.—Daxim L. Lucas
David vs Goliath
Carlotta Tan of Promolabels, who came to prominence for being involved in the supposed P1-billion coffee deal at Pagcor, is embroiled in another legal tussle, this time involving her shuttered restaurant, Le Bistro Vert in Makati City.
Le Bistro Vert closed on Dec. 24, 2011, because a sewer pipe burst within the Fraser Place condominium, causing putrid water to leak down to Le Bistro Vert’s ceiling, and down to the men’s toilet and other parts of the ground floor, causing extensive damage to the restaurant.
Tan’s Promolabels Specialty Shop and partner Ecofoods of the Earth Inc. consequently terminated their lease and sought P14 million in damages from Singapore-based Fraser and Neave Ltd., which manages Fraser Place.
Fraser and Neave has not given in to the plea for damages and has instead demanded for the group to continue paying rent.
Tan and her partners, however, are not backing down and are ready to file an even bigger damage suit to compensate for the “damage to brand equity.”
Who’s representing the Le Bistro group? No other than Lorna Patajo-Kapunan, who also represents Alicia Arroyo, who in turn has a pending claim on the estate of her late estranged husband, Iggy Arroyo.—Tina Arceo-Dumlao
Sold out
The group of tycoon Henry Sy wants a big bang for SM Arena’s public debut, and so there will be with the two-day performance of American pop superstar Lady Gaga starting Monday. Despite all the controversy encountered by the singer in this Asian tour, the tickets for the two-day concert including the premium corporate boxes are all sold out, according to SM Prime Holdings chief finance officer Jeffrey Lim.
On this opening day, SM Arena is thus expected to operate at full capacity (15,000 to 18,000 depending on the stage layout).
And because Lady Gaga is now even more famous among Filipinos than her first visit a few years back, all roads will lead to SM Arena.—Doris C. Dumlao
‘SEC supports innovation’
The Securities and Exchange Commission wrote to Biz Buzz last week, saying that the corporate regulator is, in fact, supportive of innovations like short-selling and securities borrowing and lending being introduced in the Philippines (contrary to assertions made by some frustrated market players).
According to the SEC, it had in fact approved the rules governing short-selling as early as June 2006.
The regulator tossed the blame back to the Philippine Stock Exchange, saying it was the bourse that still had to finalize proposed securities borrowing and lending rules and submit them to the regulator for consideration.
The SEC also outlined a series of policies they have approved over the years, adding that, “in short, the current regulatory frameworks of SEC and PSE allow the conduct of short sale and securities borrowing and lending activities.”
Regulators are also working double time to release rules on exchange traded funds and real estate investment trusts, it added.
Okay.—Daxim L. Lucas
Fund raising
Philex Petroleum was a surprise addition to the MSCI Small Cap Index. But even before that, it has gotten a lot of attention due to better-than-expected prospects for its gas exploration project in Recto Bank known as Service Contract 72 and potential partnership with China’s biggest offshore oil and gas producer, China National Offshore Oil Corp. (CNOOC).
So is the company willing to sell new shares to the public?
“Money has got to be raised for a $75-million [drilling] work program through August 2013 at PXP level and at the UK-listed Forum Energy level. On what shape and form that will take, we don’t know yet,” said PXP chair Manuel V. Pangilinan.
If the exploration project gets deeper and more expensive, that’s when the company would have to look at other options. Hence, the talks with CNOOC.
Meanwhile, MVP and Ricky Razon—who has a 30-percent stake in SC 72—have not spoken yet since the latter’s public rebuke of the former’s meetings with the Chinese.—Doris C. Dumlao
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