PAL Buyout A Done Deal

PAL Buyout A Done Deal

Tan, who has kept his 51 percent majority stake in PAL, will reacquire full control of the country’s flag carrier from incumbent PAL president Ramon Ang, who is concurrently the president and chief operating officer of SMC.

Both Tan and Ang, however, declined to discuss the reported buyback. Not yet, said Ang in a text message to The STAR when asked if the buyback was a done DEAL.

The reported return of PAL to the full control of Tan was the hot topic among local and Foreign Travel industry leaders attending the SKAL reception Friday night at the New World HOTEL.

There will be a formal announcement probably next week once finalized,former PAL president Jaime Bautista, who was present at the SKAL reception, said without elaborating.
Tan recently named Bautista to represent him in the PAL board.

Talks have been going with Ang on a move by the Lucio Tan Group to buy back SMC’s 49 percent stake in PAL.
In April 2012, SMC’s wholly owned subsidiary San Miguel Equity INVESTMENTS Inc. (SMEII) acquired a 49 percent equity interest in Trustmark Holdings Corp. for $500 million.
Trustmark owns 97.71 percent of PAL Holdings, which in turn owns 84.67 percent of PAL through PR Holdings Inc.
Ang has been steering PAL for the past three years. Highlighting his management was PAL’s acquisition of a new fleet of Airbus Aircraft as well as the opening of new routes.

After reacquiring full control of PAL possibly within the month, Tan’s group is likely to take in Abu Dhabi based Etihad Airways as partner, reportedly with a 40 percent stake.
As of end June, PAL has received a total of 17 Aircraft from Airbus, including 10 A330 and seven A321.
The fleet of the PAL Group including PAL Express comprised 85 Aircraft as of end June. 
PAL is set to retire 20 aging Aircraft, including four Boeing 747-400s, as part of efforts to transform the company into Asia’s Airline of choice and one of Asia’s youngest fleet, at 3.5 years.

PAL is back in the black after booking a net income of P1.49 billion in the second quarter of the year from a net loss of P1.08 billion in the same quarter last year.
Ang is still hopeful that the buyout talks would be completed within the third quarter of the year. The prolonged buyout talks have affected the operations of the national flag carrier, with its planned return to New York postponed to the first quarter of next year. The Airline plans to fly to JFK International Airport in New York via Vancouver at least four times a week starting March 15. The original schedule was for October this year, after the US Federal Aviation Administration upgraded the Aviation safety rating of the Philippines back to Category 1 from Category 2. 

It is also set to launch more direct Flights to Europe including Paris, Rome, Amsterdam, among others after successfully mounting direct Flights to London last November after the Airline was allowed by the European Union to enter European Airspace

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Mohini Porwal [ B Sc]
Trainee News Editor
Philipines Aviation News Editor