Upgraded services and more routes are expected as Philippine Airlines (PAL) announces it is preparing to sign a major partnership agreement.
President Jaime Bautista, president of the country’s largest airline, said discussions were at an “advanced” stage and that all “due diligence” was complete.
“We’re just talking about some other nitty-gritty [details],” he said. The remaining discussions are related to the company’s valuation and how the foreign investment would be implemented.
PAL is operated by Philippine Airlines Incorporated, whose parent PAL Holdings is listed with a market capitalisation of about $2.7 billion.
Last December, PAL Holdings acquired low-cost airline Air Philippines Corporation, consolidating tycoon Lucio Tan’s aviation assets. Last week Mr Tan was named by Forbes Magazine as the third richest person in the Philippines, with an estimated fortune of $3.7 billion. (Read more here)
Mr Bautista said PAL would consider giving up as much as 40 per cent of the company, the maximum allowed by law, although the investor may choose to take less.
With the investment, PAL plans to purchase more aircraft, improve services and expand its international routes through code-share agreements.
The airline is hopes to achieve a five-star Skytrax rating by 2020 — a “global benchmark” based on the “quality of frontline product and staff service standards”.
PAL currently has a three-star rating, while regional competitors including Nippon Airways, Cathay Pacific Airways, Garuda Indonesia, Hainan Airline and Singapore Airlines are all graded five stars.