Jun 172013

MANILA, Philippines – Flag carrier Philippine Airlines (PAL) is still on the lookout for new aircraft as part of its fleet modernization program.

PAL has already ordered around 70 new aircraft that will lower operating costs moving forward, its top official said last week.

“Slowly, we are looking at different aircraft types,” PAL president Ramon S. Ang said when asked if the airline is still planning to buy more airplanes.

Ang said PAL is also factoring in “good opportunities, good prices and good performance” for further aircraft acquisitions.

Since the entry of San Miguel Corp. (SMC) in April 2012, PAL has embarked on a massive refleeting program aimed at acquiring 100 new aircraft to replace its existing fleet. It expects to save as much as $400 million from fuel and maintenance costs per year as part of its refleeting program.

PAL entered into a $7-billion contract with Europe’s EADS Group in August for the acquisition of 54 Airbus aircraft consisting of 34 A321ceo, 10 A321neo, and 10 A330-300s, and another $2.5 billion deal in September to exercise an option to buy 10 more A330 aircraft.

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Ang, who is also president and chief operating officer of SMC, said PAL’s order is already more than 70 aircraft.

Diversified conglomerate SMC owns 49 percent of PAL and is in charge of the airline’s management.

“Our investment in PAL and sister airline PAL Express is also an important piece in our overall vision for SMC,” said SMC chairman and CEO Eduardo M. Cojuangco Jr. liquor.

“The airline business offers strong synergies with our existing businesses, giving us a new and very effective route to market our fuel, food and beverage products,” Cojuangco said, adding that it will also allow SMC to invest in the regional aviation industry.

For his part, tobacco and airline magnate Lucio Tan is planning to sell his 51-percent stake in PAL to a group of investors.

Last week, Ang welcomed the potential sale, adding that the possible entry of a reputable and full service airline partner will benefit Asia’s oldest aviation firm. SMC has a right to match any offer by the investor group should Tan decide to sell his take in the.

In the nine months of its fiscal year ending March 2012, PAL Holdings Inc. trimmed its losses by 24 percent to P2.74 billion compared with P3.59 billion as total revenues climbed by 2.4 percent to P55.68 billion from P54.38 billion on the back of higher revenues from its passenger and cargo businesses.

PAL is banking on the ongoing refleeting program involving the acquisition of fuel efficient aircraft as well as the impending lifting of the ban on local airlines to fly to Europe and to mount additional flights to the US would help PAL return to profitability next year.

PAL maintains and operates 42 aircraft comprising of five Boeing B747-400s and four B777-300ERs as well as four Airbus A340-300s, eight A330-300s, 17 A320-200s, and four A319-100s.

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