Airlines in the Philippines

[seven13]

JED is expected to start by Dec1 but no announcement has been made yet. Nauna pa si JFK but it's not yet listed on the online booking.

5J is bound to start DMM. I haven't seen their JED yet (or I might have miss the news).


What's more puzzling is a lot of changes is currently being applied inside. Airboy should know about it. I'm not sure I can divulge what they are.

[romantic_guy08]

seven13 wrote

JED is expected to start by Dec1 but no announcement has been made yet. Nauna pa si JFK but it's not yet listed on the online booking.

5J is bound to start DMM. I haven't seen their JED yet (or I might have miss the news).


What's more puzzling is a lot of changes is currently being applied inside. Airboy should know about it. I'm not sure I can divulge what they are.

No announcement yet from 5J regarding JED... I think they don't have enough rights in Saudi to start JED... they are settling for DMM and RUH...

Will PR/GAP launch a second daily flight to DXB, in lieu of the codeshare with EK that was disapproved?

[seven13]

romantic_guy08 wrote

seven13 wrote

JED is expected to start by Dec1 but no announcement has been made yet. Nauna pa si JFK but it's not yet listed on the online booking.

5J is bound to start DMM. I haven't seen their JED yet (or I might have miss the news).


What's more puzzling is a lot of changes is currently being applied inside. Airboy should know about it. I'm not sure I can divulge what they are.

No announcement yet from 5J regarding JED... I think they don't have enough rights in Saudi to start JED... they are settling for DMM and RUH...

Will PR/GAP a second daily flight to DXB, in lieu of the codeshare with EK that was disapproved?

I guess. GAP cabin crews had started their business class service training (arianespace also confirmed it in previous post).

[Arianespace]

So sorry about the confusion. I was thinking about Jeddah and Dammam at the same time.

5J will start DMM in October while PAL planned to do it in JED and DOH also in October. MCT is i think scheduled for December. But right now everything is screwed up at PR with only JED coming online in December. Thus my question.  

Will PR/GAP launch a second daily flight to DXB, in lieu of the codeshare with EK that was disapproved?

PR will have to fly the other flight. Not 2P because they are already flying.

[romantic_guy08]

Arianespace wrote

 

Will PR/GAP launch a second daily flight to DXB, in lieu of the codeshare with EK that was disapproved?

PR will have to fly the other flight. Not 2P because they are already flying.

So it will have to be PR that will fly the second flight? I mean they can't codeshare or "wet lease" with 2P anymore? Since the contention was leasing the rights to a foreign carrier and that it should be flown by a Filipino carrier.

[seven13]

Honestly speaking, I was disappointed (big time) with the bare amenities of the new fleet BUT I was happy at the same time because after XXX number of years PAL was able to expand its routes. Opening a lot of key cities! DRW, BNE, YYZ, DMM, RUH, DXB, AUH, CAN, LHR and JFK (soon). I hope with the reacquisition of management control (although nothing is final until the handshake) these expansion to JED, MCT and DOH will still continue.

Just my 2¢

[Arianespace]

romantic_guy08 wrote

So it will have to be PR that will fly the second flight? I mean they can't codeshare or "wet lease" with 2P anymore? Since the contention was leasing the rights to a foreign carrier and that it should be flown by a Filipino carrier.

Well they can still do code-share with UAE and GAP. But PAL must use the rights granted to them or lose it to CEB. Usage of rights means they have to fly.

seven13 wrote

Honestly speaking, I was disappointed (big time) with the bare amenities of the new fleet BUT I was happy at the same time because after XXX number of years PAL was able to expand its routes. Opening a lot of key cities! DRW, BNE, YYZ, DMM, RUH, DXB, AUH, CAN, LHR and JFK (soon). I hope with the reacquisition of management control (although nothing is final until the handshake) these expansion to JED, MCT and DOH will still continue.

We did discuss these ameneities in the other forum long before they were unveiled and the direction PAL is going. But with a target market in mind (OFW's) I kinda think RSA is successful in that regard notwithstanding our displeasure. We can always ride a better airline, and there will always be a cheaper ride back home.

[seven13]

Yup. I totlly understand that they need to go bare, squeeze in more seats in order to compete with the ME3. After all, it's about business. And the biggest market that we have are OFW who are price sensitive. At any day I would still gladly take PAL any time (except for some routes).

[Evodesire]

Another news came out that the LTG buyout is a "done deal". I heard also from some crew members that they are afraid of the LTG coming back in, and some are already seeking employment in foreign carriers.

[seven13]

Let's face it. Regardless if RSA, LTG or even MVP will take over PAL, still, a lot of Filipinos will seek employment with foreign airline UNLESS the salary will be tax-free plus a total overhaul of the salary package!

Majority of airlines surrounding PAL has better network because they are able to support it (geography, infrastructure, economic etc. etc. - probably except GA and VN). Even mainland air carriers have a vast network than PR.  

[romantic_guy08]

romantic_guy08 wrote

5J to launch 3x/weekly flight to DMM eff. Oct. 4

Not so convenient for connections on the MNL arrivals (except for CEB/DVO).

5J724 MNL2155 – 0240+1DMM 330 146
5J725 DMM0410 – 1835MNL 330 257

[RiverThames15]

http://mobile.businessweek.com/news/2014-09-08/san-miguel-said-to-sell-philippine-air-holding-for-1-billion

"San Miguel Corp. will sell back its holdings in Philippine Airlines Inc. to billionaire Lucio Tan, two years after the nation’s largest company invested in the carrier.

The two companies signed an agreement today, San Miguel President Ramon Ang said in a mobile-phone text message. The deal is valued at $1 billion, according to people familiar with the transaction, who asked not to be identified as the information isn’t public."

====

Comments peeps, is this true? Shall we soon see large scale regression at PAL?

[seven13]

I'll still wait for the official news as all contents being released now are rather limited. The best that we can do is just await for the official announcement and not expect anything.

[Solblanc]

The thing I don't understand the most is that, at the end of the day, LTG still needs a partner to put fresh funds in the airline. That was the entire point of the SMC exercise to begin with.

How will they be able to attract another partner now, especially when they've got a track record of being difficult with their last partner?

Also, has SMC grown weary of the airline business already? Would Ramon Ang consider acquiring a small airline, use their AOC, and create a full service airline from scratch?

[romantic_guy08]

seven13 wrote

I'll still wait for the official news as all contents being released now are rather limited. The best that we can do is just await for the official announcement and not expect anything.

PAL Holdings, San Miguel confirm agreement for Lucio Tan to buy back SMC's 49% stake in Philippine Airlines @InquirerBiz

[Evodesire]

My fear about the LTG stepping in once again is that PAL will not be the same aggressive and money making airline as it is with the RSA group.

[seven13]

Read in SSC the reason of RSA letting go of PR is because he is still interested in building the airport in Cyberbay/city. The government would't allow because of his involvement with PAL.

I think LTG (esp JJB) is smart enough to realize that all implementations made by RSA translated to earnings for the first half of the year + July. It would be silly of them to change what's in place and regress back.

[Arianespace]

RiverThames15 wrote

http://mobile.businessweek.com/news/2014-09-08/san-miguel-said-to-sell-philippine-air-holding-for-1-billion

"San Miguel Corp. will sell back its holdings in Philippine Airlines Inc. to billionaire Lucio Tan, two years after the nation’s largest company invested in the carrier.

The two companies signed an agreement today, San Miguel President Ramon Ang said in a mobile-phone text message. The deal is valued at $1 billion, according to people familiar with the transaction, who asked not to be identified as the information isn’t public."

The new offer from LT Group was accepted by SMC yesterday and its almost 3 times more than its initial offer. We will see the bank check possibly Friday.

^^

Solblanc wrote

The thing I don't understand the most is that, at the end of the day, LTG still needs a partner to put fresh funds in the airline. That was the entire point of the SMC exercise to begin with.

Exactly.

How will they be able to attract another partner now, especially when they've got a track record of being difficult with their last partner?

That is a good question

Also, has SMC grown weary of the airline business already? Would Ramon Ang consider acquiring a small airline, use their AOC, and create a full service airline from scratch?

Nope. It was purely business judgment from them. In fact, SMC earned a little premium of their two year investment stint with PAL. Investor wise, that is a good move.

As to acquiring a small airline, very much doubt it. As to acquiring a big one, probably.

^^

seven13 wrote

Read in SSC the reason of RSA letting go of PR is because he is still interested in building the airport in Cyberbay/city. The government would't allow because of his involvement with PAL.

I think LTG (esp JJB) is smart enough to realize that all implementations made by RSA translated to earnings for the first half of the year + July. It would be silly of them to change what's in place and regress back.

They cannot build an airport at Cyberbay with or without PAL. Its not even land in the first place. And nobody owns the water, particularly the sea other than the government.

They can however bid for Sangley Airport project.  

[Arianespace]

I did tell you about the bank financing the buyback. Its now in the open posted at PDI

The group of tycoon Lucio Tan on Monday signed a $1-billion deal to buy back the 49-percent stake in Philippine Airlines (PAL) from conglomerate San Miguel Corp., ending a two-year-old alliance and regaining management control of the now-profitable flag carrier.

SMC president Ramon S. Ang and Tan were seen Monday at the head office of Banco de Oro Unibank, which banking sources said was among those that agreed to provide financial muscle to the Tan group’s PAL buyback initiative. Ang later confirmed in a text message that he had indeed signed the deal with Tan and that payment would be made “within one week.”

The $1-billion estimated amount of the deal covers not only the payment for SMC’s 49-percent stake but the cash advances made by the conglomerate for the flag carrier’s refleeting program.

Inquirer sources said that to fund this buyback, the Tan group borrowed $850 million from a syndicate of banks, including the SM group’s BDO and China Banking Corp. as well as Philippine National Bank and Asia United Bank. The rest will be covered by the tycoon’s existing cash flow.

A banker involved in the transaction said the syndicate involved a number of banks but the bulk would be covered by two banks. Funding from the SM group’s banks was seen a key part of the transaction.

The financing deal obtained by the Tan group was only a bridge financing backed by shares in several Tan-owned companies, including PAL itself, as collateral. Over the long-term, the sources said the Tan group was expecting to repay the loan with the entry of another strategic investor and the cash flow of PAL.

It was earlier reported that Tan had changed his mind about ceding control of PAL for various reasons. For instance, Tan was not too keen on the generous early retirement option recently offered by the Ang-led management to PAL employees, which the tycoon felt would not only front-load expenses but also weed out long-time lieutenants in PAL. There were likewise issues raised on the aviation supply arrangement with SMC-controlled Petron Corp. and the leasing of a big number of aircraft. Another involved certain Tan family privileges that were allegedly lost since the SMC management took over.

SMC, which came in as a strategic partner in 2012, was able to bring PAL back to profitability starting in the second quarter of this year.

There have been volatile buyout discussions between the LT Group and SMC since last year. At first, the Tan group signified its interest to sell its 51 percent to SMC in August last year and the discussion reached the drafting of the share purchase agreement, which was sent to the Tan group on Sept. 30, 2013. By October last year, however, the LT group had sent a letter authorizing an external counsel with full authority to discuss the transaction and the group submitted a written offer to buy the 49-percent stake held by the SMC instead. The offer was accepted by Ang on Nov. 26, 2013, on condition that the LT Group would pay SMC all the advances made for the refleeting.

In April this year, the source said the LT Group offered to sell its 51 percent to RSA through investment bank UBS and a full agreement on the term sheet was made with the final draft submitted to the LT Group only last July 4, with the deal-signing being planned in the following week. Instead of receiving a signing date, however, the source said RSA was advised again by the LT Group that it would prefer to buy out SMC and requested for the details of the advances made by the conglomerate for the refleeting. This came immediately after the announcement of PAL’s cooperation agreement with Middle Eastern carrier Etihad.

Evodesire wrote

My fear about the LTG stepping in once again is that PAL will not be the same aggressive and money making airline as it is with the RSA group.

How do you like the SM group owning PAL?

[seven13]

RSA can lobby for his plan of an airport in cyberbay or might go with Sangley instead. He might have seen bigger profits in running an airport than running an airline. The current problem is that MNL is already running on more than what it is designed plus we all know that our government is "financially limited" and very much inefficient in operating an airport unlike private sectors.

If the airport pushes through, with the government's mandate, all airlines will be compel to move to the new airport; so if it's RSA that's going to fund it, it'll be a win-win situation for him. Bottom line is, he's a business man.


On another note, SM running an airline? I better start earning more money and be loyal to CX.