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PAL gets pally with Etihad as Tan moves for control

August 6, 2014 Aviation, Headline News No Comments Email Email

egtmedia59Chinese Filipino businessman Lucio Tan expects to wrest back full control of Philippines flag carrier Philippine Airlines, possibly this month.

Tan, whose interests run to banking, airline, liquor, tobacco and real estate, wants Etihad Airways as a partner once he regains control of PAL, according to a report in the Philippine Star.

A source told the paper negotiations for the buyback of the 49% interest of diversified conglomerate San Miguel Corp (SMC) was expected to be completed in the next few weeks, paving the way for the return of full ownership of PAL to the Tan Group on 27 August 2014.

The source said talks between the Tan Group and SMC are focusing the value of the buyout and terms of payment.

SMC president and chief operating officer Ramon S. Ang confirmed that the Tan Group had made a formal offer to buy back the conglomerate’s stake in PAL, the paper reported.

The Tan Group is reportedly raising close to USD 1 billion to buy back the 51% of SMC “and to pay the advances made by the diversified conglomerate to PAL for the purchase of brand new aircraft”.

SMC has had interests in PAL through intermediaries since April 2012. PAL’s massive fleet renewal program aims at acquiring 100 new aircraft. PAL has ordered 65 Airbus planes so far, worth USD 9.5 billion.

Ang has vowed to bring PAL back to profitability.

In April, both PAL and Etihad Airways entered into a strategic partnership covering codeshare flights, loyalty programs, airport lounges, joint sales and marketing programs, a Philippines domestic air pass, cargo, and the coordination of airport operations to provide a better guest experience at their Abu Dhabi and Manila hubs.

Written by : William Sykes

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