Monday, 16 August 2010 00:00
THE MANILA TIMES
PHILIPPINE Airlines (PAL) has put on hold negotiations with several fund managers and Asian counterparts for possible investment in the flag carrier because of its labor woes. ”We have not met any of the prospective investors in the last two months because of the labor problems,” Jaime Bautista, PAL president told reporters on Saturday.
Bautista said investors advised them to fix the labor problem first before asking for a capital infusion.
The Flight Attendants and Stewards Association of the Philippines (FASAP) had warned of a strike after PAL management’s proposal failed to break the labor impasse.
PAL offered a “one-time” P80-million package to its 1,600 flight attendants and stewards to settle their dispute.
The labor strife involving flight attendants comes at a time when PAL has yet to resolve a separate issue involving the premature resignation of 26 pilots who have opted for jobs in foreign carriers.
Bautista said PAL’s possible partners were losing their appetite “the more they learned about the labor problems.”
He had said that PAL Holdings Inc. may issue new shares to accommodate the new investors.
PAL Holdings owns 84.7 percent of the flag carrier.
In 1998, Hong Kong-based Cathay Pacific Airways Ltd. had contemplated on investing in PAL but the plan failed to materialize because of “major differences.”
The Philippine carrier sought rehabilitation in 1998 after racking up $2.12 billion in debts.
Jose Gabriel Olives, PAL chief financial officer (CFO) said that the 69-year-old airline may post a “small profit” in the first quarter ending June this year.
The airline recorded a net income of $35.5 million from April to June last year, a 21 percent decline from the same period in 2008.
Olives attributed the profit to the improved domestic and international passenger traffic.
For the full year, Olives said PAL is likely to enjoy a “modest profit.”
PAL recorded a net loss of $14.3 million for its fiscal year ending March 2010, lower than the $297.8-million it incurred during the previous fiscal year.
The company’s revenues amounted to $1.36 billion from April 2009 to March 2010 compared with $1.6 billion from April 2008 to March 2009.
DARWIN G. AMOJELAR
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