Iberian A340 Returns Home For A Visit

 As PR1 Arrives Spain

14 September 2014

RP-C3435 (sn302,ex EC-HDQ) Arrives at 7:10AM in Madrid's Torrejon Airport bringing the President of the Republic of the Philippines on the first leg of a week-long Official State visit to mainland Europe. It will then fly to Belgium and then to Paris and Berlin later in the week. 

Aquino’s visit to France will be the first for a Philippine head of state since 1994. The President chooses Spain as his first itinerary to Europe considering the shared history and cultural heritage between the two countries.The Philippines is also the only country that receives Official Development Assistance from Spain.

5J To Take Unused PR Slots to OZ

13 September 2014

Low-cost carrier Cebu Pacific (CEB) declared today that they will take the unused slots of Philippine Airlines (PAL) to Australia after it failed to provide additional services to four major airports there. 

PAL recently withdrew flight applications to Perth and Brisbane airports originally planned for October and lately moved to November until it was eventually stricken off from Airport Coordination Australia database.

Cebu Pacific said PAL has been blocking them from using some of its unused slots which prevent the airline from providing daily services to Sydney.

The airline operates the densest A330 in the world from Manila initially operating four times a week that will increase to five flights a week beginning December 10.

Gary Kingshott, Chief Executive Adviser of Cebu Pacific said they will take that option before requesting for expansion of Air Services with Australia that would allow them to fly double daily flights to points in Sydney and Melbourne. 

“We believe there is great potential for this route. It’s only been served by two legacy carriers, the fares have been very high, more than $1000.’’ Mr Kingshott said. 

Qantas and Philippine Airlines served Sydney-Manila route. Kingshott added that with their new service CEB offers tickets 35 per cent cheaper than its rivals with year-round all-inclusive fares starting at $335.

The Air Services Agreement with Australia provides 6000 seats a week from Manila covering the airports in Sydney, Melbourne, Perth and Brisbane. Flights to Darwin and Between Cebu, Davao and Clark remains unrestricted. Of the 6000 seats available PAL held 4000 of which 2058 are currently utilized while CEB was awarded 2000 seats.

The airline operates the densest A330 in the world at 440 seats from Manila initially operating four times a week that will increase to five flights a week beginning December 10. 

Kingshott said that with the five flights they have in December they are constrain to carry only 400 passengers per flight to Sydney, 40 less than its aircraft passenger capacity, and with the unused PAL entitlements getting 1000 of that could make their flight go daily.

Australia is serviced by another less dense variant of its A330 holding 436 passengers that also flies to Kuwait and Saudi Arabia.

PAL Upgrades Vladivostok, Flies Khabarovsk in October

Opens Moscow Charters in January

12 September 2014

Philippine Airlines is upgrading charter services to the Russian far east by flying Airbus A321-200 jets from the existing A320 service to Vladivostok beginning October this year. The airline will also introduce new charter service to  Khabarovsk from Kalibo using A320 aircraft. Charter services for  Vladivostok remains at one flight per 10 days while new services to Khabarovsk will be flown every 14th day. Meanwhile, the flag carrier is also introducing regular charter flights From Manila to Moscow in January next year once a week using a mono-class Airbus A330-300 aircraft.

PAL Defers Delivery of A330's

11 September 2014

Philippine Airlines (PAL) has deferred delivery of its Airbus A330-300 aircraft order from Airbus S.A.

The affected frame (1553, RP-C8764) was scheduled for delivery on August 28 when the airline announced there will be delay to its acceptance due to change in corporate leadership.

No further information is made available as to the status of other aircraft orders. There are four remaining A330 frames yet to be delivered to the airline after it cancelled the other five in February.

Earlier this week San Miguel Corporation (SMC) agreed to sell back the airline to its previous owner, the Lucio Tan group for more than US $1 billion.

SMC owns 49 per cent of PAL Holdings which in turn controls about 90 per cent of Philippine Airlines and 100 per cent of its low cost subsidiary Air Philippines. 

PAL Cancels Planned B757 Service To Australia

11 September 2014

Philippine Airlines has cancelled plan Australian expansion to Perth and Brisbane slated to start operations in November after the airline cancelled the lease contract for five B757 aircraft meant for the Australian market. The cancellation was made two days after the Lucio Tan Group bought back the flag carrier from San Miguel Corporation. Existing flights to Darwin and Brisbane remains unaffected and will be upgraded to A321 service starting December 8, 2014. Meanwhile, Melbourne expansion plans is expected to be announce soon.

SM Rules Out Running PAL

11 September 2014

By Jenniffer B. Austria

The SM group emerged as the biggest financier to billionaire Lucio Tan’s move to regain control of flag carrier Philippine Airlines, but a top executive said the conglomerate has no interest in venturing into the airline business.

“They have been long- time client of ours. It’s about supporting a valued client,” SM Investments Corp. vice chairman Tessie Sy-Coson said at the sidelines of Asean Business Awards Tuesday afternoon.

Sy was responding to queries on why BDO Unibank Inc., the conglomerate’s banking unit, decided to help Tan buy back a 49-percent stake in PAL owned by San Miguel Corp.

Bloomberg on Tuesday reported that Tan, the Philippines’ second-richest man, pledged shares in his companies to secure a loan from four banks to fund the acquisition of San Miguel Corp.’s stake in PAL.

Tan pledged shares in LT Group Inc., Philippine National Bank and real estate assets to secure a $750-million loan from BDO Unibank Inc., China Banking Corp., Philippine National Bank and Asia United Bank.

Sy, who is also the chairman of BDO, did not disclose the exact amount of loan which BDO and Chinabank provided to the Tan group and the value of assets Tan pledged in exchange for the loan.

Sy, however, said the value of assets collateralized by Tan represented the same amount of loan provided by the group.  She said the company was not interested in sitting in the board of PAL, despite providing the biggest loan to Tan group.

Share price of BDO on Wednesday closed at P94.50, down 0.3 percent while stock price of Chinabank gained 0.2 percent to close at P55.10 apiece.

San Miguel Corp. agreed to sell back its holdings in PAL to Tan, two years after the nation’s largest company took management control and led the carrier’s return to Europe.

San Miguel and Tan’s group signed an agreement Monday, San Miguel president Ramon Ang said in a text message.  The deal is valued at $1 billion and requires Tan to meet certain conditions within a week.

However, Sy did not disclose the loan amount extended by BDO and Chinabank to the Tan group, as well as the value of assets Tan pledged in exchange for the loan.

Sy also said they were not interested in getting a seat in the PAL board.

From SMC to SM?

Lucio Tan Group Buys Out SMC

9 September 2014

The Lucio Tan Group has signed on Monday a $1.2 billion deal to buy back in cash the 49-percent stake in Philippine Airlines (PAL) from conglomerate San Miguel Corporation. Payment is expected within this week.

The buy back deal is financed mainly by Banco de Oro (BDO) and China Banking Corporation (CBC), the banking arm of the Shoe Mart Group of companies (SM Group) belonging to family patriarch Henry Sy. 

The syndicated loan amounts to $850 million secured from BDO, China Banking, Philippine National Bank (PNB) and Asia United Bank (AUB). The rest of the buy back money amounting to $400 million will come from the Lucio Tan Group of Companies.

The buy back deal covers the $500 million capital infusion at PAL in exchange for SMC’s 49-percent stake in PAL Holdings as well as cash advances to Airbus S.A. to the tune of $700 million made by San Miguel for the flag carrier’s A330, and A321 aircraft orders for its refleeting program.