What Would have Been?

Neil Mills, RSA's man behind PAL
5 November 2014

by Paolo Montecillo

With the Lucio Tan group now back in control, real problems seem to be mounting at the nation’s flag carrier Philippine Airlines (PAL).

For starters, Biz Buzz sources say Neil Mills, one of the foreign consultants brought in by the San Miguel group very recently, had handed in his resignation.

Mills, who played an instrumental role in steering the airline back to profitability, was named chief executive adviser at PAL by Ramon S. Ang himself in September 2013.

Prior to joining PAL, Mills was CEO of India’s SpiceJet Airlines, chief financial officer of the UAE’s FlyDubai airline and procurement director at England-based EasyJet.

From what we hear, Mills may just be the first of many PAL executives ready to disembark.

More alarming is that even executives that were with PAL before San Miguel came in are now updating their CVs to show to potential employers.

The Tan family’s main issue with these people, our sources claim, is to whom their loyalties now lie—San Miguel’s or Kapitan’s?

Wasted chances

Speaking of PAL, is anyone else wondering what the airline might have become had it stayed as part of the San Miguel group?

Biz Buzz sources say the airline planned to put up a second hub at Tokyo’s Haneda International Airport—a major aviation hub in the region. This would have solved the problem of having “too many planes” that Manila’s Ninoy Aquino International Airport (Naia) has no space for.

The Haneda hub would have served as a transfer point for passengers flying from Manila headed to Europe and cities in the United States.

Another benefit of having a Japanese hub would have been getting part of the Japanese passenger traffic, making operations more profitable.

It makes sense, really, considering that PAL already flies directly to Haneda, the airport in the middle of Tokyo, and much more convenient than Narita.

Now what we hear is that those plans are dead. So what does PAL plan to do with all those planes it’s getting delivered (which we’re told the Tan group actually approved of when plans were brought up during board meetings)?

An easy conclusion to make is to sell PAL to one of the Middle Eastern carriers. After all, these gulf airlines are all itching to have a presence in the fast-growing Asia-Pacific region.

These Middle Eastern carriers can then absorb the new planes that PAL doesn’t want. According to another Biz Buzz source, Lucio Tan’s son Michael, with the help of Washington Sycip, is already brokering a deal with one of these Middle Eastern players, which may announce a planned investment in PAL before the end of the year.