PAL backs spin-offs, seeks open skies limit<\/p>\n
MANILA (Reuters): With its equity problems out of the way,
\nPhilippine Airlines (PAL) is getting down to business -- pushing
\nfor a revision of the country's open skies policy and the sell-
\noff of non-core businesses, officials said on Friday.<\/p>\n
PAL officials said the government has promised to consider
\nrestricting the number of foreign airline flights servicing the
\nPhilippines, which have posed stiff competition for the
\nfinancially ailing flag carrier.<\/p>\n
\"The government has already expressed the assistance they
\nwould give Philippine Airlines in that regard,\" PAL president
\nAvelino Zapanta said at a news conference.<\/p>\n
PAL, which has US$2.2 billion in debt, would have been
\nliquidated if $200 million in fresh equity had not been
\nforthcoming by the end of Friday.<\/p>\n
But chairman Lucio Tan deposited the money in PAL's bank
\naccounts only hours before a deadline expired.<\/p>\n
Zapanta said the government has begun to tighten up the
\nissuance of permits to other airlines and added that the airline
\nwas talking with Lufthansa on a possible consultancy and about
\nthe spin-off of some non-core businesses.<\/p>\n
\"We are in discussion with Lufthansa on various subject
\nmatters, particularly related to our spin off of maintenance and
\nengineering and some other areas of the airline's operations,\" he
\nsaid.<\/p>\n
Other airline officials said no management changes were
\nenvisaged, confirming that Tan would remain as chief executive
\nofficer and that the team advising PAL on its rehabilitation, led
\nby former Cathay Pacific executive Peter Foster, would also keep
\ntheir posts.<\/p>\n
The spinoff of maintenance and engineering businesses would
\nmean the retrenchment of about 1,600 people, but Zapanta added he
\nexpected no widespread job losses within the airline.<\/p>\n
He said the airline employee unions have given their
\ncommitment to 10 years of labor peace with their acceptance of
\nnew shares offered by Tan.<\/p>\n
Tan put in $100 million of the required equity himself and
\nprocured the rest from friends and associates.<\/p>\n
The Securities and Exchange Commission (SEC), overseeing the
\nrehabilitation of the airline, said the immediate next step would
\nbe to change the interim receivership committee into a permanent
\nreceiver, which would be done on Monday.<\/p>\n
\"The commission will be issuing an order creating a permanent
\nrehabilitation receiver whose task it will be to monitor and
\nsupervise very strictly the implementation of the plan,\" SEC
\nchairman Perfecto Yasay said.<\/p>\n
PAL, which reported 8.08 billion pesos ($212.63 million) in
\nlosses in the 1997-98 fiscal year (April-March) and over 10
\nbillion pesos in losses in the nine months to December 1998,
\nprojected in the plan that it would return to profit in the
\n1999\/2000 year itself.<\/p>\n
A major part of the plan included the restructuring of its
\ndebt, the reduction of aircraft and routes, and the sale of non-
\ncore businesses including maintenance facilities.<\/p>",
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