Lufthansa to buy PAL assets

Lufthansa to buy PAL assets

MANILA (Reuters): Debt-ridden Philippine Airlines has signed a
letter of intent with a unit of Germany's Lufthansa to sell its
maintenance and engineering operations, company president Avelino
Zapanta said on Tuesday.

Zapanta told Reuters the letter was signed last weekend, but
talks were still continuing on details.

The two sides were also discussing a possible management
contract under which a Lufthansa unit would take over day-to-day
operations of the airline, he said.

"We are still discussing management and there is no letter of
intent on that yet," he said.

PAL, which has some $2.2 billion in debt and is in the midst
of a rehabilitation program, is currently managed by a team of
advisers formerly employed by Cathay Pacific Airways and its
parent Swire Pacific.

Zapanta said the team was still under contract to PAL but that
could change.