PAL talks fail on two fronts

PAL talks fail on two fronts

MANILA (Reuters): The future of Philippine Airlines Inc. was
in grave doubt on Wednesday after news that talks had broken down
with two potential foreign investors, Cathay Pacific Airways and
Northwest Airlines Corp.

One analyst said the twin failures of the talks meant the
financially ravaged airline, Asia's oldest carrier, could well
disappear from the skies.

Beset by debt and labor problems, it closed down briefly in
September before returning to the air some weeks later.

Philippine President Joseph Estrada, who has personally
campaigned to save the airline but ruled out taking recourse to
public funds, said the talks with Northwest had broken down.

"I think the negotiations with Northwest fizzled (out)...But
I'm not giving up on Cathay," he told reporters late on Tuesday.
"I think we can still convince them to continue the
negotiations."

But Cathay said on Wednesday it was withdrawing from the talks
with PAL because of irreconcilable differences.