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.