Flag carrier OKs equity restructuring
THE NUMEROUS labor issues hounding Lucio Tan-led Philippine Airlines (PAL) have scared away potential investors from bailing out the bleeding flag carrier.
According to Jaime J. Bautista, PAL’s president and chief operating officer, potential investors have asked the airline to resolve its several labor issues before discussions about infusing fresh funds into the airline resume.
“Investors’ appetite has decreased due to the company’s labor problems,” Bautista said in a briefing on the sidelines of the company’s stockholders’ meeting on Thursday.
He said that the company has not been in contact with its potential investors for the past few months.
PAL on Thursday approved the restructuring of its equity by reducing the par value of its shares to 20 centavos from 80 centavos, which will make it easier for outside investors to get a bigger voting block in PAL.
Potential investors in PAL were reported to be Middle Eastern groups and companies in Asia Pacific that are also involved in airline operations.
“We want new money to come in because if [PAL chair Lucio Tan] simply sells his shares, then the money will go to him and not to the company,” Bautista said.
PAL has been searching for investors since last year, after suffering over $300 million in losses due to high oil prices and low demand.
“There are investors that want to be passive but we are also willing to get investors that wish to have a more active role,” Bautista said.
Among PAL’s many labor issues is the opposition to the company’s plans to outsource non-core services like in-flight catering, airport services and call centers, retrenching over 2,600 workers in the process.
PAL’s flight attendants are also protesting a policy that requires them to retire at the age of 40. All other PAL employees are allowed to work until they are 65.
Bautista said these labor issues have also affected bookings, with many passengers growing wary of a potential labor strike.
Bautista denied that the company approached the groups of San Miguel Corp. president Ramon S. Ang and Philippine Long Distance Telephone Co. chair Manuel V. Pangilinan, inviting them to invest in PAL. –Paolo Montecillo, Philippine Daily Inquirer
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