TELCO executive Manuel V. Pangilinan acknowledged on Thursday he had wanted to help beleaguered flag carrier Philippine Airlines (PAL) but that plans have changed, especially now, because of his group’s new relationship with the Gokongwei family that also owns an airline directly competing with PAL.
PLDT had just closed a deal to buy a majority stake in Digitel, the listed phone firm of the Gokongwei group, which holds interests in telecoms, airline, financial services, petrochemicals, power and hog farming.
“PAL does need a bit of help to make it the flag carrier as it’s called. We have a duty to look at it and see if it’s something worth doing. If, indeed, we do it, we would have someone to manage the airline. So it’s either a domestic partner or foreign partner and the only domestic partner is Cebu Pacific,” Pangilinan said.
But then, he added: “It’s not comfortable. The problem with investing in PAL—if we have found a formidable formula that combines PAL and Cebu Pacific—is that it’s going to be a sequel to the Digitel transaction. So, there are formidable legal, regulatory and market-perception issues with respect to potential investment in PAL.”
Besides, Pangilinan said, there are risks of operating an airline company. “It’s a business where there are critical risks involved. For example, we have to worry about fuel being proportionate to operating expenses. That’s something beyond our control. Weather is also another concern, as well as recession abroad,” he said.
With these in mind, Pangilinan categorically said his group is no longer looking into investing PAL nor are there ongoing talks with people representing PAL and Cebu Pacific.
“We have actually thought about it but no. There is nothing going on. There are other things to worry about like Digitel,” he said.
The PLDT-Digitel transaction allowed Digitel President James Go to occupy one board seat in PLDT, while five PLDT officials, including Pangilinan, were elected to the Digitel board of directors.
Pangilinan is now the chairman of Digitel and its cellular unit Digitel Mobile Philippines Inc. (DMPI). Orland Vea, concurrent Smart chief wireless adviser, was elected as Digitel and DMPI president. Other PLDT officials who were elected to the Digitel board include PLDT President Napoleon Nazareno, TV5 President Ray Espinosa and PLDT Treasurer Anabelle Chua.
PLDT had earlier created a new aviation firm called Pacific Global One Aviation Inc. Nazareno said this was put up to rationalize the PLDT group’s aviation requirements, likening the newly created firm to Ayala Corp.’s Ayala Aviation Corp.
Pacific Global One Aviation Inc. currently has three helicopters and one fixed-wing aircraft.
