DAVAO CITY — Flag carrier Philippine Airlines Inc. (PAL) is finalizing talks with a group of investors that would also help develop markets, according to its top executive. This as the company continues to bleed in some of its domestic and international routes.
PAL President and Chief Operating Officer Jaime J. Bautista, at the sidelines of a press briefing here on Thursday, said they are currently working on the details of the agreement.
“They are strategic investors; they can be part of the board; they can help us develop certain markets,” Mr. Bautista told reporters, but he declined to name the group given a confidentiality agreement.
He said he is hoping that the agreement with the investors will be signed this year.
PAL has been in talks with potential investors over the last few years.
Mr. Bautista said that PAL is aiming to return to profitability this year after being in the red last year. Earlier this week, the company reported a P7.3 billion net loss in 2017, coming from a P4.13 billion profit in 2016, due to higher fuel prices and ballooning aircraft and passenger expenses.
Mr. Bautista said they are now reconfiguring routes to boost income.
Earlier this week, the airline announced that it would stop flying to Kuwait because, as Mr. Bautista explained, “The result was not that good.”
The plan to remove some routes, he said, would allow the company to assign some of its aircraft to more stable routes, like using an Airbus A330s for trips to New Zealand.
Mr. Bautista said domestic routes are generally profitable, with the Cebu hub bringing in most of the income. Still, some of the domestic services are considered missionary routes and are not expected to immediately make money, he said, “because these are developmental routes” and it takes at least a year or two for these to become profitable. “As we grow the market (for the developmental routes), it should allow us to offer rates that will make us profitable,” he said.
Mr. Bautista also said the airline is evaluating the possibility of launching international services to Japan, South Korea, China, Taiwan, and Palau from Davao. — Carmelito Q. Francisco