Business World
April 16, 2012
THE CIVIL AERONAUTICS Board (CAB) has thrown its support behind San Miguel Corp.’s buy-in into flag carrier Philippine Airlines, Inc. (PAL), saying such investments to grow the industry were encouraged.
“I don’t see any regulatory issues here but there are administrative requirements that they have to submit,” CAB Executive Director Carmelo A. Arcilla said in a telephone interview last week.
Requirements, he said, include documents on changes in the corporate structure.
“But in terms of public policy, the government encourages investments in the aviation industry. Seven years ago, we only had two international airlines, now we have six.”
PAL President Jaime B. Bautista had earlier said the planned buy-in“will help the flag carrier in its refleeting program and make the airline more viable and competitive.”
San Miguel and PAL Holdings, Inc., in separate statements had said a deal has been signed for the Ang-led conglomerate to acquire a minority stake in the airline stakeholder for $500 million.
Specifically, San Miguel Investment Holdings, Inc., the conglomerate’s investment vehicle, said that on April 3, it acquired a minority stake in Trustmark Holdings Corp. and Zuma Holdings and Management Corp., which are majority owned by PAL Chairman Lucio C. Tan.
Trustmark Holdings and Zuma Holdings and Management are the holding firms of PAL and budget carrier Airphil, respectively.
The entrance of San Miguel in PAL, in fact, is a positive development, according to Mr. Arcilla.
“It benefits of the riding public to have more options,” Mr. Arcilla said.
“I don’t see any competitive issues here,” he said. “In fact, this is a development that will help the business community.”
Mr. Arcilla cited AirAsia Bhd., the Asia’s biggest low-cost carrier, which, together with Filipino businessmen, set up a budget carrier in 2010 called AirAsia Philippines.
“An example is when we allowed AirAsia to invest in the country. This means that the business community is confident in the aviation industry,” Mr. Arcilla said.
The airline, which started domestic operations last month, is 40% owned by the Malaysian carrier, while 60% are equally owned by Antonio C. Cojuanco, Michael B. Romero, and Marriane B. Hontiveros. -- Cliff Harvey C. Venzon
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