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Philippine Airlines Plans Daily Flights to Five European Cities

Philippine Airlines (PAL) Inc., controlled by billionaire Lucio Tan, plans to fly daily to five cities in Europe, with flights to resume this year after the European Union took the country off its safety blacklist.

The flag carrier will use its six Boeing Co. 777 aircraft for direct flights to London, Frankfurt, Paris, Amsterdam and Rome, President Ramon Ang said in an interview in Manila.

The EU on July 10 said it’s lifting a three-year-old flight ban on Philippine Airlines, citing its ability to ensure compliance with safety regulations and oversight improvements by the Southeast Asian nation’s aviation authorities. “The Philippines may attract about 600,000 European visitors, 50 percent more than last year, helping the nation meet its target” of 5.5 million tourists this year, ABS-CBN News reported on July 11, citing Tourism Secretary Ramon Jimenez.

“After the EU lifting, we need to make arrangements with the airports, which may take one to two months,” Ang said yesterday. “We will be flying to London by October at the latest. By November, we should be flying to all.”

PAL Holdings, which yesterday traded for the first time this year after raising its public float to a level required by the Philippine Stock Exchange, rose 42 percent to 6.95 pesos.

San Miguel Corp. (SMC), the nation’s biggest company and of which Ang is also president, in April last year acquired 49 percent of Philippine Airlines from businessman Lucio Tan for $500 million as part of its expansion into industries that include oil, power and infrastructure.

Labor Union

“The flights to Europe might be able to return it to profit,” Harry Liu, president of Summit Securities in Manila, said by phone. “A Philippine Airlines under San Miguel might be able to deal with its labor union in ways that Tan wasn’t able to.”

Philippine Airlines, majority owned by Tan through PAL Holdings Inc., was in talks for 35 wide-body Airbus or Boeing jets after signing a purchase agreement for 10 A330s, Ang said Oct. 20.

San Miguel on July 8 said it has held talks with ANA Holdings Inc. about investing in the flag carrier, without elaborating.

There is a “very good understanding” with a potential investor, Ang said yesterday, declining to provide further details or identify the suitor..

Ang, a flying enthusiast, said he will probably sell all but one of the aircraft he owns. “Why would I need them? We have to patronize PAL.”

To contact the reporters on this story: Frank Longid in Hong Kong at flongid@bloomberg.net; Cecilia Yap in Manila at cyap19@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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