PAL in for a change?

Turning Philippine Airlines around

The colorful history of Philippine Airlines took another major turn just before the Lenten break. San Miguel Corp., led by the aggressive 58-year-old businessman Ramon Ang, bought a 40-per cent stake in, and obtained management control of, the airline. PAL, Asia's first airline, was a source of national pride in the 1960s, until the global crisis in the 1970s and government mismanagement clipped its wings. Hopes that it would again fly the skies profitably were revived when it was sold to taipan Lucio Tan in the 1990s. But a series of economic crises and protracted disputes with labor unions shackled PAL once again. Will Ang succeed in turning the ailing airline around this time? Gauging from San Miguel's acquisition moves in the past few years, Ang has expertise in taking advantage of synergies among the companies under his supervision. And PAL seems a perfect fit to the group. San Miguel owns Petron Corp., which can help the airline with its fuel requirements. (Aviation fuel makes up half of PAL's operating costs.) PAL can also benefit from Petron's network of fuel storage facilities like depots and logistics systems nationwide. San Miguel has ventured into infrastructure and now owns the Caticlan airport, the gateway to the world-famous Boracay Island. T here are plans to expand the airport so it can accommodate international flights and boost tourist traffic. As a San-Miguel-owned firm, PAL will benefit tremendously from this expansion, as it likewise will from San Miguel's participation in the Aquino administration's Public-Private Partnership program to redevelop the Ninoy Aquino International Airport in Pasay City and the Clark International Airport north of Manila. With the San Miguel group having about 17,000 employees, it can only be expected that they, as well as its executives, will patronize PAL as they do other San Miguel products like beer. Add to this potential market the vast clientele of San Miguel who just might be enticed to use the airline as well. (This article first appeared on Tuesday, Apr 17, 2012 in the Philippine Daily Inquirer/Asia News Network)