JG Summit Not Closing Doors On Philippine Airlines Buy-In


MANILA – JG Summit Holdings Inc. is not closing its doors on the prospect of investing in Philippine Airlines (PAL), a senior company official revealed.

Bach Johann M. Sebastian, the firm’s senior vice president and chief strategist noted, however, that his company has yet to review if the prospective foray into a full-service airline would benefit the firm.

“We don’t have a business case [in] owning a full-service airline because [what we have now is a] low-cost airline. [But] we’re always looking at all opportunities,” he said in a chance interview.

Sebastian noted that there might be regulatory considerations for such a deal, as “the government might view that as too much concentration.”

He explained that [deals of this kind] “will have to be approved by Congress because we [need] a Congressional franchise [to operate an airline business] and we have to live up [to] our commitments [to the franchise]. The Civil Aeronautics Board will also have to [look into the matter] because they are sort of the fair trade commission of the airline industry. The CAAP [Civil Aviation Authority of the Philippines] will also have to weigh in on [any possible deal].”

Low-cost carrier Cebu Pacific is the airline unit of the Gokongwei family-controlled conglomerate.

The JG Summit executive, however, clarified that “we haven’t been approached by anyone. We haven’t signed any confidentiality agreement. We have always been asked but it’s not yet a question that we have to answer.”

PAL President Ramon S. Ang earlier expressed his confidence that the airline would be back in the black by yearend, after three consecutive years of losses.

Source: Lorenz S. Marasigan, BusinessMirror


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