PAL to complete investment in Cambodia Air in July
PAL Holdings Inc., operator of flag carrier Philippine Airlines Inc., said Monday it expects to complete a $10-million investment in Cambodia Air by July 15 this year.
PAL teamed up with Royal Group of Cambodia in April to establish its first international airline venture known as Cambodia Airlines.
PAL, under the agreement, will own a 49-percent stake in Cambodia Airlines, while RGC headed by chairman Neak Oknha Kith Meng will hold 51 percent.
Inter Logistics (Cambodia) Co. Ltd. owns 100 percent of Cambodia Air, while PAL is a joint venture between San Miguel Corp. and tycoon Lucio Tan.
PAL Holdings said the initial investment in Cambodia Air would amount to $10 million for the 49-percent interest in the company, with the 10 percent down payment to be paid on July 15 and the balance upon call of the board of directors of Cambodia Air.
PAL will own 961 shares while ILC will hold 1,000 shares, after the closing of the transaction.
Cambodia Air will initially fly to regional destinations as well as domestic routes in Cambodia. The deal will give PAL revenues of $300 million to $400 million annually.
PAL will also deploy 16 to 22 aircraft worth $1.5 billion to equip the fleet of Cambodia Airlines. Of the 22 aircraft, 10 would be delivered in the first year while the rest would be deployed in the second year, PAL said.
PAL is undergoing a major refleeting program involving 100 aircraft to boost profitability. The refleeting program consists of 44 A321 and 20 A330, which will be delivered over the next three years.
Ang said at least eight Airbus A333s and eight A321s would be delivered this year, and another 18 aircraft next year.
He said with the new routes, the completion of the refleeting program and reassignment of aircraft and routes, PAL “is going to be very, very good in the near future.”
“We are starting to get forward bookings. We have a huge demand on our promos. When PAL’s brand new aircraft starts to arrive, coupled with other improvements, you will see the company’s complete turnaround,” he said.
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