‘Now is best time for PAL to sell’

February 29, 2024 | 12:00am

MANILA, Philippines — This is the best time for flag carrier Philippine Airlines (PAL) to sell a portion of the company, as investors are attracted to buy into it with travel and tourism picking up momentum, according to analysts.

In a text message to The STAR, Philstocks Financial Inc. assistant research manager Claire Alviar said PAL could use the resurgence of the aviation industry to raise fresh funds for future projects.

“Injecting fresh funds into the company would be beneficial to meet the growing demands in air travel and create more earnings opportunities for PAL,” Alviar said.

Regina Capital Development Corp. head of sales Luis Limlingan said PAL could capitalize on the global recovery of travel and tourism in its plan to pick up a new investor.

Limlingan noted that multiple airlines are giving out bonuses, hinting that aviation is becoming a profitable business again.

“I know the travel industry is strong (given that) Singapore Airlines paid eight months in bonus to their staff last year. If PAL is looking to expand, it might still be a good time,” Limlingan said.

Rizal Commercial Banking Corp. chief economist Michael Ricafort expects PAL to gain market interest if it decides to proceed with its sale of shares, saying the economy in general is growing, and this benefits companies planning to sell.

“Economic, industry and market conditions have improved recently. So are the valuations and the selling prices,” Ricafort said.

An earlier report by The STAR indicated that taipan Lucio Tan is reviving a longstanding plan to turn over a significant stake in the flag carrier to another investor.

The Tan family is reportedly open to selling as much as 25 percent of the airline, acknowledging the possibility that investors will be attracted to buying into PAL for its financial potential.

PAL’s parent PAL Holdings Inc. turned up respectable numbers in recent quarters.

Based on latest figures, PAL Holdings doubled its profit to P15.16 billion in the nine months to September 2023, as revenue jumped by 38 percent to P134.58 billion.

The flag carrier generated P120.08 billion from passenger operations, flying 11 million guests during the period.

PAL placed a P177-billion order last year for nine Airbus A350-1000, as it prepares for a return to Europe by 2025, signaling the confidence of the airline in the recovery of air travel.

Trustmark Holdings Corp., an LT Group company, owns 76.9 percent of PAL Holdings, while the rest is divided into the following shareholders: public (10.3 percent), ANA Holdings Inc. (9.5 percent) and others (3.3 percent).

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