PAL invests in Cambodia Airlines
MANILA, Philippines (UPDATE as of Apr. 4) - Legacy carrier Philipine Airlines (PAL) has struck a deal with one of Cambodia's biggest tycoons to launch a new airline later this 2013.
Kith Meng, chairman of Royal Group -- a hotel, media and telecoms empire in Cambodia -- and PAL inked the deal late Tuesday, April 2, according to a statement. (Editors' note: Earlier reports said it was PAL's shareholder San Miguel Corp. that signed a deal with the Royal Group. In a disclosure to the Philippine Stock Exchange on April 4, the diversified conglomerate clarified that it was PAL that entered into an agreement with the Cambodian group)
The Cambodian businessman will retain a 51% share of the newly-minted carrier -- Cambodia Airlines. PAL will own the remaining 49%.
Cambodia Airlines is now the newest addition to San Miguel's portfolio of aviation-related assets.
In April 2012, San Miguel sealed a 49% controlling stake in Asia's oldest carrier, PAL, where it partnered with tycoon Lucio Tan.
In June 2012, San Miguel président Ramon Ang had hinted that they were considering a deal with "regional airline."
In November 2012, San Miguel said it is in talks for a possible investment deal with flag carrier of Cayman Islands in the Carribean.
San Miguel is also beefing up its portfolio of airports. Its subsidiary, Trans Aire Development Holdings Corp., has won a 25-year contract to rehabilitate and operate the Caticlan airport, the jump off point to tourists' favorite, Boracay island.
San Miguel and the Lucio Tan are also jointly participating in the bid for the P17.5 billion expansion project of Mactan-Cebu international airport, the country's second busiest gateway.
San Miguel has been aggressively branching out into new ventures like oil refining, aviation, toll road operations, and power generation to beef up its core businesses that includes a brewery that is now in its 123rd year.
Consolidated net profit of San Miguel surged 35% to P38.68 billion in 2012 on strong performance of core and new businesses.
Cambodia's 2nd airline
The newly announced airline, Cambodia's second, will "contribute to Cambodia's economic growth by creating employment opportunities, bringing investors and building a strong aviation industry," Kith Meng said in the statement.
Royal Group's chief financial officer Mark Hanna told AFP that domestic flights could begin as early as June 2013 with international routes expected to begin in October.
"There is a huge growth in tourism and that has a direct impact on aviation," Hanna said, predicting the Cambodian aviation industry will surge over coming years.
Cambodia launched its first national airline, Cambodia Angkor Air, in 2009, after a previous effort folded in 2001.
More than 20 foreign airlines, including Japan Airlines and Qatar Airways, currently operate flights to Cambodia. - with reports from Lala Rimando/Rappler.com and Agence France-Presse
Airplane image via Shutterstock