Philippine Airlines (PAL) has not shelved its multi-million-dollar joint venture with local conglomerate Royal Group to create the country’s second national airline, Cambodia Air, according to a disclosure filed Wednesday to the Philippine Stock Exchange.
“We wish to clarify that on-going preparations for the completion of the contemplated joint venture agreement between Philippine Airlines, Inc. and Inter Logistics (Cambodia) Co., Ltd. relating to Cambodia Airlines Co. Ltd. are currently being conducted,” the disclosure states, which is signed by PAL’s assistant corporate secretary, Cecilia Pesayco.
“As such, it is not true that such joint venture project has been ‘shelved,’” it adds.
The disclosure references a February 4 article in BusinessMirror, a Philippine newspaper, that cited a Center for Asia-Pacific Aviation (CAPA) study, which said that “PAL’s decision to shelve and question the viability of its Cambodian joint venture project is the right move.”
The article followed another in a separate Philippine newspaper, BusinessWorld, that quoted PAL’s president and chief operating officer, Ramon Ang, saying PAL would delay its investment in Cambodia Air because of the country’s ongoing political uncertainty.
“We are reviewing when to start and whether that project is still viable…. We have delayed it because of the situation there,” he said.
The disclosure, however, makes no reference to Mr. Ang’s comments.
Last April, San Miguel Corp., which owns PAL, signed a deal to invest $10 million for a 49 percent stake in Inter Logistics (Cambodia) Co. Ltd., which is the subsidiary through which Royal Group owns Cambodia Air.
The deal was expected to close in October after being delayed from July, and PAL was expected to pay 10 percent on closing.
A Royal Group official last year said the company expected flights to begin by October, 2013.
Since the Philippine media articles, officials at Royal Group have consistently said their company is moving forward with Cambodia Air, despite Mr. Ang’s remarks and the CAPA study. They did not respond to requests for comment Wednesday.
Calls to PAL’s communications office in Manila were not returned.