MANILA, Philippines - Philippine Airlines (PAL) on Wednesday denied it is shelving a joint venture deal with Royal Group of Cambodia to form Cambodia Airlines.
"We wish to clarify that on-going preparations for the completion of the comtemplated joint venture agreement between Philippine Airlines, Inc. and Inter Logistics (Cambodia) Co., Ltd. relating to Cambodia Airlines Co. Ltd. are currently being conducted," PAL said in a disclosure to the stock exchange.
"As such, it is not true that such joint venture project has been 'shelved'," it added.
PAL issued the clarification after BusinessMirror quoted the Center for Asia-Pacific Aviation (CAPA) as saying "PAL’s decision to shelve and question the viability of its Cambodian joint-venture project is the right move."
"The group should focus on the Philippine market, where it has opportunities but challenges including stiff competition from LCCs [low-cost carriers]. It should avoid the temptation of revisiting the Cambodian project or pursuing any other potential overseas joint venture," the CAPA said.
PAL announced it was forming a joint venture with Inter Logistics (Cambodia) last year. However, it has not been finalized yet.