MANILA, Philippines - The family of taipan Lucio Tan, who ceded management control of Philippine Airlines to diversifying conglomerate San Miguel Corp., plans to keep its remaining stake in Asia’s oldest carrier.
“No, we’re not selling” was the reply of Michael Tan, son of the country’s second wealthiest man, when asked whether his family would eventually sell what’s left of its stake in PAL.
The Tans now hold a 51-percent indirect stake in PAL and budget sister carrier Air Philippines after unloading 49 percent to San Miguel, the nation’s largest company by revenue, for about $500 million. The new investment, however, will be used to strengthen the operations of PAL, which has been saddled with skyrocketing fuel costs, labor problems, and fierce competition from low-cost rivals.
To stay afloat, PAL needs to upgrade its ageing fleet and add new routes.
Tan’s family has taken over PAL in 1992 when it was privatized by the government.
In 1995, Tan’s group embarked on an ambitious $4-billion modernization and re-fleeting program aimed at making PAL one of Asia’s best airlines within three years.
The 1997 Asian financial crisis, however, has crippled PAL’s financial status, forcing the airline to downsize its international operations by ceasing operations to Europe and the Middle East, reducing the size of its fleet and laying off employees.
Tan, who had a networth of $2.8 billion according to Forbes, was earlier rumored to sell all of his businesses except his liquor firm Asia Brewery Inc., the second largest brewer in the country and realty firm Eton Properties.
He also owns cigarette-maker Fortune Tobacco Corp., the country’s largest tobacco company, Philippine National Bank and Tanduay Holdings.
In addition to this, Tan owns Century Park Hotel, University of the East, Foremost Farms, and Lucky Travel Corp.