Andrew Doyle/MUNICH
Lufthansa Consulting, a subsidiary of the German flag carrier, has signed a two-year contract with Philippine Airlines (PAL), which should see it play a major role in the restructuring of the struggling Asian carrier.
The move effectively kills plans for Regent Star, a consultancy formed by a group of ex-Cathay Pacific executives, to take charge of PAL. It is understood that discussions have begun on the termination of a five-year contract signed late last year. The Lufthansa Consulting contract runs from 1 July, with a two-month assessment period - during which it can pull out - followed by a two-year deal running to September 2001.
PAL stresses that Lufthansa will not take full management control, but simply provide consulting services, focusing on routes, fleet and cost management. The contract is a monthly flat fee only deal, with no bonus, but carries an extension clause and is thought to have a value running to several million dollars. It also allows for the possible involvement of other Lufthansa subsidiaries, including leasing company GOAL.
Lufthansa was awarded the contract after PAL chairman Lucio Tan visited the German carrier's chief executive, Jurgen Weber, in Stüttgart nearly a month ago. Tan is believed to have brokered a deal which means that PAL's unions will reserve judgement on the move.
Lufthansa Consulting, meanwhile, reports that following its eight-month involvement with Garuda, where its personnel occupy key positions, the Indonesian carrier has increased its passenger load factor from 55% to 68%. It adds that "operating cashflow is now positive".
Source: Flight International
