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03
Jul

Cebu Air sells majority stake in aviation unit

Written by bh0ngg. Posted in News

It said in a stock exchange filing on Monday that the buyers were Philippine Airport Ground Support Solutions Inc., also known as PAGSS, and the latter’s shareholder, businessman Jefferson G. Cheng.

Cebu Air said it had sold the 60-percent stake in 1Aviation Groundhandling for an undisclosed amount.

The deal gives PAGSS a major footprint in the crucial aircraft ground handling business, where it will compete with other players, including Lucio Tan’s MacroAsia Corp.

1Aviation Groundhandling was incorporated in March, a move mainly motivated by the government’s decision not to renew a contract with Miascor Aviation Services in Manila’s Ninoy Aquino International Airport and other air gateways.

Cebu Pacific was a major customer of Miascor, which was once the country’s largest independent ground handling company.

Cebu Air president Lance Gokongwei was quoted in the disclosure as welcoming the investment by Cheng, whose family owns Philippine International Air Terminals Co. (Piatco), and PAGSS, adding the company “brings decades of experience in ground handling for the benefit of airline passengers.”

Cebu Air announced separately that it had signed an agreement with Switzerland-based IPR Conversions Ltd to convert two of its ATR 72-500 passenger aircraft into dedicated cargo aircraft.

This marks the first foray of Cebu Pacific in operating specialized aircraft to transport cargo.

“We will be able to offer cargo capacity that no other carrier in the Philippines can provide,” said Gokongwei.

Cebu Air expects to receive the first of two converted aircraft in the fourth quarter of 2018. The cargo aircraft will continue to be operated through its wholly owned subsidiary, CebGo.

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