Philippine Airlines seeks a strategic investor as its international expansion continues

Philippine Airlines (PAL) continues to look for a strategic investor to support turnaround efforts and further international expansion. But so far foreign airlines have been reluctant to invest in PAL as the flag carrier's position in the highly competitive Southeast Asian market remains challenging and synergies with potential suitors are relatively limited.

A new partnership with Etihad will improve PAL's outlook. But PAL needs more partnerships and ideally a new investor.

Meanwhile competition in the Philippine international market is intensifying as PAL aggressively adds capacity in markets that Cebu Pacific is planning to enter. There is a risk of overcapacity as PAL continues to pursue ambitious international expansion.