"Lufthansa is coming in to manage (PAL) within the month," finance secretary Edgardo Espiritu told reporters. "There would be a management contract."

Espiritu was among several cabinet members assigned by president Joseph Estrada to help the 58-year-old flag carrier avoid bankruptcy. Government Fis are minority shareholders in the airline. Espiritu said the German carrier would be asked to handle the marketing side of PAL, Asia's oldest airline, which is under administration.

PAL's rehabilitation plan, approved by regulators earlier this month, would still be pursued under new management, and includes the spinoff of non-core operations, he said.

The key component of the recovery plan is a capital injection of at least $200 million by Friday.