Thursday, September 24, 1998
EDITORIAL
The dirge isn't playing yet for Philippine Airlines. Asia's oldest airline got a reprieve last night. Under strong pressure from President Estrada, PAL's management and union agreed to continue talking, thus preventing the airline's shut-down scheduled last night. Administration officials had scrambled to save the flag carrier after the union opted the other night to lose their jobs rather than suspend their collective bargaining agreement. And PAL chairman Lucio Tan appeared ready to lose an airline rather than continue flushing up to P60 million a day down the PAL drain.
PAL is saved — for now. But even if a compromise is forged between labor and management, no one can say how long the truce will hold. Saving PAL from the brink has one upside: it put into sharp focus how crucial the flag carrier's services are. Other airlines can try to fill in the void left by PAL. But even with all their fleets put together, these airlines can't absorb at this time PAL's daily passenger and cargo load. Neither can the public expect these smaller airlines, which are themselves suffering from the Asian contagion, to fly PAL's so-called mercy flights — those non-profitable routes that a flag carrier must serve.
PAL's flights remain suspended. The impact of the disruption in PAL's services is already being felt as passengers and businessmen vie for limited space in the other airlines and seek in vain for an equally swift mode of transportation in this archipelago. Water transportation is slow, unreliable and dangerous in this typhoon season. Land transportation is worse. A slowdown in PAL's operations is likely to hit the economy hard, and the biggest loser will be the public.
PAL's troubles highlight the need to develop the nation's domestic air transportation services. This point is being made at the worst time. The government must immediately offer incentives to lure new players in the domestic airline industry. But the incentives may have to be unusually liberal to entice new money to an industry that has been one of the worst hit by the Asian crisis. Incentives to foreign investors may also hit the fledgling local players in the airline industry. The problems of this industry, however, may require drastic solutions. The disruption in PAL's services has shown the vital role played by air transportation in the nation's economy. This is an industry that clearly needs strengthening.
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