Manila Standard
Monday, September 21, 1998
Business tycoon Eduardo Cojuangco is not about to play hero and save Philippine Airlines (PAL) from extinction by Wednesday.
Although the government would prefer that private investors acquire PAL, no one has expressed interest in buying Asia's first airline at this time, Finance Secretary Edgardo Espiritu, who heads the interagency task force for the rehabilitation of PAL, said yesterday.
Asked to confirm reports that Mr. Cojuangco was interested in investing in PAL, Espiritu disclaimed knowledge of such an intention by Cojuangco.
New company
A second option for the government is for private investors to form a new company that will fill the vacuum to be created when PAL shuts down Sept. 23, Espiritu said.
Cojuangco has a franchise for domestic and international airline operations.
A third proposal is for the government to take over PAL.
But Espiritu shot down the proposal that the government take over, a position which Executive Secretary Ronaldo Zamora has also taken. "I don't think we have the money to run PAL," said Zamora. "It's been losing for many years. I don't think right now it's a viable proposition."
Losses
PAL has racked up losses amounting to P14.8 billion since 1994. Its foreign debts total $2.1 billion.
“That (government takeover) will not happen," said Espiritu. "The government has very scarce funds and these are better spent on more important social concerns."
The government has a P23-billion stake in PAL and a P34-billion loan exposure to the airline.
President Estrada himself seemed to have given up on PAL.
"I have already done all I could," the President said over the weekend.
He added that he had gone out of his way to exhaust all means to settle the differences between PAL, management and the PAL Employees’ Association (Palea).
PAL announced Thursday it would stop operations on Wednesday after Palea rejected its offer of three board seats and 20 percent ownership in exchange for a 10-year moratorium on its collective bargaining agreement.
President Estrada failed to convince Palea officers to soften their position during a marathon meeting in Malacañang Thursday night.
The President tried to meet with Lucio Tan, chairman and majority owner of PAL, but Tan begged off, having heard of Palea's rejection of his proposal for a 10-year moratorium, a condition set by investors and creditors of PAL.
Gov’t takeover
A government takeover of PAL was suggested by Senate President Protempore Blas Ople who is set to file today a resolution calling for the takeover as a temporary measure, at least until the Asian financial crisis has abated and the flag carrier can be reverted to private ownership.
Ople said a government takeover, aside from ensuring PAL's continued operation, would attract creditors and investors to shore up the firm's financial position.
Employees of PAL, meanwhile, are seeking divine intervention to stop the closure of the airline.
The SAVE PAL Movement, a voluntary group formed by at least 80 percent of PAL's 9,000 employees, has organized prayer rallies at the PAL Sports Complex.
"As we fervently plead for divine intervention, we also implore all parties concerned, including the government, to seek all possible avenues to reverse the imminent demise of Asia's once-proud first airline," SAVE PAL Movement said in a statement.
Blackmail
Meanwhile, a leftist labor leader yesterday accused President Estrada of siding with Tan and of coercing airline workers into surrendering to the "blackmail" threats of management.
Felimon Lagman, chairman of Bukluran ng Manggagawang Pilipino labor federation to which Palea belongs, assailed President Estrada for favoring Tan's demand to suspend collective bargaining while the airline is under rehabilitation.
"Workers, conscious of their rights, will rather die in hunger for their principles than work as slaves for the likes of Lucio Tan;" Lagman said. With Rlo N. Araja
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