Erap: PAL Union Open to 5-Year Strike Freeze

Malaya

Sunday, September 19, 1998

But latest union turnaround may already be too late

By REGINA BENGCO

President Estrada remained hopeful closure of Philippine Airlines could still be headed off after meeting yesterday with representatives of PAL's ground personnel union for the second time in as many days.

"Mukhang may pag-asa," Estrada said during an ambush interview at the 25th anniversary celebrations of the Local Waterworks Utilities Administration.

Estrada said the PAL Employees’ Association is prepared to agree to a strike moratorium but it wants the freeze contained in a collective bargaining agreement.

He added PALEA also seeks to shorten the moratorium from 10 to five years.

PAL the other day decided to close on Sept. 23 after PALEA backtracked on a previous agreement to suspend its CBA in exchange for PAL chairman Lucio Tan's transfer of 30 percent of his holdings to PALEA members. Under the agreement, PALEA will also get three seats in the PALEA board.

A split in PALEA, however, led to the scrapping of the agreement.

Estrada said PALEA leadership rejected a proposal aired during their first meeting on Thursday that a referendum be held among members.

The referendum was proposed by the government task force on PAL which is composed of representatives of state financial institutions which are either PAL stockholders or creditors.

Estrada said he talked over the telephone to Tan yesterday morning and could understand the latter’s decision to close the airline.

"He cannot continue bleeding. I cannot also blame him. At the same time we are trying to preserve PAL as much as possible," he said.

Estrada reiterated that a bail-out by the government is not possible because of its huge budget deficit.

PAL Executive Vice President Manolo Aquino expressed doubt the decision to close would be reconsidered even if PALEA agreed to a 10-year CBA moratorium.

"Mr. Tan has already laid his cards on the table. But the union rejected it. (Besides) the process of closure has been put in place," Aquino said.

Aquino said Tan was considering infusion of additional capital had PALEA agreed to the previous proposal to rehabilitate the airlines.

The Securities and Exchange Commission has given PAL until Monday to come up with a rehabilitation plan for submission  to creditors

PAL is expected to present instead a program to sell the company’s assets to pay off claimants.

"Masyado nang mabigat ang pagkalugi ng PAL. Kahit kami ayaw naming magsara, pero wala tayong magagawa," Aquino said

Aquino said the strike called by the pilots in June followed by that called by PALEA have led to losses of P45 million to P60 million daily.

PAL lost P8.08 billion in the last fiscal year. Accumulated losses are placed at P20 billion

When PAL sought a suspension of loan payments following the pilots' strike, it declared total assets of P90,642 billion against liabilities of P85,109 billion.

PAL officials said losses since then would have wiped out the P5 billion in surplus assets.

Another PAL union, the Flight Attendants' and Stewards' Associations of the Philippines, its members are "willing to make all the necessary sacrifices" to keep the airline in operation.

But like PALEA, FASAP wants cost-saving arrangements included in a CBA.