Philippine Daily Inquirer
Sunday, September 20, 1998
By Juliet L. Javellana and Clarissa S. Batino
LUCIO TAN missing?
The Chair and chief stockholder of Philippine Airlines did not show up for a Malacañang meeting on Friday with President Estrada, who yesterday said in exasperation that he had "done all I can do" to halt PAL's scheduled closure.
Mr. Estrada admitted hope was dwindling after Tan declined to meet with him.
“He seems to be missing," the President said in a radio interview yesterday. "We were looking for him (Friday). I was supposed to meet with PAL management yesterday. I don't know if he's abroad or if he's really hiding.
"I have asked my people to locate him," he added.
On Friday, the PAL Employees’ Association (Palea) also sent Mr. Estrada a letter refusing to hold a referendum among its members on whether to accept a rescue plan offered by Tan.
The plan would give workers 20 percent of the company’s stock and three seats on its board in exchange for a 10-year suspension of their collective bargaining agreement (CBA)
In the dzRH interview yesterday, the President chided the union heads, led by Filemon "Popoy" Lagman, for refusing Tan's offer and warned that PAL's planned closure would hurt millions of Filipinos.
"I have done all I can do," the President said in the interview, referring to his talks with management and labor leaders.
Officials of all three PAL unions say the 10-year suspension of their collective bargaining agreements was unacceptable.
"Here (with this agreement), the lawyers and the labor leaders may lose their jobs," said the President. "The laborers will profit along with the management and they will not need labor leaders."
He said he had tried appealing to the union "if they can just agree because it is not just they who will be affected but the whole country."
"What's a CBA for if the company has closed down?" he said addressing Palea. "Can you eat the CBA?"
Mr. Estrada warned that PAL’s closure would severely hamper domestic air travel. The country has four smaller airlines, all of which have recently failed safety' audits.
One, Air Philippines, was grounded by regulators on Friday; another, Grand Air, canceled its flights Friday after failing to pay insurance and fuel bills, employees said.
Mr. Estrada has no more meetings scheduled with the unions or management, according to Executive Secretary Ronaldo Zamora.
PAL, Asia's oldest airline, announced Thursday it would halt operations after 57 years because of its unions' rejection of the rescue plan.
A crippling pilots' strike in June aggravated the financial crisis and forced PAL to drop 5,000 employees and fire 600 pilots.
No to open skies
Two of PAL's competitors Cebu Pacific and Mindanao Express—cautioned the government against declaring an "open-skies policy." insisting that the "best practical solution' was still to save PAL.
Cebu Pacific general manager Diego Garrido said an open-skies policy would not necessarily attract foreign airlines to take PAL's routes.
Mindanao Express president Ramon Gutierrez warned that the open-skies policy would definitely kill struggling and small airlines because of competition.
Garrido and Gutierrez said the government should save PAL from closing down as they admitted that they could not fill up the void that PAL's closure would create.
Tourism Secretary Gemma Cruz-Araneta had advocated for an open-skies policy as she expressed fears that PAL's shutdown would lead to "calamitous effects"
Open skies refers to the relaxation of restrictions regarding the frequencies. types of aircraft, number of passengers and amount of tonnage in designated routes.
Big and small ones
Makati Business Club Executive Director Guillermo Luz said almost all sectors of the economy would be affected by PAL's closure.
For instance, he said, Petron Corp. which supplies half of PAL's jet fuel requirements, would suffer from lower sales.
The oil firm has P200 million in receivables from PAL. Other PAL fuel suppliers like Mobil Oil are also likely to feel the effects of the shutdown.
Luz said there would be gainers like rival airlines and those in the chartered flights business, as well as cargo flights and even shipping firms.
"But there is not enough air cargo space;" he added, "and in the case of domestic passenger airlines, not enough fleet and flights to bring travelers and cargoes to their destinations"
Cebu Pacific has eight planes. Grand Air has three, and Air Philippines has six. PAL currently operates 25 of its 54 planes and flies to 16 local points and seven foreign destinations.
PAL carries a maximum of 32,000 passengers weekly. In a month, it could fly 200,000 domestic passengers and roughly 73,000 to foreign destinations.
Agents and driven
Travel agent Mario Antonio, of a prominent company, was one of the first to panic over news of PAL's closure.
He has booked 20 of his 30 clients for PAL's local and overseas destinations for Sept. 23, the day PAL said it would close down.
Even Pablo Reyes, a taxi driver who bought his own taxi two years ago, was saddened by PAL's disclosure last Thursday.
He said PAL's shutdown would cut his income by 20 percent.
Luz said PAL's closure would also affect exporters, sales people, hotels and resorts, restaurants, banks, freight forwarders, drug companies and more.
Philippine Exporters Federation president Sergio Ortiz-Luis said: "There are raw materials and finished goods that need to be transported by air. We are sure to be hit."
Mango exporter Bobby Amores expects the sales of his Hi-Las Marketing Corp. to suffer from a 50-percent decline, With reports from Jowel F. Canuday, Ayan C. Mellejor, PDI Mindanao Bureau; Malou Guanzon, Nagiel B. Bañacia, PDI Visayas Bureau; AFP, AP
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