A Japanese-Owned RP Flag Carrier

Today
September 8, 1998
Opinion
Alvin Capino

'The Civil Aeronautics Board has recommended to Malacañang the designation as a Philippine flag carrier of a fly-by-night outfit owned by shady Japanese investors.'

THE case of CLA Air Transport Inc., a recently organized cargo carrier, has confirmed once again the inutility of the Civil Aeronautics Board to serve as the country’s aviation watchdog. 

Once can only surmise the reasons why the board gave CLA a temporary operating permit on March 9 and even recommended to Malacañang the designation of the carrier as a Philippine flag carrier.

From all indications, the company is a fly-by-night operation owned by a group of shady Japanese investors out for a fastbuck.

Records of the Securities and Exchange Commission show that, based on the papers filed by CLA, it is 49-percent owned by IASS Co. Ltd., a Japanese company.  The rest of the stocks are reportedly owned by Filipino companies and individuals.  Questions have been raised on the ability of the Filipino investors listed to put up the money they were supposed to have invested in CLA.  Suspicions have been raised that the Filipinos are  merely dummies or fronts for the Japanese.

In issuing a permit to the cargo carrier, the CAB missed one important point: that the 49-percent Japanese equity in the company already disqualifies CLA from carrying out air transport activities as a Philippine flag carrier.  This prohibition is clearly stated in Article 12, Section 11, of the Constitution, which states: “No franchise, certificate or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations organized under the laws of the Philippines at least 60 percent of whose capital is owned by such citizens.”

It would have been understandable, although still illegal, if the beneficiary of the CAB’s generosity were a world-class airline and there is no local carrier capable of matching it.  But what kind of airline is CLA?

CLA officials will admit that it does not own a single aircraft.  It does not have a single pilot.  It has not mounted a single flight in its one and a half years of existence.  In other words, CLA is an airline existing only on paper.

CLA might have no credentials as an airline, but what it clearly and undeniably has are powerful and influential backers.  Its six-month temporary permit expires on September 9; the CAB is entertaining its  request for extension.  One can only guess who is behind CLA that the CAB is willing to bend over backward for it even to the extent of condoning the blatant violation of our laws.

Only in the Philippines can such a thing happen.