Losers in PAL Closure

Today

Saturday, September 19, 1998

Opinion

Counterpoint

By Alvin Capino

WHEN Roman Cruz Jr. was still President of Philippine Airlines, then PAL Vice President for Corporation Communications Enrique Santos launched a memorable corporate ad campaign which harped on the theme that the national flag carrier "services people who don't even fly."

The ad explained that PAL also flies everything from medicines to newspapers to far-flung destinations throught the achipelago.

I remember that PAL ad campaign because it now serves to emphasize that there are many other big losers if last-ditch efforts to prevent the closure of PAL were to fail.

The radical reduction of PAL's domestic flights have caused serious dislocations in the routes the airline served. In Cebu, for example, owners and workers in hospitality industries blame the slump in business to curtailed flights of PAL. Businessmen in Davao and General Santos City have also complained about the lack of cargo space for the seafood that they send to Manila because of the flight reductions PAL imposed after the crippling strike of its pilots union.

It should not be too hard to imagine what could likely happen after September 23. PAL's rivals in the domestic routes will not be able to fill the void that PAL's closure would create. The airlines that would be left operating are small and most are plagued by severe financial and operations problems of their own.

Underscoring the problem of domestic commercial aviation was a story that also broke yesterday about the Air Transportation Office suspending the flights of aircraft used by two of PAL's domestic competitors for violations of safety regulations.

The decision of taipan Lucio Tan to close down PAL was triggered by the decision of the majority of the board of directors of the airline's ground personnel union PAL Employees' Association to reject the agreement earlier reached between management and Palea officers.

Under the agreement, Tan would transfer 30 percent of his holdings in the airline to the employees in exchange for a 10-year moratorium on collective bargaining.

The decision to reject Tan's offer was made only by the Palea board. In view of its grave implications for the very livelihood of PAL employees, shouldn't the stock transfer-CBA moratorium have been subjected to a referendum of all Palea members?

Perhaps this is the tack the government should take. It should try to persuade the Palea officers into holding a membership-wide referendum on the stock transfer-CBA moratorium plan. Only after a referendum could it be truly said that all avenues were explored to prevent the closure of PAL and avoid its adverse impact on the already troubled economy.