Midnight PAL Talks to Stop Closure

Today
Thursday, September 24, 1998
By Recto Mercene and Mia Gonzalez
Reporters

IT was like the countdown to a new year. Only this time, the fireworks had long been exploded. Two sides, labor and management, might as well have said nothing because they achieved nothing. Until midnight, they talked to death but actually gave nothing to each other—while the nation waited for last midnight's closure of the 57-year-old flag carrier Philippine Airlines.

Minutes before midnight, a board member of the PAL Employees' Union (Palea), interviewed on live television as management and labor negotiators met at the Century Park Sheraton, said they were told by Labor Secretary Bienvenido Laguesma that it appeared the end was near and that nothing more could be done.

It was learned that Palea was amenable to—but would not openly endorse—a second referendum on management's proposal for a 10-year CBA suspension, which it had twice rejected. The labor department said it could not hold another referendum.

Management, on the other hand, insisted that the union simply accept that first proposal.

Laguesma later explained over live television that Palea's final counterproposal apparently contained even more demands than the existing CBA, and was turned down by management.

At the PAL's main office along Ayala Avenue, Vice President for Corporate Communications Rolando Estabillo gave the official word: "So on that score, we are closed as of midnight tonight."

Earlier, as the shutdown appeared imminent, government officials readied steps to fill in the vacuum in air travel that PAL will leave, and to minimize economic disruptions.

President Estrada, emerging from a meeting with officials of three airlines that had vowed to help fill the gap, announced that Air Philippines will lease a total of 10 PAL planes for domestic flights. It will start leasing three planes today. After three days, it will lease six more and possibly another one now idled at PAL's hangar.

"Huwag kayong mag-alala [Don't worry]. Everything will be normal," Estrada told reporters after the 90-minute meeting at Malacañang Palace.

Among the other measures listed yesterday to fill in the vacuum in air travel are:

• The rechanneling of the government's P1.5-billion emergency loan offer to the other airlines that will stay in the market, to help them increase their capacity.

• The temporary surrender by government corporations of their aircraft to the Department of Transportation and Communications, to augment those to be used to carry medicine, checks for clearing, cash transfers and mail.

• A relaxation of licensing requirements by the Air Transportation Office to speed up the expansion program of other airlines serving domestic routes.

• A possible takeover by the Air Force, subject to budget constraints, of some vital services such as the mail service and the delivery of newspapers and vital communications to the provinces, especially to missionary routes.

Even as five lawmakers insisted that the government find a way to take over PAL, the mood in the executive shifted from hopeful to just wishful yesterday, hours after a referendum of the Palea rejected a proposal by PAL Chairman Lucio Tan, focusing on shared ownership with the union and a 10-year guarantee of industrial peace.

In an ambush interview, President Estrada told Palace reporters: "We have exhausted all efforts to settle the management labor dispute. So if they will not agree by midnight, then everything is over. PAL is lost. We'll make sure that business will be back to normal."

Sen. John Osmeña, who joined Laguesma at an earlier meeting at the Palace, said he read Palea's last letter-cum-counterporposal to Estrada yesterday, but it was "worse" than the Tan proposal rejected by the union.

Saying they have not received formal termination notices of their services, Palea officials advised all members to still report for work today, despite the scheduled shutdown.

Meanwhile, concerned government officials met with executives of the other airlines—Air Philippines, Asian Spirit, Grand Air and Cebu Pacific—in the hope of filling
the gap. PAL accounts for 50 percent of the total passenger capacity in local travel.

Except for Asian Spirit, the others pledged to fill in the vacuum by fielding more flights and leasing more planes to increase their aggregate monthly capacity by 45 percent from 230,000 to 510,000.

Finance Secretary Edgardo Espiritu said the government will support the airlines' moves to increase capacity and improve services, including the possible extension to them of the P1.5-billion bridge fund that it was earlier considering for PAL.

Espiritu said that while waiting for the airlines to improve their capacity—a process estimated to take 45 days—government corporations will be asked to surrender their planes to the DOTC to provide for vital services. He ruled out any government takeover of PAL saying the government did not have the resources to shoulder the more than P2 billion in liabilities.”'Definitely we will not shell out money [for PAL] unless management and the union agree."

Air Force chief William Hotchkiss, while defending his command's budget in Congress, estimated that taxpayers would have to pay P300, 000 for an hour's flight of two C-130 cargo planes to take over some vital services. The amount covers fuel and maintenance costs.

"We have to stress that the Air Force is not taking over PAL operations. We're merely saying that we can fly some of its service routes, and we can use two of our C-130s and maybe some of the other aircraft if the President sees fit to do that," Hotchkiss told House reporters. With J. Cadacio, B. Fernandez, J. Burgos