Palea Offers to Waive P4B in Benefits

The Manila Times
Monday, September 20, 1998
By Dennis Carcamo and Rhowena Parungao
Reporters

THE Philippine Airlines Emplovees' Association (Palea) yesterday said it was willing to give up its P4 billion worth of earned benefits as an act of good faith and to convince management to reconsider its decision to stop operations by Wednesday, Sept. 23.

In contrast to the union's open-door policy, however, President Estrada said he was already resigned to the fact that he can no longer stop PAL’s shutdown.

"Ginawa ko na ang lahat ng aking magagawa. [I did the best I could]," he said in an interview over radio station DZRH.

The only way to save the situation, he said, was for PAL employees to accept the management's demand for a referendum on its proposal for the union to take up a 20 percent equity stake in exchange for a 10-year suspension of the CBA.

Abel Capili, Palea board member, however, reiterated that the union's rejection of the CBA suspension was "non-negotiable."

Capili said the benefits union members are willing to waive are due them on October.

CBA not important?

Estrada said union leaders should realize that they stand to lose more when PAL shuts down. On the union's claim that the CBA suspension was illegal under the Labor Code, Estrada said,"Sa, aking pananaw basta magkasundo ay magiging illegal ba iyon? Kaya
nga ang pakiusap ko dito sa labor union ay pumayag na sapagkat hindi lamang sila ang maaapektuhan kundi ang buong bansa. [In my view as long as they agree, how can it be illegal? That's why I'm appealing to the labor union to agree because they are not the only ones who will be affected but the whole nation.]”

The President virtually dismissed the importance attached by unions to the CBA. "Ano pa ba ang CBA kung walang kumpanya? Makakain ba ninyo ang CBA? [What is a CBA if you won't have a company anymore? Can you eat the CBA?]”

Estrada claimed that he was not siding with anyone on the issue. He said he has called for another meeting between PAL management, union members and government officials on Monday.

But it remains to be seen whether the PAL management would reconsider its decision to shut down the nation's flag carrier, the President added. He said PAL chair and major stockholder Lucio Tan has been making him-self scarce.

Missing Lucio

"Tingnan natin at mukhang nawawala na. Hindi ko malaman kung nagbiyahe or talagang nagtago na. Pinahahanap ko, mukhang nawawala. [Let's see. I don't know where he is. I don't know if he's travelling or he's gone into hiding. I've asked people to look for him, he's no-where to be found.]”

Airline officials on Thursday announced PAL’s closure after its ground crew union rejected the management offer of 60,000 shares in PAL stocks in exchange for the CBA suspension. Tan said the agreement of the employees was a condition required by creditors and potential investors to ensure uninterrupted industrial peace while the company tackled its financial problems.

Meanwhile, entrepreneurs and businessmen in Mindanao have reacted with deep concern, panic even, to PAL’s imminent closure.

A forum organized to tackle prospects for an airline industry in Mindanao turned into some sort of group therapy session of businessmen who know that times are going to get bad before they get any better.

Johnny lbaza of the Metro Cotabato Chamber of Commerce pleaded with officials of PAL, Cebu Pacific Air and Mindanao Express to "please give us aircraft." He said that following the PAL strike last June, all flights to Cotabato City have been canceled, adversely affecting even the Sultan Kudarat and Maguindanao areas.

Mindanao resolution

A representative from the Zamboanga chamber suggested that the 7th Mindanao Business Conference (MBC), which organized the forum, submit a resolution to Estrada expressing the concerns of Mindanao businessmen. Others wondered, however, if the problem was out of Estrada's hands. Estrada was scheduled to address the conference in Davao yesterday but his flight was canceled "due to bad weather."

Sebastian Angliongto, the new chair of the Mindanao Economic Development Council, said PAL's closure would adversely affect investment promotion and trading in Mindanao.

Diego Garrido, general manager of Cebu Pacific, said since PAL announced it was ending its 57-year operation, his airline has gotten in touch with other airlines, including Air Canada, regarding the possibility of acquiring more aircraft.

Mindanao Express president Ramon Gutierrez said they are negotiating for the acquisition of a 737.

Gutierrez also urged the Air Transportation Office to improve navigational facilities in smaller airports in the country so they could service other routes.

Phase out

Former Presidential Assistant for Mindanao Paul Dominguez told reporters Mindanao would be most affected by PAL’s closure because it is the farthest point in the country.

"If PAL is not viable, then sana may phase-out period. A sudden closure is calamitous," Dominguez said.

Garrido said it would take at least three to six months for other airlines to put the "basic foundation back in, to replace even 20 percent" of the gap that would be created by PAL's shutdown.

Garrido also said an open-skies policy for the Philippines at this time, when the currency crisis is forcing Asian airlines to scale down operations, won't alleviate the effects of PAL's shut-down.

Just because the country declares an OSP doesn't mean Asia's other airlines will all jump in to take advantage of PAL's shutdown, Garrido said.

He said declaration of OSP will only allow more foreign airlines to ply Philippine routes.

Midway through the forum, a tourism official read a press statement issued by Tourism Secretary Gemma Cruz-Araneta in which she said she would propose for an OSP to offset the effect of a PAL shutdown on the country's tourism industry.

She said foreign airlines should come in to service the tourism sector of the country.

Instead of an OSP, Garrido suggested that airlines go into strategic alliances with other Asean airlines.—With reports from Caloy Conde