Prospective PAL Investors Wanted CBA Suspension

Philippine Daily Inquirer
Thursday, September 24, 1998
OPINION
Political Tidbits
By Belinda Olivares-Cunanan

SEN. John Osmeña was on his way to Bacolod last weekend aboard a PAL plane, when just before its doors closed, a familiar figure came aboard and asked if he could sit beside him. It was PAL chairman Lucio Tan himself, en route to a convention of Chinese-Filipino businessmen in Bacolod. During the one-hour flight, Tan revealed to Osmeña that a consortium was willing to plunk down P50 billion to bail out PAL and keep it flying, but its minimum demand was a 10-year suspension of the CBA of PAL's employees. Tan gave the impression that the new investors felt the airline could be turned around if only there would be 10 years of industrial peace and that he was quite amenable to giving it another try despite the airline's P92-billion indebtedness.

The suspension of their CBA rights for 10 years was the specific management demand rejected by a very narrow margin by PAL employees in their recent referendum, which finally led to PAL’s closure at midnight last night. Frankly, I didn't think the side voting to close down PAL would win since so many jobs were at stake. I thought the issue of jobs and security in these times of crises would win over what probably is a difficult demand for a labor union to give up their bargaining rights. Some Palace officials conceded that a 10-year suspension was rather steep and they were looking at five years. But presently this was not acceptable to the investors, and the referendum overtook negotiations.

My only concern is that the PAL employees knew what they were getting into when they voted down a settlement with management; that it was their own decision and that they were not being manipulated by labor supermanipulator Popoy Lagman. The union should be aware, though that the sympathy of the public is against what is perceived to be the union's recalcitrance during the negotiations with management. The trouble with some labor leaders is that they line their pockets (many of them are multi-millionaires already), while it's the little employees who suffer from the loss of job.

In our conversation, John Osmeña emphasized the need to get even a fraction of PAL flying since the whole country would suffer if it completely stops operating. He noted that Cebu Plaza, the city's No. 1 business hotel, which closed down for a few months due to labor problems and the Asian crisis, just reopened last Sept. 15. The day after PAL's impending closure was announced, Cebu Plaza ran an ad in the local dailies saying that if PAL closed down, the hotel would have to close down again as it would not make money without PAL.

Cebu Plaza's plight is repeated in Davao City, where a number of hotels are said to be panicking. Davao hotels were anticipating good business from a number of conventions scheduled there, which would now presumably he cancelled. Other hotels and establishments around the Visayas and Mindanao will suffer the same fate.

Let's face it, the other smaller airlines cannot take on the 70 percent of air business that PAL used to service. With the state of our shipping industry, many travelers are afraid to take the boats. Smaller cities will be isolated. For instance, House Majority Leader Mar Roxas points out that while his fellow Capizeños used to take direct flights to and from Roxas City, now they will have to drive two hours to Iloilo to take the Cebu Pacific flight to Manila. And what about the cargo PAL used to fly? The tuna industry, for instance, which used to send its produce to the sushi bars of Tokyo in time for lunch, will now suffer. The cutflower industry of Visayas and Mindanao will also suffer.

As John Osmeña put it, out-of-towners will feel the loss of PAL deeply because this country is so Metro Manila-centered ('Imperial Manila"). Who'll now fly the daily newspapers from Manila? He pointed out that people from the provinces have to come to Manila to get visas as well as take professional examinations. Bank branches around the country release loans of up to P50,000 only; those involving bigger amounts are released at the banks' headquarters in Metro Manila.

No doubt about it, the economy will suffer gravely because of the closure of PAL. I wish Popoy Lagman and his ilk thought about it for once. The Palace task force set up by President Estrada to study a possible rescue of PAL is fully aware of this. The P15 billion cost of keeping PAL planes flying to 14 points in the Visayas and Mindanao is deemed to be much less than projected losses.