A Temporary Inconvenience

Manila Standard

Thursday, September 24, 1998

Editorial

UNLESS a miracle has taken place, it would be safe to assume that the airline formerly known as Philippine Airlines will have ceased to exist as of midnight last night. It does not matter that the government, in desperately seeking a stay of the closure, has vowed to infuse P1.5 billion to allow PAL to continue flying 14 domestic routes. PAL as we know it is no more although it may be resurrected in one form or another.

Last Tuesday's employees' referendum was tellingly definite: The 7,000 or so employees still with the airline when the week began thumbed down the continued existence of the flag carrier, mostly by staying away from the voting. Only 2,562 PAL employees voted, a statistic more significant than the supposedly close tallies of those who voted for or against the proposal of PAL Chairman Lucio Tan to give board seats and shares of stock in exchange for a 10-year bargaining moratorium.

But perhaps it was all to the good that PAL shut down. There appeared to be no realistic hopes that management and union would set aside their differences and continue working to keep the 57-year-old airline flying. Despite the frenzied attempts of government negotiators led by President Estrada himself, no major breakthrough had been reported in the talks since the sudden repudiation of Tan's offer the first time it was made — and accepted — two weeks ago.

In such an environment of distrust and belligerence, no compromise would hold for any significant length of time. While the government's efforts to rescue PAL were laudable, succeeding events proved that they were inadequate or even foolhardy. The government was always an outsider in the PAL dispute never mind if it was part owner of the airline. It was an internal conflict, and it was "solved" internally with the total collapse of all negotiations. The referendum was merely the final nail on PAL's coffin.

Surely the closure of PAL will create a transportation crisis in some areas. However, warnings that commerce, tourism and even the delivery of government services will grind to a halt because PAL is no more are speculative, to say the least. While a PAL shutdown would have created such an effect several years ago, when it was the only domestic airlines, the same conditions no longer exist. In the deregulated skies of domestic air travel, PAL no longer holds even 50 percent of the market, despite the size of its fleet and the number of its flights.

Of course, the defunct airline used to fly 14 so-called "missionary" routes to cities which will obviously have to be serviced in the short term by some sort of skeleton PAL fleet and work force. The projected adverse effects of PAL's demise will be felt most and quickest in these areas.

Even Finance Secretary Edgardo Espiritu, head of the government task force to save the air carrier, admitted to an interviewer yesterday that talks are already under way to give the P1.5 billion "bailout" fund to other domestic airlines instead, so that they may immediately expand to all the routes formerly serviced by PAL.

Mr. Espiritu implied that the fund was allocated on the premise that the union would vote "yes" during Tuesday's referendum. Now that the employees have said that they no longer wish to work for PAL under the present ownership, giving P1.5 billion to PAL will surely be throwing good money after bad. If the government wishes to be paid for plunking down precious currency to keep people and goods moving in the air, it would certainly stand a better chance if it gave the fund to the other airlines.

As for international travel in and out of Manila, other, more efficiently-run airlines are only too willing to take up the slack. There is no shortage of carriers to take the place of the bloated expensive and inefficient flag carrier.

All the other airlines, domestic and foreign, can also be expected to absorb those members of the PAL work force who can make the grade.

So much has already been said about the long-running dispute at PAL. Now that the airline is kaput, what remains to be done is to pick up the pieces and make do as best we can.

So PAL is no more. It is not yet the end of the world.