PAL to Get Better Deal from Northwest

Filipino Monitor

November 26 – December 9, 1998

Headliners

MANILA, Nov. 26 Malacañang has expressed hope that Philippine Air­lines (PAL) can get a better deal from US-based Northwest Airlines, which can make Manila its

operation hub in Asia.

President Joseph Ejercito Estrada said that PAL Chairman Lucio Tan is now in the United States to get the best terms possible for the national flag car­rier.

Tan reopened negotiations with Northwest after calling off talks with Hongkong-based Cathay Pacific Airways due to a major disagreement over Cathay’s insistence to retrench thousands of PAL pilots and other employees.

This downsizing plan, which Tan found unacceptable, runs counter to the President's earlier commitment to pro­tect the security of tenure of PAL workers.

"As a businessman, he is looking for the best partner for PAL,” he said. “That's a private matter between PAL and Northwest which we won't interfere with.”

Earlier, Estrada called on the management of PAL to ensure the retention of its workers “at all costs" when negoti­ating with foreign investors wanting to buy into the financially-troubled airline.

For his part, Executive Secretary Ronaldo Zamora said he believes PAL can become an operations hub instead of a mere subsidiary should it link up with Northwest Airlines instead of Cathay Pacific.

Zamora said Cathay, a competitor of PAL in the Asian market, had planned to make its Manila operations a mere subsidiary.

"Even before, many were saying that PAL would fit better with North­west,” he said.

Tan earlier turned down Cathay's demand to fire workers, including 200 pilots who stuck with him when PAL went on strike two months ago. According to reports, these 200 pilots are among 3,000 PAL employees Cathay plans to fire as part of its streamlining program for PAL.

Zamora said that even without the labor issue, a merger with Cathay would not have been the best for PAL since both are competitors in the region.

He pointed out that the government, which continues to have a stake in PAL, was not fully in favor of Cathay's plan to make its Manila operations a mere sub­sidiary.

Northwest, on the other hand, have the resources to transform PAL into its operations center in the region, Zamora said.