Today
Friday, December 4, 1998
MANILA—Cathay Pacific Airways yesterday said it will "remain open to future cooperation with beleaguered Philippine Airlines but denied suggestions that this "openness" could lead to new negotiations for a major stake in PAL.
In a statement, Cathay said possible future cooperation between the two airlines will most likely be limited to "other areas of mutual benefit," but stressed that these areas no longer include the option of buying into or managing the Philippine flag carrier.
Despite a statement from President Estrada that contradicted Cathay's position—Estrada yesterday said Cathay had written to him, expressing a willingness to reopen negotiations with PAL—Cathay spokesman Katherine Wang said from Hong Kong that "we wouldn't revisit 'the matter' unless there is a fundamental change in the situation." She declined to elaborate as to what chances could make Cathay reconsider its decision to abandon the talks.
But as Cathay stressed that it is no longer in negotiations regarding a possible investment in PAL, "Estrada said in an ambush interview that "Cathay management wrote me a letter that they're still available for another negotiation."
He added: "Let us not lose hope. I am just waiting [to talk to PAL chairman Lucio Tan who was expected to arrive from Guam yesterday]. Maybe there's still a chance for them to come to an agreement."
Pressed for Cathay's "letter" to Estrada, however, the President and Malacañang officials failed to produce the document.
Cathay Pacific said on Wednesday that it has decided to withdraw from talks with PAL over "irreconcilable differences." The Hong Kong-based airline reportedly cannot commit to the full management of PAL unless it can retrench some 3,000 PAL workers. In return for their ending a crippling and near-fatal strike two months ago, both Estrada and Tan had promised PAL's 8.000 workers that none of them will lose their jobs.
Cathay also attributed the breakdown of talks on Wednesday to differences on the valuation of PAL. "There was a gap between the valuation expected by PAL, existing shareholders and our own estimates," Cathay spokesman Quince Chong told Reuters.
At least one PAL official, however, insisted that all is not lost in their talks, suggesting that Cathay is merely playing hardball. "This is brinkmanship." the official said.
Amid the conflicting statements and assessments, PAL yesterday said it would submit a rehabilitation plan to the Securities and Exchange Commission by December 7, still with provisions for a strategic partner. The airline said a local group had committed to inject $90 million of the $I50 million it needs for rehabilitation. It also said it had resumed talks with a potential foreign investor. Estrada reiterated that he has he led out the possibility of his government bailing out PAL.
LAMP Rep. Joey Salceda yesterday revived suggestions that Malacañang work out loan guarantees for the airline, saying the "national dignity and the welfare of PAL's workers" are at stake.
Labor leader Crispin Beltran echoed Salceda's comments. “The government should save itself the trouble of looking for a buyer for PAL, and should [instead] infuse money into the national flag carrier and he the main shareholder in the company."
Estrada said this was out of the question. "The government has no money, [and we] will not guarantee any private company." With reports front M. Gonzalez, R. Mereene and Reuters
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