Cathay Wants Another Go at PAL

THE JOURNAL

FRIDAY, DECEMBER 4, 1998

CATHAY WANTS ANOTHER GO AT PAL (3) BY BERNADETTE TAMAYO AND ITCHIE CABAYAN

PRESIDENT Estrada revealed yesterday that Cathay Pacific wanted to renegotiate a deal with Philippine Airlines.

In a press conference,the President said Cathay had written him about its intention to reopen discussions with PAL for a 40 percent stake in the cash-strapped national flag carrier.

Mr. Estrada, however, has yet to talk to PAL chairman Lucio Tan about Cathay's plan since Tan is still in Guam.

"The Cathay management wrote me a letter that they are still available for another negotiation. So, Iet us not lose hope,” the President told Palace reporters.

Mr. Estrada held a press conference at his Greenhills residence after Bangko Sentral Gov. Gabriel Singson presented to him the P2,000 Centennial commemorative note.

I'm just awaiting for the return of Mr. Tan and talk to him and maybe there's still a chance to for them to come into an agreement,” the President said.

"So, I am not giving up because the management of Cathay wrote me a letter and they said they are willing to renegotiate anew.-

The President acknowledged the assistance extended to the government by Cathay when it conducted emergency provincial flights following PAL’s decision to close down.

"We owe it to Cathay when asked for their help during the (PAL Employees' Association) strike. I asked the help of Cathay and they responded. So I think I can talk it over with them," he said.

The President reiterated that public funds will not be used to rehabilitate the debt saddled PAL, saying the government, which has no money to spare, would not bail out any private firm.

“The government has no money. The government will not guarantee any private firm." he said.

The Chief Executive expressed confidence that a deal could be sealed between PAL and Cathay noting that it was the latter which helped his administration cope with PAL's temporary closure last Sept. 23.

Cathay entered into a "wet lease" agreement with the Philippine National Bank Holdings Inc. two months ago to allow it to fly the domestic routes abandoned by PAL when it closed shop on Sept. 23 following the collapse of talks between PAL management and its employees.

Under this arrangement, Cathay Pacific used its own complement of pilots and flight attendants in plying the country's major domestic routes.

The government resorted to this temporary measure to prevent any disruption in the domestic airline industry and save businesses heavily dependent on air transport.

The Cathay-PNB holdings agreement was terminated after PAL resumed operations on Oct. 7, following the ratification by its employees of a labor-management accord giving them 20 percent equity and three board seats in the airline in return for the 10-year suspension of their collective bargaining agreement.

Mr. Estrada had convinced PAL employees to approve the accord after assuring them he would protect their security of tenure at the airline as long as he is President.