PAL Losing P21 Million A Day – Erap

The Manila Times

Sunday, December 13,1998

PRESIDENT Joseph Estrada yesterday said the ailing national flag carrier, Philippine Airlines (PAL), was losing P21 million daily but he was still hopeful it could find a strategic partner.

“It is losing P21 million daily. It is still overstaffed,” Estrada said in his weekly radio program “Jeep Ni Erap.”

The 57-year-old PAL, Asia’s oldest airline, now has a workforce of over 8,000 from an earlier 13,000 before a three-week pilots’ strike in June forced it to seek debt relief from the Philippine Securities and Exchange Commission (SEC).

Estrada also said the airline was suffering from stiff competition as a result of the “open skies policy” adopted by the previous administration.

In the six-month period to end September, PAL’s net loss widened to P6,099 billion from a net loss of P2,118 billion a year earlier. PAL’s fiscal year ends in March.

Rehab plan

The airline has filed a rehabilitation plan with the SEC, seeking debt restructuring, an infusion of fresh capital and the slashing of routes and aircraft in service.

Estrada said talks with possible  foreign partners to take a stake in PAL have not moved forward, although he was optimistic they would.

“In Cathay, I have not lost hope,” he said.

Last week, Cathay Pacific Airways Ltd. said it had abandoned talks with PAL due to differences on issues such as management control and valuation. Despite Estrada’s personal courting, the airline has refused to return to the discussions.

PAL’s discussions with Northwest Airlines Corp. also broke down.

PAL shut operations in September due to huge financial losses and a protracted labor dispute. It resumed operations after some weeks when Estrada persuaded the airline’s biggest labor union to accept 20 percent equity in return for 10 years’ freeze on wage bargaining and strikes. – Reuters