Saving Philippine Airlines

Tonight

Saturday, December 5, 1998

Editorial

EFFORTS to keep the Philippine Airlines (PAL) from going under is commendable when one considers the increasing volume of air traffic on this side of the Pacific and the prestige that goes with having a flag carrier of our own.

President Estrada himself is hopeful that PAL and Cathay Pacific will resume merger negotiations, which broke off owing to a number of differences.

"I am not giving up," the President declared as he disclosed that Cathay wrote him a letter, seeking an audience with him.

At the same time, Finance Secretary Edgardo Espiritu disclosed that there are other foreign and local groups willing to invest in PAL.

Even so, he added, the group of Lucio Tan, which owns 70 percent of PAL, had expressed willingness to put up the P6 billion capital infusion needed to bring PAL back on its feet.

Similarly, Congress is considering a bailout package for PAL, including a $450-million guarantee to unsecured creditors of the ailing airline.

Also in the works is a proposal in Congress for a government takeover of PAL in case other options fail.

On the part of Tan's group, it was reported that it is ready to infuse $100 million or P4 billion in fresh capitals to rehabilitate PAL, an indication that all is not lost.

To prove this point, the PAL board said the flag carrier will submit on Monday its rehabilitation plan to the Securities and Exchange Commission, with or without Cathay.

All this shows that all efforts are being undertaken to save the country's flag carrier.

In the face of all these difficulties, government authorities are loath to relinquish the country's air space to foreign airlines and turn over to them the increasing volume of traffic in the Pacific route.

The government was correct in turning over control of the flag carrier to the private sector.

Allowing it to close down for lack of government support is another matter.

It must not be allowed to happen.