Why PAL Remains Vital

Malaya

Monday, December 21, 1998

The government should avoid the economic backlash posed by the financial woes of flag carrier Philippine Airlines and should act swiftly in saving the beleaguered airline from going down the drain.

This was the opinion of a retired, top-notch PAL pilot now employed as one of the senior executives of a competitor in the region.

The executive, who refused to be identified, said the strategic value of PAL is now in jeopardy with demands that its private owners be left alone to solve their own problems. On the other hand, government, in its efforts to save the airline, is invoking national patrimony because PAL is the national flag carrier.

The executive said  that notwithstanding  its substantial shares in PAL, the government may have ceded the management to majority owner Lucio Tan but it cannot remain complacent over matters involving economic dislocation, disruption of regional and domestic business, isolation of key island provinces and cities, and international embarrassment should the airline collapse.

“These are the compelling reasons why the Estrada administration is trying its best to help the ailing semi-government airline,” the airline executive said.

He said PAL is vital to the interest of the country, reason that only a “tactless” government would allow it to fail.

“Even beyond President Estrada, no Filipino leader will ever decide on letting PAL go down the drain because we’re all part of it. I was once a crewmember of it as the Asia’s first airline and I’m still very proud of it. I learned my present job because of my experience with PAL,” he stressed.

When asked why all president of the Philippines – from the time of Manuel Luis Quezon up to the present – intervene with the affairs of PAL, he said the explanation not only lies in the fact that government has a stake in the company but also in the Philippine Constitution and the airline’s executive franchise.

He cited Section 22 of PAL’s franchise that stipulated: “The grantee shall not, without the previous approval of the President of the Philippines, lease, transfer, grant the usufruct of, sell, or assign this franchise… nor merge with any other company or corporation.”

Apart from the inherent power of the President of the Philippines provided for in the Constitution, he explained that in the case of war, insurrection, domestic trouble, public calamity, or national emergency, as stipulated under Section 7 of franchise, The Philippine Government upon the order of the President shall have the right to take over and operate the equipment of the grantee, paying just compensation for such use or damages.