Non-existent airline

Malaya
Wednesday, September 3, 1998
Ducky Paredes

What were they up to? We are asking about Panfilo Villaruel, former military, who was with the Air Transport Office (ATO) in the Ramos administration; Leopoldo Acot, former commanding general of the Philippine Air Force; and Josefina Lichauco, long-time transportation undersecretary who finally made secretary in the Ramos government.
The two former military men, together with some foreign interests, put up CLA Air Transport, Inc. Forty-nine percent of CLA was owned by IASS Company, Ltd. of Japan. The balance was held by local firms: Philippine Aerospace Development Corp. (PADC) and International Business Aviation Services Philippines, Inc. (IBAS), and Villaruel and Acot, as individuals.
In its filing with the Securities and Exchange Commission, it turns out that while IASS has only 49 percent of the subscribed shares, in terms of paid-up capital; IASS had put up 81.57 percent of the money. This would lead to the suspicion that the Filipinos and the Filipino companies they represent are actually only dummies of the Japanese.
What was the point of putting this company together? Certainly, as organized, it could do no airline business locally since the Constitution mandates in Article 12, Section 11: "No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens... The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines."
In fact, if it were organized to do any honest airline business, it is doubtful that the two local firms that invested in it, PADC and IBAS, have the wherewithal to get the airline going since PADC, at least, exists only on the largesse of a generous government.
So, with the situation being such, why did Lichauco, on March 9, 1998, in the dying days of the Ramos administration, grant a temporary operating permit to CLA, something that she was not allowed to do by the Constitution? Not only that, when six slots opened in Japan for flights to Cebu, she gave CLA the slots by designating the CLA, an airline with not a single plane, as a "national carrier" of the Philippines?
What was the point of that? Certainly, CLA was in no position to take advantage of the lucrative Japan to Mactan line. The first thing that one needs to take advantage of any flight opening is to have an airplane. Without an airplane, one cannot fly. Philippine Airlines (PAL), on the other hand, together with other local airlines, are always looking for new and additional flights.
In fact, PAL complains that in the Ramos administration, for the first time in any prior government, the national carriers have been discriminated against by granting too many incoming flights to foreign airlines without getting reciprocal landing rights in these countries for Philippine carriers.
For instance, in the Manila-Singapore route, PAL flies one airplane with a capacity of less than two hundred while Singapore flies four flights with a total capacity of 1,200 passengers. Singapore is still applying for two more flights which the country, under Ramos, was in the process of allowing. As for PAL getting more flights to Singapore, forget it.
So, what were Villaruel, Acot and Lichauco up to?
Currently, the National Bureau of Investigation's Anti-Fraud and Computer Crimes Division is looking into it.@