Air Philippines Head Hits Government ‘Bias’ For PAL

Philippine Daily Inquirer

Sunday, December 27, 1998

By Armand Nocum

AIR Philippines majority owner William Gatchalian has criticized the government for its alleged bias for Philippine Airlines.

Gatchalian is particularly unhappy about plans by the Estrada administration to use part of the country’s share of the Miyazawa fund to rehabilitate the troubled flag carrier.

Gatchalian, known to be a close friend of President Estrada who has named him presidential adviser on overseas Filipino workers’ affairs, said the government was serious in its plan to use the fund to help PAL, it should extend similar assistance to new players in the industry.

Japan established the $30 billion fund to help Asian countries combat the economic crisis besetting the region.

“We also deserve an incentive. If PAL is given part of the Miyazawa Fund, we should also have a part of it,” Gatchalian told reporters in an interview.

He said he would be happy even with a 10-percent share of the fund.

“The government appears to be biased toward PAL. There should be no monopoly in the airline industry,” he said.

But Rolando Estabillo, PAL Vice President for Corporate Communications, denied that Malacañang was leaning over backward for PAL.

“Gatchalian is entitled to his own opinion. We just wish him a merry Christmas and a happy New Year,” Estabillo told the INQUIRER.

EXECUTIVE Secretary Rolando Zamora and Finance Secretary Edgardo Espiritu had earlier suggested that part of the Miyazawa Fund earmarked for the Philippines be used to rehabilitate PAL following the collapse of the buyout talks between PAL and Hong Kong-based Cathay Pacific Airways.

But financial experts assailed the plan, saying it would send the “wrong signal” to the Japanese government, as PAL majority owner Lucio Tan is known to be close to Mr. Estrada.

Gatchalian said he wondered what it was about PAL that prompted the government to do everything it could to help keep it afloat.

“You can consider us a second flag carrier. What’s the difference?” he said.

Gatchalian also hit the Civil Aeronautics Board and the Air Transportation Office, which he said were made up mostly of former PAL pilots and executives.

He said the two agencies appeared to be conspiring to stunt the growth of new domestic airlines as these prepared to expand operations to include international travel.

Gatchalian said the two agencies had been quick to grant foreign carriers—including Singapore Airlines, Eva Air, China Air and Cathay Pacific—rights to fly to choice destinations, but were hesitant to do the same to new Filipino players.

“No wonder they now refer to the ATO as ‘Another Tan Office,’” he said.

Air Philippines and Cebu Pacific are firming up plans to go international to improve their financial and corporate standings.

Gatchalian said new Filipino airlines should be allowed to fly profitable routes abroad, such as the Taipei, Singapore, Osaka, Tokyo, Seoul and US routes, to help them grow and expand.