Manila Bulletin

Manila Bulletin

Wednesday, December 23, 1998

The strategic value of Philippine Airlines (PAL) is now in jeopardy with demands that its private owners be left alone to solve their own problems despite the backlash on the economy.

The government, in its efforts to save the airline, is invoking national patrimony because PAL is the national flag-carrier.

Some quarters believed that notwithstanding its substantial shares in PAL, the government might have ceded management control to the airline’s private owners but it cannot remain complacent over serious problems involving economic dislocation, disruption of regional and domestic businesses, isolation of key island provinces and cities and international embarrassment if the airline collapses.

These are the compelling reasons why the Estrada administration is trying its best to help the ailing semi-government airline, according to a retired PAL pilot now employed as one of the senior executives of a competitor in the region.

Requesting anonymity, he said in an interview that PAL is vital to the interest of the country.

“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 crew member of it as the Asia’s first airline and I’m still very proud of it. I earned my present job because of my experience with PAL,” he stressed.

When asked why all presidents of the Philippines – from Manuel Luis Quezon up to Joseph Estrada – intervened with the affairs of PAL, he explained that this is not only because the government has a stake in the company but also because it is mandated by the Constitution as well as the airline’s executive franchise.

He cited Section 22 of PAL’s franchise which provides; “The grantee shall not, without the previous approval of the President of the Philippines, lease, transfer, grant the usufruct of, sell, or assign the 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 case of war, insurrection, domestic trouble, public calamity, or national emergency, as provided for under Section 7 of the 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.

“In view of all the laws and strategic value of PAL, no way we can detach the President from the airline even if it were an entirely private company,” the former PAL pilot said.

He said that Philippine government had used PAL airplanes to evacuate thousands of overseas Filipino workers during the Gulf War in 1991 because no military aircraft was available for job.

Barely nine months in existence as a fledgling company founded by Andres Soriano Sr., Juan Elizalde, John Schultz, former Senator Ramon Fernandez and Ernesto von Kaufman, PAL, starting on Christmas Eve in 1941, evacuated American fighter pilots and other personnel to Australia, according to a history magazine of PAL.

On March 15, 1941, the airline’s first and only airplane, a twin-engine Beech Model 18, took off for its maiden flight from the Neilson Airport in Makati to Baguio City. In September, Soriano invited the Quezon’s government to invest in PAL and the National Development Corp, which later bought up 34 percent of the shares of stock of the company, the magazine stated.

Since then, until its semi-privatization in 1993, PAL has grown to where it is now – with a younger fleet in the region but with a debt of $2.1 billion and persisting labor problems – providing air services not only to domestic passengers but also to thousands of Balikbayans. PAL is also the carrier of international and local mails, newspapers and magazines, foodstuff like fish, meat and vegetables and other products and services requiring air travel, the retired PAL pilot noted.

“PAL has been providing the ‘wings’ for the nation to soar to greater heights. Let’s all join hands to rally behind it,” he said.