They Said No

Manila Standard
Monday, September 21, 1998
OPINION

ASIA’S first airline is Asia's first airline to go. And the regional crisis had nothing to do with it. What a shame. A flag without a carrier, the emblem of a sun without a sunrise.    

The sunset of Philippine Airlines is the death of one man's impossible dream. Lucio Tan will have a hard time living it down. His first failure will probably be his last attempt to show that guts alone with plenty of cash to back it up are not enough.

A government takeover of PAL? It's the last thing government needs and the last thing an airline wants. The benighted souls suggesting it do not seem to know that what ran PAL to the ground was the corporate culture that made it no different from a government bureau where efficiency is sacrificed for political expediency. As soon as people were hired they were untouchable, for as soon as they were hired they thought they owned the company.

But if they felt that way they should at least have treated it like a priceless possession, investing time and thoughtfulness, discipline and professionalism to keep it running smoothly. What happened to PAL is the culmination of generations of union leadership with an attitude.

…

Not that everyone who is a union member knows what their leaders are doing or, if they do, approves. Could this be why the union heads do not want a referendum as endorsed by President Estrada so that the true sentiments of the airline's 9,000  employees will not be expressed?

The interagency task force under Finance Secretary Ed Espiritu met recently to discuss how such a referendum might be conducted, since the one stumbling block left to be overcome in the rehabilitation program packaged for PAL was nothing more than an assurance of industrial peace and rank-and-file cooperation with management.

The balloting was to be secret. The form and format were drawn up. Everything in the name of democratic choice was ready.

Then the unions said no.

Their leaders did not want their followers to exercise their right of choice. These are the very people who have been paid by their members' union dues and fees to look after their welfare.

"Ayaw nila, e, " Lucio Tan told reporters immediately after the news was announced that he was shutting down the airline. Ayaw nila. No to three board seats. No to 60,000 shares of stock (at P5 per before the announcement) for each employee on the active payroll. No to suspension of the CBA for 10 years. No to the following in place of the CBA: medical benefits, one of the most extensive in terms of coverage, to continue; salary increases to depend on merit and performance, but definitely no salary deductions.

The Chairman wanted the minimum provisions of the labor code to take the place of a CBA. The association of flight stewards and attendants wanted the standards of the Federal Aviation Regulation Board of the United States which is very strict on the number of flying hours

Without a union, pilots fly 80 hours every month. With a union, they fly 40 hours. PAL's 200 pilots (flying 19 planes) are working without a CBA since they left their ALPAP union to return to work. In other words, they're earning more money now — until Sept. 23, that is.

…

The same ALPAP pilots who have stuck to their guns, refusing the chairman's offer to come back when a deadline was set last June are accusing PAL management of making the wrong decision to reflect — buy more planes, fly more routes — as if it was not an airline's business to fly more people to more places!

How can a chief succeed within a tribe such as PAL's?

The wonder of it all is how Lucio Tan, who has sunk in P15 billion of his own money and presided over the loss of P8.8 billion over the last three months, has lasted this long. He should have thrown in the towel earlier and expect to keep his money, make more profits elsewhere, and live a happier life.

His refusal to be cowed by a handful of people with a puzzling agenda was seen as weakness. Well, now they've finally pushed him to the wall and all he can tell his executives is to get ready to pay his employees P2 billion in separation pay.

PAL wants Marcos tax perks revived

The Manila Times
Monday, September 14, 1998
BUSINESS
By Jun T. Ebias

PHILIPPINE Airlines (PAL), the country's ailing flag carrier, has asked the Estrada administration to help get the airline back on its feet by reviving PAL’s Marcos-era tax perks and removing alleged undue concessions granted by the government to its competitors.

Department of Finance (DoF) Undersecretary Solomon Cua said PAL's requests represent two of five main issues raised by airline officials before an inter¬agency government task force organized earlier to help reverse PAL's dismal operations.

But Cua disclosed PAL's request just days after the government made a commitment before the International Monetary Fund (IMF) to further plug loopholes in its fiscal incentives regime for investors so it can reduce a yawning budget deficit expected this year and in 1999.

Cua said PAL'S fiscal incentives, which include various tax and duty exemptions for its importation, were decreed by the late president Marcos. But the succeeding Aquino and Ramos administrations discontinued them, he said.

PAL is now controlled by controversial taipan Lucio Tan, a suspected Marcos crony who did not enjoy any political clout under the Aquino and Ramos governments. Tan, however, is said to maintain close ties with Estrada.

Cua said the Estrada administration is now asking the Department of Justice for an opinion as to the validity of Presidential Decree No. (PD) 1590, the Marcos law that provided PAL with its own tax incentive package. Marcos issued this decree while Tan did not yet control PAL.

"We are requesting the Department of Justice to come up with a legal opinion on this (or the validity of PD 1590)," Cua said.

Aside from PD 1590, PAL raised four other issues affecting its operations. The issues revolve around government's operating permits to other foreign air carriers; its air pact agreements with other countries; its open skies policy; and the adequacy of the country's airport infrastructure facilities.

Cua said PAL wants a review of government's policy regarding all these other issues. PAL often airs its concern over the adverse effects of these government policies on its operations.

PAL lost P8.08 billion during its fiscal year ending March 1998, or way above the P2.5 billion net loss it incurred during the previous fiscal year, mainly because of a global slump in the airline industry

To aggravate matters, its workers, along with its pilots, staged a debilitating strike early this year. The firm allegedly lost P200 million a day during the strike, prompting Estrada to form the DoF-led task force on PAL.

Cua said PAL is asking the government to review the temporary operating permits that it earlier granted to foreign air carriers. PAL also wants its rivals to service the country's "missionary routes," or non-lucrative destinations.

Cua said the task force is trying to address this problem through a proposal, dividing the missionary routes among the airline firms.

PAL wants the country's air agreements with other countries renegotiated, and government's open air policy reviewed to level the playing field," Cua said.

Cua added the task force is trying to address these concerns, but he stressed "we are not trying to be a protectionist. We just want. to work within the confines of liberalization."

In exchange for a favorable government action PAL promised to make its employees part-owners of the company by giving them 60,000 fully-paid shares. These will give the worker three seats in PAL's nine-man board. Beneficiaries of the stock offer are employees in active payroll as of September 15, 1998.

PAL Interclub Golf Championship

Philippine Daily Inquirer – Inquirer Golf Monthly
September 1998
Al S. Mendoza
True Grip

February is still a good six months away but already, the nation's amateur golfers are worried sick that the PAL Interclub Golf Championship won't be staged again in February 1999.

If that should happen at all, that'd be a big blow to Philippine golf.

The PAL Interclub has become an institution for the last 52 years that scrapping it now would mean killing a cherished tradition.

I love history. I love tradition. The PAL Interclub has both—and more. In fact, the PAL Interclub is unofficially known as the country's National Team Golf Championship.

It is my prayer that the PAL moguls seriously think about the implications of a PAL Interclub not being seen again in 1999. For that'd be a crime as abominable as seeing Erap suddenly losing his cool and deciding suddenly to leave Malacañang -- for good.

That wouldn't be fun at all.@

Erap Wears Heart on His Sleeve

The Journal

September, 1998 

Just This Once

By Alfredo G. Rosario

The President has his hands full dealing with the pressing problems of the nation. The latest of these, of course is the decision of the Philippine Airlines to close down. Notwithstanding the standoff between the PAL management and the employees union, the President has been making personal last-ditch efforts to resolve the labor dispute.

He may not succeed but he has demonstrated his real concern for the workers who will lose their jobs and go hungry.