Philippine Daily Inquirer
Sunday, January 3, 1999
FREE FALLING in severe turbulence all year, Philippine Airlines came close to crashing. Hobbled by labor problems and the Asian financial crisis, the national flag carrier struggled all year to stay in the air. But for a few days in late September and early October, the national flag carrier and Asia’s first airline disappeared from Philippine skies for the first time since its founding in 1941.
Its beleaguered captain , majority owner Lucio Tan, decided to close the financially troubled airline after firing more than 600 striking pilots and failing to get ground crew union to accept a survival package.
Competitors, including Hong Kong-based Cathay Pacific, took over PAL’s routes with gusto, but they simply could not fill the void left by PAL as the primary domestic carrier of people, mail, newspaper and goods. Allied industries, like hotel, travel and tourism, were on the verge of collapse.
The union reversed itself and grudgingly accepted the offer, which included owning 20 percent of the airline, only after President Estrada stopped into the negotiation. That allowed the airline to fly again.
Tan, after six years of what he considered a hostile government under then President Fidel Ramos, finally found an ally in Malacañang—Mr. Estrada.
But potential foreign investors—Cathay Pacific and Northwest Airlines—failed to reach agreement with PAL for a partnership.
By year’s end, PAL was in a situation worse than when the year started, its fate still very much up in the turbulent air.
