Closure Is Inevitable

Manila Standard
September 18, 1998

(Statement of the Management of Philippine Airlines announcing the closure of PAL.)

We are deeply saddened to announce that at midnight of Sept. 23, 1998, Philippine Airlines will close following the breakdown of negotiations between management and the labor unions in PAL to forge an acceptable arrangement to ensure continuing industrial peace.

Management has exhausted all efforts to keep the company operational pending the outcome of its negotiations with the labor unions.  Unfortunately, the insurmountable burden of continued losses has become too heavy for the company to bear.  With no fresh capital infusion, PAL cannot operate viably in the face of enormous losses amid the harsh business environment.

Management’s offer was aimed at guaranteeing long-term industrial peace and harmony in PAL, which is  key requirement for any rehabilitation plan to succeed.  PAL cannot move forward without all its stakeholders pulling together.

We apologize to the riding public and to all those affected by the airline’s closure.  We appreciate your understanding and patience during this difficult period.  Closure is inevitable because this is the only way to preserve the company’s assets to ensure their orderly liquidation and disposition to creditors and other claimants.  We urge our riding public to make the necessary alternative travel arrangements.

It is not easy to preside over the demise of a great Filipino institution that has been a partner in nation-building for over half a century.  Sadly, our sincere efforts to keep PAL flying and serve the riding public have not been matched by a similar commitment from our employees' unions.

Again, we thank you for the opportunity to serve the nation and the Filipino people.