Gobyerno, Sasaluhin ang PAL

Kabayan

Sabado, Disyembre 5, 1998

AAYUDAHAN ng gobyerno ang Philippine Airlines (PAL) sa pamamagitan ng mga government financial institution (GFI) kung sakaling walang banyagang mamumuhunan na magkainteres magpasok ng kapital para sa rehabilitasyon ng flag carrier ng bansa.

Sinabi ni Executive Secretary Ronaldo Zamora na ang pagpasok ng pamahalaan sa PAL ay isang hakbang na makabubuti hindi lamang para sa interes ng mga manlalakbay at para mapro­tektahan ng gobyerno ang natiti­rang investment nito sa PAL.

“If there are no foreign investors, I think it is also to the interest of the government not just to protect the flying public but also to protect its own investment in PAL, to help out in this investment,” ani Zamora.

Pinaalala ni Zamora na ang plano ay seryoso nang pinag-­iisipan noon pa man ng Pangulong Estrada.

Ayon sa kanya, wala siyang nakikitang hadlang sa pagpapautang ng mga GFI sa PAL basta’t ang nasabing kompanya ng eroplano ay may sapat na “collateral” sa halagang uutangin.

Sinabi rin ni Zamora, ang katatagang ipinakita ng PAL sa loob ng ilang buwang operasyon nito na walang ayuda mula sa ibang mga mamumuhunan.

“Very clearly in the last few months, PAL has been flying without any foreign investors. Which is why the credibility of a Tan loan, rehabilitation and investment plan may in fact be worthwhile considering,” paliwa­nag ni Zamora.

Sinabi pa niya na ang Pangulo ay nanatiling matatag sa kanyang paniniwala na nanatiling bukas ang pintuan ng Cathay Pacific para sa isang negosasyon sa PAL.

“In fact, he (Estrada) thinks that all of these is just a whole lot of stress in a negotiation like this," ani Zamora.

Ipinaliwanag rin ni Zamora na ang isang negosasyon ay may antas nang tinatawag na “give and take” at sa kaso ng PAL, anya, mukhang lumalabas na, "There is not enough ‘give’ on the part of the foreign investors,” kung kaya’t pinag-iisipan nito ang paghimok sa mga lokal na mamumuhunan.

Ngunit, ang binitiwang salita ni Zamora ay taliwas sa mga naging pahayag ng Pangulo noong kamaka­Iawa lamang.

Sa isang panayam na ginagawa ng mga mamamahayag sa kanyang bahay sa Greenhills noong Miyer­kules, mariing sinabi ng Pangulo na hindi maaaring tumulong ang gobyerno sa rehabilitasyon ng PAL dahil ito ay walang sapat na salapi.

“No, the government has no money, the government will not guarantee any private firm or any kind of…,” anang Pangulo.

Binanggit rin ng Pangulo na may sulat sa kanya ang Cathay na nagpapahayag na bukas ang pinto nito sa isang negosasyon sa PAL. William B. Depasupil

KMU, Bayan Hit PAL Rehab Plan

Philippine Daily Inquirer

Saturday, December 5, 1998

By Dona Pazzibugan

AT LEAST 3,000 employees of Philippine Airlines' 8,500 workforce will be laid off under the rehabilitation plan prepared by the PAL management, a militant labor group said yesterday.

Aside from the mass layoff, the management allegedly also plans to reduce the number of PAL routes in order to keep the debt-ridden flag carrier flying.

"President Estrada and (PAL majority owner) Lucio Tan were lying through their teeth when they said the retrenchments in PAL will stop. Now, a minimum of 3,000 workers are in the line of fire,” the Kilusang Mayo Uno said.

Both the KMU and the Bagong Alyansang Makabayan (Bayan) expressed opposition to the PAL rehabilitation plan due to be submitted to the Securities and Exchange Commission on Monday.

The PAL workforce had been cut down from 13,000 in June to 8,500—the biggest layoff since the start of the Asian economic crisis in 1997—because of mounting debts and a crippling pilots’ strike.

KMU and Bayan, in a joint statement, disclosed PAL’s 25-point rehabilitation plan, which they said included fleet reduction, disposal of assets, route restructuring, layoff of personnel, and outsourcing of airline functions.

The plan also calls for the "reeducation and re-assignment of PAL personnel," they said.

They suggested that the government consider a takeover of PAL.

“The government should save itself the trouble of looking for a buyer for PAL. It should infuse money into the national flag carrier,” the militant groups said.

“If the government is serious and sincere in its intentions to revive PAL, not only for the sake of the riding public but also of the PAL workers, then it should take over PAL instead of turning it over to Cathay, Northwest or any other foreign company who only seeks greater profit."

PAL Studying Stand-Alone Plan

Philippine Daily Inquirer

Saturday, December 5,1998

By JULIET LABOG-JAVELLANA AND DORIS C. DUMLAO

Executive Secretary RonaIdo Zamora yesterday said the management of Philippine Airlines was seriously considering a "stand-alone rehabilitation plan in light of the failed negotiations with Cathay Pacific Airways and Northwest Airlines.

President Estrada, however, is yet unaware of the plan.

"I have not talked to the management of PAL. I will have a meeting with [PAL majority owner Lucio Tan] on Sunday. That's the only time I will know [the long and short of it].''

But well-placed government sources said the Hong Kong-based Cathay Pacific had resumed talks with PAL upon Mr. Estrada's urging.

The sources said Cathay had agreed to withdraw its demand for a retrenchment program beyond what was agreed upon between Tan and the PAL employees.

During a luncheon held for his birthday. Zamora noted that PAL had had discussions with the two foreign airlines. "Unfortunately, these talks have not succeeded, so the management of PAL is now looking toward the possibility of presenting a stand-alone rehabilitation plan," he said.

Zamora said PAL management was so confident about the plan that it did not even ask for an extension of the Dec. 7 deadline creditors had set for the airline to submit a rehabilitation proposal to the Securities and Exchange Commission.

He said that during a meeting between PAL creditors and government and PAL representatives Thursday night, the creditors did not say that the airline's debts would become due if it failed to secure a foreign partner.

"So it is possible that in the end, PAL will be rehabilitated by a stand-alone all-Filipino investor group," he said.

The stand-alone plan calls for government financial institutions to open a credit line for PAL to keep it flying.

"You remember at one point, the President was considering the possibility of (GFIs) opening a credit line to PAL, provided there is sufficient collateral. I don't see why we cannot do this right now," Zamora said.

He said the plan was "worth considering" because PAL had managed to keep flying without the help of any foreign investor.

“There is no doubt that PAL is in the red,” Zamora said. "It is in the red by tens of billions of pesos, but in the end, discussions with foreign investors require a certain amount of give and take.

"And I think what has happened here is that the management fears there is not enough giving on the part of foreign investors."

Zamora said he was not aware of the letter which Mr. Estrada claimed to have received from Cathay management.

The President said the airline had expressed readiness to enter into another round of negotiations with PAL.

"I don't know of any particular letter, but clearly the President was referring to many instances when Cathay expressed its interest in rehabilitating PAL,” Zamora said.

But the sources said talks had resumed between PAL and Cathay "because the labor issue has been resolved."

The only thing they're threshing out now is the transfer of management control," the sources said. "Hopefully they'll arrive at something over the weekend."

The government is a minority shareholder in the national flag carrier which is controlled by Tan. PAL shut down operations for 13 days in September under the weight of a $2.1-billion debt. It apparently flew into new turbulence when Cathay said Wednesday it had broken off negotiations over disagreement on management control and valuation issues.

The airline had earlier been interested to acquire up to 40 percent of PAL. With an AFP report.

Sabotaging Air Safety

Malaya

Saturday, December 5, 1998

By J. A. DE LA CRUZ

THE net effect of a vicious media campaign against implementation of the existing contract with the UK firm GEC-Marconi for the supply and installation of a 3D radar system is to open up the Estrada administration to potential suits and, more importantly, make our skies even more dangerous for air travel than they already are.

All the loose talk about this transaction having been undertaken under less than salutary circumstances is just that: loose talk. While it is true that then President Ramos decided to hold in abeyance the implementation of the approved contract pending the results of a Senate investigation, the contract remains in full force three years after its signing. Thus, when top UK officials called on President Estrada to inquire why the contract remains unimplemented he was left with only two choices: to accept it with improvements or set it aside altogether.

The DOTC has recommended implementation of the 1993 contract on three grounds: a) urgent and critical considerations of air safety; b) the concept of joint use of the system by the DOTC and the DND was superior to other proposals and remains a viable option and c) the funding arrangement for the contract which boasts of a very attractive loan package and recoverability of investments over a limited period of time is advantageous to the government. The latter consideration is vital to this project for without such a funding proviso the more learned expositors to the project claim that the contract entered into by the Ramos administration was void from the very beginning. The DOTC claims that the bulk of the US$133-million GEC-Marconi contract, 85 percent to be exact, will be funded out of the proceeds of a loan which the government also contracted in 1995 with another UK company, Midland Bank Public Limited at the highly preferential interest rated 5.95 percent per annum. In addition, GEC-Marconi stipulated under its contract to recover for the country no less than US$30 million per annum for so-called overflight fees from aircraft using RP air space which has not been captured due to our lack of a 3D system. In other words, this project is self- liquidating and will in fact provide positive cash flow in foreign exchange for our treasury upon the payment of the loans.

It would be downright stupid to delay its implementation just because some self-interested groups which include other suppliers have been busy fanning the fires.

One such supplier, a French company which had been tapped earlier to provide a radar system which sources say remains in crates in some warehouse somewhere, has been busy peddling tales of overpricing, over-design and the like. The inability to produce a coherent and well studied opposition to this critical undertaking is at the heart of the viciousness which has attended the contention of the DOTC and the Chief Presidential Legal Counsel in their latest report to the President that the deal is not only advantageous to the government but is actually still legally in effect.

If, as the expositors say, they are concerned about the legality, reasonableness and uprightness of the contract, they should start debunking the merits of the project.

It is time the Civil Aeronautics’ Board (CAB) put its foot down on this intransigent paper airline called CLA Air Transport. This company which is supposed to be a 51-49 joint venture between Filipino and Japanese investors which includes the government-owned PADC was able to wangle a number of extraordinary privileges and some provisional authorities to operate as an all-cargo airline in the last days of the Ramos administration. Lately, it has gone to town challenging the CAB and demanding via steaming full page paid advertisements that it be rewarded authorities and privileges which were earlier issued on a provisional and conditional basis. What gall. After failing for months to show proof of its ability to implement its earlier approved provisional authority to operate as an all cargo, it now has the temerity to demand "kid glove" treatment from the CAB.

Instead of succumbing to this blackmail, the CAB should immediately ask the company to desist from making a fool out of itself in public and start working on its provisional authority. There is just no way that the procedures can be cut or dispensed with, especially under this administration. If the CLA people think they are still working as if they own the world like the old Ramos days they have another think coming. They can no longer bamboozle people around and strut their wares as if they can fly an airline just by invoking the name of Malacañang big shots.

For a start, why doesn't CLA gets its first flight off the ground? That way they can show the CAB that they are for real. Otherwise, they should banish all thoughts about getting their way just because they have the money to come out with full page ads.

Saving Philippine Airlines

Tonight

Saturday, December 5, 1998

Editorial

EFFORTS to keep the Philippine Airlines (PAL) from going under is commendable when one considers the increasing volume of air traffic on this side of the Pacific and the prestige that goes with having a flag carrier of our own.

President Estrada himself is hopeful that PAL and Cathay Pacific will resume merger negotiations, which broke off owing to a number of differences.

"I am not giving up," the President declared as he disclosed that Cathay wrote him a letter, seeking an audience with him.

At the same time, Finance Secretary Edgardo Espiritu disclosed that there are other foreign and local groups willing to invest in PAL.

Even so, he added, the group of Lucio Tan, which owns 70 percent of PAL, had expressed willingness to put up the P6 billion capital infusion needed to bring PAL back on its feet.

Similarly, Congress is considering a bailout package for PAL, including a $450-million guarantee to unsecured creditors of the ailing airline.

Also in the works is a proposal in Congress for a government takeover of PAL in case other options fail.

On the part of Tan's group, it was reported that it is ready to infuse $100 million or P4 billion in fresh capitals to rehabilitate PAL, an indication that all is not lost.

To prove this point, the PAL board said the flag carrier will submit on Monday its rehabilitation plan to the Securities and Exchange Commission, with or without Cathay.

All this shows that all efforts are being undertaken to save the country's flag carrier.

In the face of all these difficulties, government authorities are loath to relinquish the country's air space to foreign airlines and turn over to them the increasing volume of traffic in the Pacific route.

The government was correct in turning over control of the flag carrier to the private sector.

Allowing it to close down for lack of government support is another matter.

It must not be allowed to happen.