BANYAN urges gov't takeover of PAL, assails de-nationalization of airline industry

BANYAN news release, 28 September 1998

The Bagong Alyansang Makabayan today said the Estrada government should immediately take control over the Philippine Airlines to save it from further ruin and to protect the interests of PAL employees who are being sold out by some of their union leaders.

BAYAN also assailed government for using PAL's closure as a ground to de-nationalize the airline industry, with the entry of Cathay Pacific as a first step.

President Estrada should not give Lucio Tan control over PAL's operations again, said Nathanael Santiago, BAYAN Secretary General. In the interest of the workers, the economy, and the general public, government should immediately take over PAL, he said.

BAYAN shared the view of labor groups like the Kilusang Mayo Uno (KMU) that the recent move of some PALEA officers to accept Tan's demand for a 10-year CBA moratorium was a sellout of the workers' rights. The workers can compromise on their economic demands, but should stand pat on their right to collective bargaining and job security.

BAYAN assailed the compromise agreement concocted over the weekend by some PALEA leaders led by its president Alex Barrientos. Santiago said it automatically fires employees who reject Tan's unfair demands.

Even then, Tan is holding our economy hostage by refusing the union's compromise offer and failing to respond immediately, said Santiago. That's because the Estrada Administration is giving him the power to do so, he added. The group said the Labor Department should stop waiting for Tan's response on the union's recent offer and decisively take over PAL.

According to the group, even international financial analysts agree that the main reason for PAL's closure was its huge losses and billion-dollar debt incurred through Tan's unsound business practices. Should we allow a crook to run the country's flag carrier again? said Santiago.

BAYAN also warned that the government's airplane lease scheme with Cathay Pacific signals the leap towards the accelerated deregulation of the airline industry. After privatization's dismal failure, the government is now experimenting with airline deregulation and liberalization, he said.

Instead of helping the local airline industry, Estrada has allowed the entry of foreign firms to the extent of skirting existing laws, said Santiago. The Hong Kong-based airline is able to fly domestic routes through a lease-agreement with PNB Holdings, a subsidiary of the government-controlled Philippine National Bank.

The government can take over PAL without exposing the government to further financial losses. According to Santiago, the administration can devise measures for government to control PAL's operations without infusing capital. Estrada did not explore the legal options which will permit government to take over PAL. He was simply more inclined to legitimize liberalization and farm out profits to foreign investors instead of ensuring employment, he said.