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PAL gets OK to replace 600 pilots
By Armand Nocum
Published June 10, 1998 - Philippine Daily Inquirer

ABOUT 600 striking Philippine Airlines pilots defied a new government deadline to return to work Tuesday despite a warning by the labor secretary he would authorize the troubled airline to hire replacements.

''Nobody has walked in,'' an airline spokesman said nearly an hour after the 6 p.m. deadline set by the labor department lapsed.

Labor Secretary Cresenciano Trajano said the strikers ''were now deemed to have abandoned their jobs, thus allowing management to hire replacements.''

Officials of the Airlines Pilots Association of the Philippines (Alpap), who had vowed to continue their strike to the bitter end, were meeting Tuesday evening. They could not be contacted for comment.

Capt. Florencio Umali, Alpap spokesperson, earlier said the union received Trajano's return-to-work order only yesterday morning.

PAL president Jose Antonio Garcia said the cash-strapped airline had agreed to take the strikers back if they complied with the Tuesday deadline. On Sunday it had fired all the striking pilots, calling their action illegal.

Garcia said the 4-day-old strike had caused several potential foreign buyers of the airline, including Northwest Airlines, to break off talks and could force the airline to shut down. (Related story at the Business section)

''Closing PAL is an option. If there are no pilots and operations, what work can we do?'' Garcia said to reporters after attending an emergency meeting of the PAL board of directors called to discuss the strike.

The union began the strike Friday night to protest a new management policy of ordering pilots to retire who have reached 20 years of service or flown 20,000 hours, regardless of age. The policy puts about 200 pilots in danger of forced retirement, the union said.

PAL, however, said it was not a unilateral management policy but a provision in a collective bargaining agreement signed by airline and union officials.

The airline earlier announced plans to reduce staff, slash costs and cut flights to survive a financial crisis.

Brink of insolvency
The strike, which has forced the cancellations of most international and domestic flights, has caused daily losses of P150 million to P200 million in lost revenue, pushing PAL ''closer to the brink of insolvency,'' airline officials said.

PAL said Monday it had lost P8 billion pesos in the last fiscal year--three times more than the previous year. PAL tried to recover from its spiralling losses with an ambitious $4-billion modernization program in 1996, ordering 36 new aircraft.

But Asia's currency crisis sharply reduced passenger numbers and bloated the airline's debt in local currency terms, forcing it to delay many of the orders.

Garcia said PAL had notified its creditor banks of the strike, but added the airline was not yet seeking debt relief.

Ramos appeal
Earlier Tuesday, President Ramos urged the striking pilots to return to work, saying the disruption of PAL operations was an embarrassment to the government.

''It is the hardening of the positions which I deplore,'' Mr. Ramos told reporters.

He warned the dispute, which had stranded thousands of passengers here and abroad, ''could go on forever unless they (sit) down at the negotiating table.''

''But first, everybody must comply with the return to work order'' issued by the labor department, he added.

Mr. Ramos said the strike ''has negative implications on our international image,'' while also working to erode the value of the government's minority 33 percent stake in the airline, now controlled by tobacco and beer tycoon Lucio Tan.

Mr. Ramos said he sucessfully mediated a similar dispute involving the PAL ground crew during a 1996 strike because both sides were then willing to accommodate each other and ''therefore there was a chance of doing this by just persuasion and cooperation.''

''But now it appears that the issues have been put forth in such a very difficult situation so that it will now need an agency mandated by the law which is the (labor department) plus its subsidiaries to work out a solution.''

Labor Secretary Trajano was forced to delay his departure for an International Labor Organization conference in Geneva on Monday so he could give ''priority to this very important mission'' of resolving the PAL dispute, Ramos said.

PAL, Asia's first airline, had been completely owned by the Philippine government from 1941 until it was partly sold in 1992. Reports by Nelson Flores, Lynda T. Jumilla, and Inquirer wires

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