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Joined: Sun May 13, 2001 4:35 pm

Philippine Govt. Wants To Take Over PAL Completely

Sun Jun 02, 2002 12:59 am

The president of the Philippines, Gloria Macapaga-Arroyo wants the Philippine government to take over Philippine Airlines, the country's flag carrier from the Chinese-owned Lucio Tan, who is the current majority owner of the airline. I think this will be great news and will certainly improve the staus and possible expansion of PAL, IMO. If acquired, I don't think the Philippine government will allow PAL to falter like Tan did a few years back. Since ownership will be closer to the Philippines and will be more representative of the country, national pride for the airline will rise significantly and will take away from corporate greed-type decisions currently being made. As a result, I look forward to better management.

Here is the article, in case the link doesn't work. Taken from the Boston Globe

Arroyo considers retaking control of Philippine Airlines
By Associated Press, 5/30/2002 08:47
MANILA, Philippines (Dow Jones/AP) President Gloria Macapagal Arroyo said Thursday the government may retake a controlling stake in flag carrier Philippine Airlines, currently majority owned by businessman Lucio Tan.

Arroyo told a Southeast Asian trade forum the move would help the government liberalize the airline industry and promote tourism.

''I am exploring the idea of doing a PNB on Philippine Airlines,'' Arroyo said, referring to the government's recent moves to increase its stake in Philippine National Bank where Tan is also a major shareholder.

Arroyo said she will ask Finance Secretary Jose Isidro Camacho, who led negotiations with Tan on the bank's new shareholder structure, to study the plan.

Tan was not immediately available for comment. Airline spokesman Rolando Estabillo said the airline still has to assess the plan.

Acting Press Secretary Silvestre Afable said Arroyo's statement wasn't a hostile act against Tan, a businessman who had close ties with ousted President Joseph Estrada.

''There's no intention to telegraph any firm policy in this statement,'' he added. ''We do not even know yet where the money will come from.''

Arroyo said the flag carriers of Malaysia and Thailand play key roles in the success of the tourism industry of both countries.

''I want to use Philippine Airlines as a tool of government policy and not just another enterprise to which we give a good business operating environment,'' she said.

Her comments suggest the government is willing to absorb the airline's losses to achieve gains in tourism and other sectors.

Philippine tourism has been lagging behind its neighbors. The country is attracting far fewer visitors than many of its neighbors, especially Thailand.

Asia's oldest commercial airline founded in 1941, PAL was a privately held company until 1977 when state pension funds took control. Government relinquished control in 1992 after selling a 67 percent stake in a privatization program that eventually led to Tan taking a majority stake.

The government currently has a 4.3 percent stake in PAL.

Its better to be on the ground wishing you were in the air than be in the air wishing you were on the ground. Fly safe!

RE: Philippine Govt. Wants To Take Over PAL Completely

Sun Jun 02, 2002 12:03 pm

Sounds Like Good News Trickijedi. Hopefully This Will Increase Tourism To The Country And Help The Carrier To be More Successful like in the glory years of 1970s

 Smile/happy/getting dizzy
Posts: 835
Joined: Fri May 05, 2000 2:08 am

RE: Philippine Govt. Wants To Take Over PAL Completely

Sun Jun 02, 2002 3:29 pm

A couple of problems I have with this situation:

1) How can government control of an airline "liberalize" the airline industry? Isn't that an oxymoron?

2) How does Ms. Macapagal-Arroyo plan to prevent PR from becoming just another tool for cronies to abuse the way Imelda did with the old PR?

3) How can an airline operating without profits (and almost certainly bloated with excess employees the way most state carriers are) make the country a good destination for tourists?

The Philippines has much larger problems than just a bad national airline. The government shouldn't waste money on PR when cheap fares to the Philippines still won't get people to go there. The only thing that will get people to the Philippines is dead terrorists and competent security. For Christ's sake, the government has a battalion of troops on Basilan which still can't find 20-30 Abu Sayyaf guerillas. At one point, they had them cornered in a hospital and still the guerillas managed to escape.

Here's a tip, Gloria: Make the Philippines, especially Manila, less of a corrupt, humid, tropical hellhole. Improve the infrastructure and government institutions. Then the tourists will come. I've been there six times and each trip has been far, far too long. I'm damn happy my parents left that place to come to America.

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