PAL seen to fully recover in 5 yrs

Philippine Airlines (PAL) will be completely rehabilitated in five years, about half the time originally scheduled, PAL chairman Lucio Tan said yesterday.

Tan said the airline, on the first of a 10-year rehabilitation plan approved by the Securities and Exchange Commission (SEC), could get out of the plan in five years after exceeding the first year's targets.

"We even have a good chance of ending our fiscal year on March 31 with a better-than-expected financial result," Tan was quoted as telling PAL employees in a speech.

He did not give specific projections for PAL's five-year performance.

The rehabilitation plan for PAL was approved after the debt-ridden airline narrowly avoided bankruptcy.

Asia's oldest airline, PAL has been in the red for at least six years and is saddled with a $2.24-billion debt.

It earlier announced that in January and December it had exceeded its net profit targets under the reabilitation plan.

Company president Avelino Zapanta said PAL was shooting for a break-even or a minimal loss in its financial position at the end of the fiscal year, better then the $16.4-million net loss projected under the rehabilitation plan.

Zapanta said PAL would have posted a P500-million net profit if not for the sharp rise in the price of aviation fuel in recent months.

Claim of Japanese firm 'a lie' -- Mison

Lt. Gen. Salvador Mison (Ret.), group president of the Lucio Tan Group of Companies branded as a blatant lie yesterday the claims of a Japanese executive that Philippine Airlines (PAL) chairman Lucio Tan is preventing the operation of an air cargo company.

The Civil Aeronautics Board (CAB) also strongly denied that Tan is interfering in the country's aviation policies, stressing that the failure of CLA Air Transport to launch cargo flights between Japan and the Philippines was of its own making.

"It's a lie. CLA cannot start operation because it has violated the Constitution and the CAB charter," Mison stressed.

He was reacting to statements of IASS Co. Ltd. president and chief executive officer Soen Chiyokawa blaming Tan for CLA's travails.

Mison said to date, CLA remains a "paper" airline. "It has no airplane, no pilot and has never flown in the entire 12 months it was allowed to operate," Mison said.

IASS Co. Ltd. is part owner of CLA, a Filipino-Japanese joint venture engaged in cargo transport. Its Filipino partners are Philippine Aerospace Development Corp. (PADC) and International Business Aviation Services Philippines Inc. (IBAS).

Documents on CLA showed, however, that it violated Article XII, Section 11 of the 1987 Constitution, which mandates a 60 percent minimum Filipino ownership in public utility firms.

The Department of Justice (DOJ) no less issued a ruling on Feb. 18, 1999 declaring that CLA Air Transport had violated the foreign ownership provision in the Constitution.