L.I.A. may lose franchise

Laoag International Airlines (L.I.A.) may lose its congressional franchise to operate domestic and international air transportation services following the crash last Monday of its only flying Fokker-27.

Rep. Juan Miguel Zubiri (Lakas, Bukidnon), chairman of the House committee on franchises, told a news conference yesterday that his committee will shortly inquire into possible violations by Laoag Air of its franchise as well as the business plans and other documents it submitted to Congress.

But LAI owner and pilot Paul Ng cried sabotage, saying rivals envious of the growing operations of his airline had poured water into the engine oil of the ill-fated Fokker-27.

Ng told ABS-CBN the plane was only 15 to 19 years old. Investigators from Fokker and Rolls-Royce, which manufactures the engine of the F-27, arrived in Manila yesterday to determine the cause of the crash that claimed 19 lives.

At the Senate, Minority Leader Vicente Sotto III said LIA was already operating by virtue of an executive order issued by then President Fidel Ramos even before it received a congressional franchise in 2001.

Sotto’s revelation caused consternation among his colleagues, with Senators Rodolfo Biazon and Sergio Osmeña III questioning how LIA was able to operate an air service without a congressional franchise as required by law.

Zubiri said the panel will summon officials of the Air Transportation Office (ATO) and the Civil Aeronautics Board (CAB) to testify on the airline firm’s compliance with safety standards and other terms of the franchise.

He said under Section 2 of Republic Act 9103, the law allowing LIA to operate as an airline company, the firm’s aircraft "shall at all times be airworthy and the crew members shall be licensed by the government of the Philippines."

"We want to know if their only remaining plane was airworthy, if it was safe to ride in," he said.

Zubiri revealed that he has received information that LIA had four other Fokker 27s but that these have been grounded.

"Were these grounded because they were not safe to fly? The ATO should answer this question," he said.

He added that depending on the testimonies it receives, the committee would decide whether to revoke the franchise or recommend sanctions against the airline.

The inquiry by the Zubiri committee was prompted by a resolution filed by Rep. Imee Marcos (KBL, Ilocos Norte).

Committee records show that it was the last Congress that approved LIA’s franchise in early 2001. The bill containing the congressional privilege was authored by then Ilocos Norte Rep. Rodolfo Fariñas.

Meanwhile, Sotto, former chairman of the Senate committee on public services that approved LIA’s franchise, said records of the committee hearings showed that the CAB gave the company a certificate of authority to engage in the business of air services for five years to 2000.

The franchise of the airline was granted only on April 9, 2001 when President Arroyo signed Republic Act 9103.

Sotto cited records showing that during committee deliberations, LIA’s Ng said that an executive order issued by Ramos allowed the CAB to issue the certificate to operate.

The certificate allowed LIA to engage in non-scheduled air services, domestic and international, for five years. Non-scheduled meaning the airline would not be penalized by CAB even if the flights are canceled. It was serving missionary routes like Laoag, Masbate, Tablas and Batanes.

Sotto recalled that the committee wondered why the company needed a congressional franchise when it was already operating by virtue of an executive order.

"Mr. Ng said they needed the franchise because they have a five-year development plan and they want to invite investors," he said.

He added that Ng, a Malaysian citizen married to a Filipina, testified that LAI would buy 737-200s and Air 200s. When LIA applied for a legislative franchise, it was already operating four airplanes — three classified as airworthy — all of them old models.

Sotto said the investigation by the Senate committee on public services headed by Sen. Joker Arroyo would determine if Laoag Air made any effort to modernize as it had indicated in its testimony before the Senate panel.

"We could revoke the franchise if Laoag Air has failed to make any move to modernize," he warned.

Senate President Franklin Drilon said that Congress has the power to revoke a franchise. He added, however, that he is not sure if the move should start in the House or the Senate.

"But whatever, any move needs the appropriate action by the Senate," he stressed.

Senator Arroyo, meanwhile, said that he could not schedule any public hearing yet on the disaster that hit an LIA plane last Monday.

"We should have preliminary findings from the Air Transportation Office first because we have no technical expertise," he said. "What’s more, the victims are still in hospitals so whom are we going to call to testify?"

Reports said if the LAI fleet is allowed to fly again, it may be required to change its name so it won’t be linked to Laoag, a tourist destination in Ilocos Norte.

Meanwhile, Asian Spirit announced it will start servicing the Laoag-Basco route next week as part of its public service to fill the vacuum in air transport left by the LAI tragedy.

Two Asian Spirit planes will fly the Manila-Laoag-Basco and Manila-Basco routes starting Nov. 20 to cater to the air transportation needs of Ilocos and Batanes residents.

Asian Spirit chairman Noel Oñate said they will use their 10-year-old Canadian Dash-7 De Havilland 50-seater plane and a brand-new 44-seater Indonesia-Spanish Casa plane for the new service.

He said Asian Spirit will fly the Manila-Laoag-Basco route on Wednesdays, and the Manila-Basco routes on Mondays and Fridays.

Fokkers smuggled?

Meanwhile, the Bureau of Customs is now rushing its report on the alleged smuggling of Fokker planes into the country by LIA, possibly including the one that crashed Monday killing at least 18 people.

Customs Commissioner Antonio Bernardo told The STAR that LIA has been under investigation for at least two months based on anonymous reports that its planes were flown into the country and used for commercial flights without the required permits.

"It appears that the duties being paid (by LIA) were really low," Bernardo said.

He said he has ordered his investigators to come out with their report by Thursday.

"We are now rushing the report. I am here talking to investigators right now, he is in front of me," Bernardo told The STAR in a brief phone interview.

The BOC commissioner could not immediately provide details of the investigation. – With Jose Aravilla