Philippine Airlines (PAL) said it will continue to cooperate with the Philippine government to resolve the issue of the flag carrier’s unpaid navigational charges amounting to P6.63 billion.
“We look forward to meeting the negotiating panel and we are ready to submit a Compromise Agreement to settle this issue once and for all,” PAL said in a statement on September 28.
The statement was issued after President Rodrigo Duterte warned on September 27 the flag carrier’s chairman and chief executive officer, Lucio Tan, to settle PAL’s liabilities with the government in 10 days, or Ninoy Aquino International Airport Terminal 2—PAL’s exclusive flight base at NAIA since 1992—would be shut down.
The Department of Transportation (DOTr) also issued a statement on September 27 saying it has sent PAL as early as August 2016 letters demanding full payment of all unpaid charges due to the government.
As a result, DOTr noted, discussions were undertaken with PAL to reconcile invoices and documents, which led to the carrier paying P370 million to the Civil Aviation Authority of the Philippines (CAAP), an attached agency of the transport department. PAL also requested discussing the possibility of paying its arrears over seven years, but DOTr said all such requests have been denied.
“Thus, final demand for full payment of all unpaid charges has been sent to PAL, preparatory to the filing of appropriate legal action in order to protect the interest of government,” DOTr said.
CAAP and Manila International Airport Authority (MIAA), in demand letters dated September 27, told PAL to “settle your obligations in 30 days, otherwise, we will be constrained to do all that is necessary to protect the interests” of the state.
As of 26 September 2017, PAL’s unpaid navigational fees and other charges due to the government are as follows: payable to CAAP: P370.584 million for the period January to July 2017, and P6.595 billion for arrears prior and until December 2015; and payable to Manila International Airport Authority (MIAA): P322.112 million.
PAL said “this issue on alleged unpaid navigational charges involves complex legal issues which PAL has been trying to thresh out with the Authority (CAAP) for years.”
It said that for the past months, both CAAP and PAL have been working together to validate these claims “in their mutual and collaborative effort to settle this obligation.” PAL said it has fully cooperated and will continue to cooperate with relevant agencies to resolve this concern.
“In fact, the same legal issues were the subject of a court case between PAL and the MIAA years back where the court ruled in favor of PAL. Despite the favorable ruling, PAL then opted to settle amicably with the MIAA as a manifestation of its full support of the government,” the airline noted.
PAL reiterated its willingness to amicably settle with CAAP “as a manifestation of its continued support for the Authority.” It added that communications have been open between the parties as regards this matter.
“In fact, PAL stressed that CAAP created an inter-agency panel of negotiators for the proposed settlement via CAAP Authority Order 149-17,” PAL pointed out.
It said it has formally submitted to CAAP an offer that exceeds the amount covered by CAAP’s supporting invoices received by PAL. The airline said, however, that to date, it has not received any official response from CAAP on its offer.
PAL, which had recovered from four years of losses in 2014, posted a decline in net income in 2016 to P3.945 billion from P6.460 billion recorded in 2015.
For the first quarter of 2017, PAL reported a total comprehensive income of P904.7 million, a significant downturn from P2.707 billion registered in the same period last year.
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