Philippine Airlines chairman Lucio Tan has displayed characteristic toughness in dealing with the carrier's three unions and has secured a four-year accord after three months of brinkmanship talks. Tan has given the unions a rude awakening after years of capitulation by the carrier's former government owners.

Tan set the tone for negotiations when he told cabin attendants last November they could walk out before he would yield to their demands. They did, the government intervened to stop the strike after four days, and both sides then reached agreement.

PAL's pilots also threatened to walk out over a dispute about cockpit manning, so Tan threatened them with dismissal. Despite a labour department ruling in the pilots' favour, Tan appealed and persuaded the board to halve the US$4 billion fleet renewal unless the pilots capitulated - they did.

Seeing the writing on the wall, the union representing ground staff then decided to call off a strike over Christmas and agreed a settlement with management.

Avelino Zapanta, PAL's senior vice president sales, says Tan has brought about a change in thinking at the carrier. 'In the past, PAL was very liberal with the unions,' he recalls. Union officials were not available for comment.

Tan's tough stance has dampened speculation that he may seek to offload his stake after wrestling control of the carrier last year. The finance community has welcomed his actions and PAL has received approval from the European export credit agencies for its 1997 Airbus widebody deliveries - clearance for the narrowbodies was expected before the end of January.


Source: Airline Business