Tan is majority owner of flag carrier Philippine Airlines (PAL) and other big businesses, notably cigarette and beer firms under his flagship company, Fortune Tobacco Corp.
The governor of Guam will confer on Tan the "Ancient Order of Chammori," a legislative citation for his contribution to the development of the economy of Guam, and a plaque of appreciation for PAL’s airlifting of 55 (electric) generators free of charge during the energy crisis brought about by a typhoon that battered the islands last year.
Guam, located in the Pacific Ocean like Hawaii, hosts a significant number of Filipinos and American nationals. Like the Philippines, it was ceded to the United Sates by Spain in 1898. Today it remains an unincorporated US territory.
In an exclusive interview yesterday with The STAR on board PAL’s flight PR105 to Manila from San Francisco, Tan surmised that the honors from the Guam government were largely due to the decision of PAL to open up the Manila-Guam route early this year.
He said the people and travelers in Guam welcomed the entry of PAL as they offer a much lower rate than those being charged by other airlines.
A travel to and from Guam and Manila costs around $1,300 in other airlines as against PAL’s introductory offer of only $400.
"But we are losing in the Guam route," he disclosed. "Our creditors are even telling us to stop it," he added, noting that under PAL’s rehabilitation scheme, the management of the airline belongs to the creditors.
However, Tan defended PAL’s position of "half-price dumping" saying that the lower rate is really to maintain a hold on the C and D market or low-income travelers like overseas Filipino workers (OFWs) as PAL’s competitors are already patronized by the A and B or higher income market.
Tan said PAL’s woes also include the fact that American Airlines, like Continental, enjoys subsidy from the US government following the Sept. 11 terrorist attacks in the US last year.
"But PAL does not enjoy subsidy from the Philippine government and yet they sell our routes to our competitors. It’s a pity," he rued.
"So PAL is in a very difficult situation now," Tan added. "Our chances to survive is to minimize loss. But if we stop operating like this, we lose more. If we continue, we cannot continue to loose," he said.
He noted with concern that the continuing travel advisory against travel to the Philippines by the US, China and Japan — which incidentally are also the biggest travel markets of PAL — has created a huge dent on their operations.
He cited that the recent bus bomb explosion in Quezon City caused a lot of canceled flights for PAL and the rest of the travel industry, including hotels.