Non-existent company becomes RP flag-carrier

The Senate committee on public services headed by Sen. Joker Arroyo raised a howl yesterday after finding out that a "non-existent, non-operating" airline company has been named an official flag carrier of the Philippines.

In a hearing yesterday, the panel was incredulous upon learning that President Arroyo, acting on a recommendation of the Civil Aeronautics Board (CAB), had signed an executive order naming the CLA Transport Corp. as a national flag carrier.

"The company is non-existent and does not even have any airplane," Arroyo protested.

He asked CAB Executive Director Manuel San Jose to explain how an airline without any airplane and without any operations could become a national flag carrier.

Senate Minority Leader Vicente Sotto III said CLA has no franchise yet, but has already been granted "four and-one-half" slots by Japan based on its accreditation as a national flag carrier.

"The government lost about $7.5 million in potential revenues from tourists because the slots were given to a non-existent airline company," Sotto said.

Transportation Undersecretary Arturo Valdez said that he was embarrassed when he went to Japan last Nov. 28 seeking additional slots for Philippine flag carriers.

Valdez told the Senate committee that Japanese officials virtually scolded him for seeking additional slots because the Philippines had not used for about 18 months the four-and-a-half slots granted to CLA.

He said that because of its non-use, the slots were canceled.

"CLA is nonexistent so it could not have used the slots allotted to it by Japan," Sotto said.

He explained that a slot is equivalent to a "parking space for an airplane." The slots for CLA were on a weekly basis, and the government lost at least $7.5 million in potential revenues because the slots were not given to an operating national flag carrier like the Philippine Airlines.

The CLA was reportedly organized by businessman Pepito Alvarez with several Japanese investors as fellow incorporators.

Meanwhile, Arroyo and Sotto said yesterday that they would file a resolution to cancel the franchise of Laoag International Airlines (LIA).

The two issued the statement after officials that investigated the crash of LIA flight 585 last Nov. 11 indicated there were a number of operational lapses by the management. Nineteen passengers and crewmen died in the crash, although the pilot survived.

Valdez and Maj. Gen. Adelberto Yap, head of the Air Transportation Office, recommended the revocation of the 25-year franchise of LIA and the cancellation of its certificate of public conveyance.

They said that the plane crashed because of the failure of the pilot to determine if the fuel switches were in the open position. The switches had been determined to be in the "shut position."

"The plane was able to take off because it had about 14 gallons in its collector tanks, but after two minutes, the plane suffered from fuel starvation and crashed," Valdez said.

Sen. Sergio Osmeña III asked Yap to secure the four airplanes of LIA so these could answer for any civil action that would arise from the death of 19 people in the crash. – Efren Danao