PAL in a pickle over unpaid fees

October 2, 2017 by  
Filed under Aviation, News, Philippines

MANILA, 2 October 2017: The Philippine government has threatened its flag carrier with legal action over unpaid fees and ordered it to pay millions in back charges, as President Rodrigo Duterte said he could cut off its access to Manila’s main airport.

Philippine Airlines (PAL) owes 7.3 billion pesos (USD142 million) in landing, navigational and other fees, according to the government, which says some of the charges date back years.

Duterte’s spokesman Ernesto Abella told reporters Thursday that the transport ministry had issued the airline with a final demand for full payment, and was prepared to take legal action in order to “protect the interest of the government”.

On Tuesday Duterte said he had told PAL chairman and billionaire Lucio Tan: “You are using government buildings, airport, you have back debts for the use of the runway that you have not paid.

“I said, ‘You solve the problem yourself. I will give you 10 days. Pay it. If not I will close it down. No more airport’.”

PAL released a statement Thursday saying it was cooperating with the aviation authorities to resolve the dispute, but put the amount in question at 6.63 billion pesos.

“The alleged unpaid navigational charges involve complex legal issues which PAL has been trying to (thrash) out with the authority for years,” it said.

“For the past months, both (Civil Aviation Authority of the Philippines) and PAL have been working together to validate these claims in their mutual and collaborative effort to settle this obligation,” it added.

Previously state-owned PAL was sold off in 1992. Abella said Thursday that fees were waived when the airline was government-owned.

Despite an increase in low-cost competitors, PAL still has the largest fleet in the Philippines and is the only local carrier to fly to North America and Europe.

In June it said it planned to increase its fleet serving smaller islands in the archipelagic nation.

PAL’s parent company, PAL Holdings, suffered a net loss of 501 million pesos for the three months to June due to higher fuel costs and aircraft lease charges.

The listed parent’s stock closed unchanged Thursday at 5.15 pesos.

© Agence France-Presse

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