MANY in business circles, and the aviation industry, in particular, were puzzled by tycoon Lucio C. Tan’s buyback of flag carrier Philippine Airlines (PAL).
From among his trophies, the airline business has given him so many headaches since acquiring PAL from the government in the 1990s.
For two years, starting in 2010, Tan was hounded by many problems, such as when the bulk of PAL’s experienced pilots was poached by wealthy Middle East airlines.
There was that seemingly intractable problem with the Philippine Airlines Employees’ Association, whose members were earlier fired until a settlement agreement was signed last year, ending a two-year outsourcing dispute.
The Flight Attendants’ and Stewards’ Association of the Philippines and its 1,600 members won’t agree to the compulsory retirement age and the elimination of age and gender discrimination against its members, a core issue at the collective bargaining agreement dispute.
Here, in an intimate revelation by those closest to “Kapitan,” as he is fondly addressed, are some of the reasons the first Filipino-Chinese billionaire recouped a prized possession.
Asked by daughter Vivienne why her father was intent in getting back the flag carrier, the 80-year-old Taipan answered, “Remember, Vivian [Tan has difficulty pronouncing the French version], PAL is Philippines, and Philippines is PAL.”
That, in a nutshell, is the sum total of the commitment that Tan has invested in the “legacy” carrier, which to him means more than money.
Tan had been granted so many doctorate degrees in humanities, here and abroad. He has more doctoral titles appended to his name than medical doctors around an operating table, our sources say.
Tan bought back his share for $800 million (not $1 billion as reported), two years after 49 percent of his shareholding was sold to food-and-beverage conglomerate San Miguel Corp., for $500 million.
Still, the question persists: Why did he buy back PAL?
The answer goes back to where Tan came from. Born in Amoy (now Xiamen), Fujian, China, his family migrated to the Philippines in 1949 when he was a child, when the Communist Party took over China. He worked as a janitor at a tobacco factory and earned for himself a college degree.
The rest is, as they say, history. Tan became one of the richest Filipino-Chinese taipans of his generation.
In short succession, he headed a conglomerate that includes banking, airline, liquor, tobacco and real estate.
Now, in the autumn of his life, Tan, villified at home for tax evasion and other alleged sins, is short of a deity in Guam, where he built the Micronesia Mall. The local governor decreed “Lucio Tan Day” an official holiday, after Tan saved the residents from dying by bringing in power generator sets and drinking water following a devastating typhoon.
In the Philippines he has built many water-impounding dams to help farmers in Luzon get water for their farms during drought, an act of charity and without fanfare.
He built an exact replica of the Jose Rizal monument at the Luneta in Fujian, the place where many of the Chinoys, or Chinese-Filipinos, trace their roots.
Tan has succeeded in all the challenges he faced before, and now, when he contemplates The Great Beyond, there is one nagging thought in his mind: “I succeeded in everything but PAL,” our source intimated.
This self-made man cannot accept defeat, especially for the airline that he considers “family.”
Tan did not lose much sleep when Fortune Tobacco slipped out of his hands, as this, along with alcohol, is considered a “sin” product.
To Tan, PAL is a national symbol serving Filipinos worldwide, including millions of overseas Filipino workers toiling in the deserts of the Middle East.
Getting back PAL meant he could bequeath a national heritage to his beloved Philippines, according to our source.
On September 15, during the homecoming celebration the “PAL family” held to mark his arrival at the Development Bank of the Philippines building in Pasay City, Tan was simply said to have returned “because he never left” the airline, old-timers said.
The applause was deafening, the adulation short of veneration for someone who did not have the heart to fire an employee. “They have a family to feed,” he always used to say.
PAL was saddled with 14,000 employees when he took over in the early 1990s. He retained 7,000, or half the work force. He was told 4,000 would suffice to make it return to profitability.
Tan kept a close watch on his beloved airline, and the news he received was disheartening.
Passengers complained of the seemingly heartless way they were treated. One kilogram overweight for traveling passengers was no longer exempted from fee, but anything below 5 kilos used to be free under Tan’s leadership.
A foreign consultant hired to find ways to generate more revenues for PAL implemented policies without regard of the Filipino culture and sensibilities, the source said. The feeling of camaraderie and fellowship that used to pervade the airline had evaporated, replaced by a dispassionate pursuit of profits.
The deepest cut was for him to be sidelined as PAL majority stakeholder. This was the same treatment Tan said he received under Antonio “Tonyboy” Cojuangco, whom he provided with enough capital to have a brief run of PAL in 1992.
“Ikaw bida, wala ako say?” Tan reportedly quipped.
Under Ramon S. Ang’s dispensation, Tan seemed to have been largely overshadowed as a majority partner, and all claims of success and triumphant accomplishments have been heaped on “RSA.”
And so, to the tune of the PAL anthem, “Love at 30,000 Feet,” a jingle composed by Jose Mari Chan, Tan, like a returning Douglas MacArthur, was embraced once again by his PAL family.
PAL’s former president and COO, who is now general manager, Jaime “Jimmy” Bautista introduced him with the salutation: “Dear Kapitan, thank you for believing in PAL.”