The President of Philippine Air Lines has denied a Washington Post report that the Philippine government took over the airline as a result of getting a $3 million bill for flights by the wife of Philippine President Ferdinand Marcos.
Roman Cruz Jr., a government official who is now president and chairman of the airline's board, said the government "merely accepted a formal written offer" from former majority stockholder Binlgno Toda Jr.
Cruz cites an Oct. 19 letter from Toda saying only the government could provide enough new capital to keep airline services competitive with other international carriers.
Cruz's statement, given to The Washington Post by Marcos' secretary of public information, Francisco Tatad, came in response to an April 23 article in The Post. The statement made no reference to a meeting between Marcos and Toda, reported in the article, in which Marcos asked Toda to sign over the airline two days before Toda wrote the letter offering the airline to the government. The article said Toda decided it would do no good to resist a request from a president with martial law powers.
Cruz said the government assumed control of the company because airline services "had deteriorated to extend unworthy of a national airline that carried the name and the flag of the Philippines."
His statement did not challenge The Post's account of the $3 million bill sent to Marcos by Toda for charter flights overseas contracted by first lady Imelda Marcos, or of a subsequent series of articles in Manila newspapers controlled by friends and relatives of the first lady challenging Toda's operation of the airline.
Noting a statement in the article that Toda had been unable to get government loan guarantees for new equipment offered to other firms favored by Marcos, Cruz said, "Any prudent banker would understand" that such guarantees should not go to a company so "seriously undercapitalized" and which was paying out large profits to Toda.
Cruz also challenged the article's statement that the airline had been taken over "without a cent so far to its former owner." Cruz said the government simply felt Toda was asking too much for his shares. According to the article, Toda complained last month that he had been waiting six months without receiving a counter offer from the government.