We have to understand the roots of the problem. In one word, it’s globalization. Like it or not, globalization is here and there is no getting away from it. Contrary to popular impression, globalization is not just about the low priced Chinese-made goods being sold at 168 Mall. It is also about services, how particular services are valued in this globalized world.
It just so happens that in the case of pilots, world demand for their services is such that airlines are ready to pay $8,000 to $12,000 a month for them. We cannot, in the light of this reality, insist on paying just $2,000 to $5,000 for the same responsibility flying the same type of multi-million dollar airplane and assuring the safety of the same number of passengers. Man, being a rational economic animal, makes decisions in his best interest. He will no doubt seek to be paid as much for his services as the market can bear.
Okay, so the domestic airlines say they cannot afford to pay those global salary levels with the domestic fares we now have. One solution is to raise domestic fare rates so that local airlines can afford to pay global salary rates. That will constrain the market for the short term, but in time, the market should adjust to the reality. Why should the pilots be made to subsidize those who use airline services? Passengers and shippers must pay the true economic costs of the service.
Local airlines flying international routes, however, are charging international rates and should, therefore, have no reason to keep pilot salaries lower than global. One possible solution is to adopt the treatment now being given in the case of aviation fuel. Local airlines are allowed to buy fuel tax free for their international flights, to keep them at parity with competing foreign airlines.
Adopting that approach to the pilots, it should be possible for domestic pilots flying international routes to be given tax free benefits, which they would be entitled to anyway, just like any OFW... if they allowed themselves to be pirated by a foreign airline. Right now, these pilots have to pay 30 percent of their salaries in income tax. Maybe, with this privilege, pilots may want to continue working with a local airline. There are, after all, unquantifiable cultural factors in the work environment that makes working for a local company preferable.
But then, I wonder if giving this privilege to pilots who were technically hired here and are officially residents here, legally feasible. It could be a violation of the Constitution’s equal protection clause. Any local taxpayer, with the same income and tax due, can complain that the pilots are being given special treatment at his expense. That complaint would be on solid legal ground, too.
Here is where the local airlines can be creative. They may want to divide their operations into clearly defined sections, domestic and international. Pilots in the international side could be hired abroad by an international subsidiary of the airline and given foreign residence status, thus becoming technically, OFWs. That would be a possible legal cure, a short term solution.
But the only real solution is recognizing the impact of globalization on the salaries of pilots and reflecting it on their pay checks. The only long term solution to a shortage problem is for government and the airlines to work together to train as many pilots as is feasible to take advantage of this global shortage. This massive investment in pilot training should pay off, whether they decide to work abroad or at home. We have ramped up training of nurses from 5,000 to 50,000 a year in five years. Why can we not do something similar for pilots and airplane mechanics?
Any government ban on these pilots from accepting foreign jobs is not going to work and of doubtful legality. However, if these pilots signed valid contracts that bind them to stay a number years with the local airline that trained them, that must be enforced too. And whatever we do for the pilots and the airplane mechanics, should apply to doctors, nurses and other highly trained personnel too. Of course we need their services but we must be able to pay the going global rate or do without.
We must never forget that today, the world is flat. Governments can no longer set rules independent of the rest of the globe. Globalization reigns, like it or not.
I read with interest your column dated March 15, 2006 titled "Enron-like Corporate Scam in Local Firms?" because it addressed something which our government regulators failed to address and this pertains, as you said, to "cooking of the books".
I am even gladder that this particular issue was finally addressed by a well-respected columnist because our company, a small-sized rural corporation, was one of those affected by this scam perpetrated by one of the biggest companies in the world locally affiliated with a major local food conglomerate. This is not brown-nosing Mr.Chanco, but if it were somebody else who brought this up, it would be less credible.
I am impressed by the terms that you used, especially "Sweep the Floor" and "NTW", because these terms were actually used as mantra by their sales executives. However, I strongly disagree with what you wrote that field marketing people were the ones who committed this scam. I believe that this was perpetrated by the highest position in the management chain and the people below were coerced to toe the line. In other words, perpetrating lies became a corporate culture and the people down the corporate chain became liars as well.
In our particular case, during the time of forced trade loading, we were made to sign sales invoices before the actual delivery of the goods. However, in due time, not all of the stocks that were issued sales invoices were delivered to our warehouse. We are disputing over a million pesos worth of deliveries, which to us means the life and death of our business. The field sales people keep dragging their feet regarding this matter citing some preposterous reasons for the delay.
What pains us Mr. Chanco is that we invested a lot of our money, time and effort into this business. Our sales were very good during the time that we were the distributor in the area. We grew the market from 70-percent area market share when we started to 99-percent area market share. It would have been a good business and a profitable one had the "marketing company" not resorted to tricks to deliver results. As a result, our business almost collapsed. It drained our resources because our investment with the company has not been fully paid back.
Thank you for allowing me to put in my two cents regarding this matter. I hope government regulators will finally wake up and start asking questions because this is a matter of greater public interest since this involves a publicly-listed corporation. But then again, knowing our ningas-cogon culture, I am almost certain that this issue will fade into the background unless somebody will constantly press for it, like you for instance. I hope that you will continue playing the role of advocate for us small business owners.
A mother had three virgin daughters. They were all getting married within a short time period. Because Mom was a bit worried about how their sex life would get started, she made them all promise to send a postcard from the honeymoon with a few words on how marital sex felt.
The first girl sent a card from Hawaii two days after the wedding. The card said nothing but: "Nescafe"!
Mom was puzzled at first, but then went to her kitchen and got out the Nescafe jar. It said: "Good till the last drop".
Mom blushed, but was pleased for her daughter.
The second girl sent the card from Vermont a week after the wedding, and the card read: "Rothmans". Mom now knew to go straight to her husband’s cigarettes, and she read from the pack: "Extra Long. King Size"
She was again slightly embarrassed but still happy for her daughter.
The third girl left for her honeymoon in Cape Town. Mom waited for a week, nothing. Another week went by and still nothing. Then after a whole month, a card finally arrived. Written on it with shaky handwriting were the words "South African Airways"
Mom took out her latest YOU magazine, flipped through the pages fearing the worst, and finally found the ad for SAA.
The ad said: "Ten times a day, seven days a week, both ways."
Mom fainted.
Boo Chanco’s e-mail address is bchanco@gmail.com