New airline formed by ex-generals gets franchise

A group of four retired Air Force generals apparently does not believe that the airline and tourism industries are in a slump due to terrorist attacks and would take years to recover.

Together with three business partners, they want to spend their retirement funds and other savings on a new airline that would serve the so-called missionary routes that the bigger players consider unprofitable.

The franchise for their new passenger and cargo carrier, Provincial Airways Corp., was approved yesterday by the House committee on legislative franchises chaired by Rep. Juan Miguel Zubiri (Lakas, Bukidnon).

Retired Air Force generals Romeo David, Augustus Paiso, Epineto Logico, and Reynaldo Reyes, and former Philippine Aviation Corp. president Rolando Moscardon, corporate lawyer Melecio Arranz and Amelia Ylagan, former executive vice president of the Armed Forces Retirement and Separation Benefits System, are the investors in Provincial Airways.

David and Paiso are former officers of Philippine Airlines. During the Aquino administration, David was chairman of the Philippine Amusement and Gaming Corp.

Rep. Gilberto Teodoro Jr. (NPC, Tarlac), who authored the bill containing the franchise application of the company, said when the retired generals approached him to seek his help, he asked them if they knew what they wanted to do.

He said he was surprised that while big airline companies in the United States and Europe are folding up, a group of retirees wanted to invest their savings on a new carrier.

"They assured me they knew what they were doing, and given their experience in this field, I had no reason to doubt them," said Teodoro, who is himself a licensed pilot.

Zubiri said his committee unanimously approved Provincial Airways’ franchise application "because any person or company that offers to run missionary routes and serve our people in remote areas should be encouraged and supported."

His province is one of the areas that the new airline intends to serve. Provincial’s hubs would be the big cities such as Manila, Cebu, Davao, and Zamboanga, but from there, it would fly to the smaller cities and towns where there are airports or airstrips.

The company plans to use single-engine Cessnas that can carry a maximum of 12 passengers. Initially, it would use two planes. On its fifth year, it should have 24 Cessnas.

Provincial is capitalized at P40 million, of which P2.6 million is paid-up. Each of the investors contributed P375,000.

Before the new carrier’s franchise was approved, Davao City Rep. Prospero Nograles called the committee’s attention to the fact that the previous Congress had allowed some smaller airlines to operate "but these did not take off."

"Their failure to take off could be attributed to stringent regulations prescribed by the Civil Aeronautics Board that effectively render the congressional grant of a franchise worthless," he said.

Upon his suggestion, the committee would inquire into why smaller airlines are finding it difficult to operate.

The committee was also informed that one or two airlines are operating without a congressional franchise.