pal history
TRANSCRIPT
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Philippine Airlines History
Alquetra, Flordeliza Y.
Ballesteros, Veronica M.
Causing, Dianne Melerie C.
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Company History:
Philippine Airlines, Inc. (PAL) has been thedominant air carrier in the Philippines since itscreation in 1941. Operating both
internationally and within the 7,100 islandsthat make up the country, PAL has beensomething of a curiosity and scandal amongthe world's major airlines, for decades losingmoney while being traded among the handfulof wealthy families in control of the Philippineeconomy.
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Company History:
After 14 years of ownership by the government of deposed President Ferdinand E. Marcos, PAL was soldat the order of President Corazon Aquino in 1992 to a
consortium of companies under the leadership of theSoriano and Cojuangco (pronounced "koe-HWAHNG-koe") families. Because Aquino's maiden name wasCojuangco, many believed this "privatization" of PALwas not likely to break the pattern of corruption and
inefficiency that has marred the carrier's history since1941. But events in the late 1990s would conspire toforce significant changes in the airline.
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Founding in the 1940s
The first Philippine air transport companies were created inthe early 1930s, primarily as a means of travel and freightdelivery between the nation's scattered islands. One of these pioneering companies was the Philippine Aerial Taxi
Company (PATCO), which was granted a 25-year charter bythe Philippine legislature in 1931 for both domestic andinternational flights. At that early date, when the countrywas still a possession of the United States, Pan AmericanAirways provided most of the Philippines' international airtransportation. PATCO settled for short flights among the
major islands of Luzon, Cebu, Leyte, and Mindanao. On theless developed islands, PATCO also provided intra-islandflights between distant towns.
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The 1941 transformation of PATCO into PAL involved aninternational cast of characters, most notably GeneralDouglas D. MacArthur, at that time in charge of the UnitedStates Armed Forces in the Philippines preparing for an
expected Japanese invasion of the islands. GeneralMacArthur, whose father had served as the first militarygovernor of the Philippine Islands following the Spanish-American War of 1898, had served in the country in variouscapacities throughout his career, including a four-yearperiod before World War II when he was employed by the
Philippine government as its field marshal. (MacArthur wasrecommissioned by the U.S. Army in 1941 and oversaw theeventual loss of the Philippines to the Japanese in 1942.)
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The general employed as his aide-de-camp a wealthySpaniard named Andres Soriano, who had previouslyserved as consul in Manila for the Spanish dictatorFrancisco Franco. Soriano controlled the large SanMiguel Breweries along with a number of othercorporations, and had powerful connections in thePhilippine capital. In 1941 he put those connections togood use by teaming with the National Development
Company, a government agency, in forming PhilippineAirlines, Inc., which promptly absorbed PATCO, therebybecoming the nation's largest air carrier.
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As the creation of General MacArthur's aide de camp, PALstood an excellent chance of winning contracts from theUnited States Armed Forces for its transport needs in thecoming war. Unfortunately for Andres Soriano and his
fellow investors, the invasion came early and ended quickly,with the Japanese gaining control over the islands by thesummer of 1942. It is not clear what became of PAL duringthe Japanese occupation, but on December 8, 1941, theday after the Japanese attack on Pearl Harbor, GeneralMacArthur made Andres Soriano a colonel in the U.S. Army,
and an American citizen as well. It is safe to assume thatSoriano returned to Manila with MacArthur's liberatingforces in 1944 and resumed control of his various businessinterests, including PAL.
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There is considerable evidence that MacArthur helpedSoriano and PAL whenever he could. In 1946, MacArthurinstructed the War Department to fly 20 tons of bottle capsto Soriano's San Miguel Brewery to cover a shortage. In
addition, the two men were both strongly anti-Communist,and MacArthur's own extensive business holdings in thePhilippines made his relationship with Soriano more likeone of business partners than military officers. SterlingSeagrave commented on the chaotic postwar scene in hisbook The Marcos Dynasty, "The $2 billion aid package [from
the United States to the Philippines] was fought over anddevoured by politicians, by rich MacArthur partisans, andby packs of bureaucrats."
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Post World War II Activities
Helped by such massive infusions of American capital, thePhilippine economy rebounded from its wartime privations. PALprospered so quickly that by 1948 it had already bought out two of its largest competitors, Far Eastern Air Transport, Inc., andCommercial Air Lines, Inc. Within a few years three other
competing lines also threw in the towel, and PAL stood alone as theairline of the Philippines. Its ownership was still split between thePhilippine government and the Soriano interests. The Sorianos wereminority shareholders, but handled the day-to-day management of the airline, which, if the later pattern of graft and kickbacks wasalready established in the 1950s, was the more lucrative end of the
business. Philippine magnate Enrique Zobel once bluntly remarkedin the media that "PAL is a milking cow," and most of the milkseems to have been generated by what F ar Eastern EconomicReview described delicately as the "company's operations, forinstance by dictating its material requirements."
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PAL's activities were described more directly in the New York Times, which quoted a 1989 World Bank study. Thelatter found that the airline was holding "millions of dollarsof spare parts for aircraft it no longer owns and ground
equipment so badly maintained that it has little valueexcept as scrap." At one time PAL was even accused of carrying an "inexplicably large inventory of 750,000 sanitarynapkins," as reported in the F ar Eastern Economic Review.Clearly the finances were being toyed with to someone'sadvantage, which may help to explain how an airline that
so often reported a loss in its annual report could remain afinancial plum much sought after by Philippines businessfamilies.
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Whatever the intrigue surrounding its operation, PALexpanded its route system and doubled passenger milesbetween 1946 and 1950. The airline was serving 36domestic airports by 1955 and owned a fleet of 35 planes,
some of them DC 3/C47s and the rest Convair 240s. PAL'sprimary business still lay in freight and communicationservices, such as the mail, since its ticket prices were farbeyond the means of the average Filipino. From theinternational airport in Manila, PAL sent 33 flights weekly toCebu City, the transport hub of the southern islands, and
offered regular service to all sections of the widelyscattered nation, even the more remote islands wherepassengers were few and the operation ran at a loss.
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Indeed, the airline has repeatedly blamed its financialtroubles on the large number of short, unprofitable flightsit must offer as the nation's only airline. In this regard, itwas significant that on the eve of its sale to private
investors in 1991, PAL announced a dramatic cutback in thenumber of its shorter domestic flights, encouraging theformation of new private companies to take these on. PALclaimed in reports published as far apart as 1950 and 1989that it enjoyed the lowest cost of operation in the industry,so it would be hard to explain its frequent losses other than
by blaming the unprofitability of the line's short-hauldomestic business. (Unless, as some suspect, the airline's"loose accounting methods" have been to blame.)
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PAL under the Marcos Regime
The Soriano family retained control of PALuntil the late 1960s, the period of FerdinandMarcos's rise to power. Marcos was first
elected president of the Philippines in 1965and remained the country's absolute ruleruntil his forced exile in 1985, when it wasdiscovered that he and his wife, Imelda, had
systematically plundered their country fordecades while amassing a fortune estimatedto be at least $1 billion.
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Marcos literally had a hand in every major Philippineenterprise, including the nation's airline monopoly. AsImelda Marcos became a regular guest at parties andgovernment capitals around the world, she accrued a
debt to PAL of nearly $6 million in the mid-1970s. Theairline's owner, Benny Toda, offered to cut the bill inhalf if the Marcoses would pay it; instead, ImeldaMarcos demanded that he transfer his interests in theairline to the government--which meant, in effect, to
the Marcoses themselves. Afraid to refuse, Toda settledon a price with Ferdinand Marcos and turned over hisstock, for which he later said he was never paid.
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AL became one of the many baubles flaunted by ImeldaMarcos, who by this time was one of the richest women inthe world. The First Lady of the Philippines traveled aroundthe world in her own PAL DC-8 jet equipped with beds, a
built-in shower, and gold bathroom fixtures, sometimesalso commandeering a second jet to carry her personalluggage. The airline was officially under the control of theGovernment Service Insurance System (GSIS), whichcontrolled the pension funds of all government employeesin the country and was one of the Philippines' largest
financial institutions. GSIS was run by Roman A. Cruz, oneof Imelda's favorites, and it was Cruz and his family who ranPAL from its takeover to the election of Corazon Aquino in1986.
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By that time the airline had racked up consistent losses for thebetter part of two decades. PAL was at least able to enjoy thebenefits of Manila's new international airport, completed in 1982 toreplace a network of runways dangerously in need of repair; but, inthe words of the F ar Eastern Economic Review, "the airline [was]
hobbled by ineffective management and corruption." It was alsoplagued by employee defections to other airlines, which generallypaid about four times as much as PAL and were not "hobbled" bycorruption in such gross forms. During the 1980s more than 1,000of PAL's licensed mechanics, its most valuable ground workers,were lured by competing airlines, "exacerbating flight reliability
problems," according to the industry magazine Aviation Week &Space Technology. PAL had become something of anembarrassment to the international aviation industry.
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New Leadership in the Mid-1980s
The rise of "People Power" in the mid-1980s, culminating inthe election of Corazon Aquino and the escape by theMarcoses to the United States in 1986, apparently offered achance for significant changes in the Philippine economy.
Not dwelt upon in the international press, however, wasAquino's membership in the Cojuangco family, probably thewealthiest of all Philippine business clans and for manyyears crucial supporters of the Marcos regime. Observerspoint out that the election of Aquino changed less in thePhilippines than her less affluent supporters had hoped,
and the privatization of PAL in 1992 offered little evidenceof any real diminution of the powers of the elite families.
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President Aquino originally ordered the sale of PAL along with hundreds of other government-owned companies shortly after her election in1986. Since the airline had been run at a loss formany years, Aquino first hired a Philippinebusinessman named Dante Santos to make PALprofitable prior to its sale. Under Santos, PAL didreport two years of net income, but these were
widely assumed to be the result of creativeaccounting methods rather than of anysubstantive changes in PAL's performance.
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Indeed, in late 1990, four years after the accession of DanteSantos as president of the airline, no fewer than 22 of PAL'stop executives were charged with negligence, fraud, and/ormismanagement; ten of these officials were eventually
fired, including an executive vice-president, two seniorvice-presidents, and four vice-presidents. They wereaccused of precisely the sort of corrupt operationalpractices that had been a way of life at PAL for decades,including theft of parts, over-purchasing, and kickbacksfrom travel agents. It was hard to say, according to some
critics, whether the firings were part of a genuine cleanupeffort at PAL or merely a means of clearing the decks beforethe company's sale, after which the buyer might wish toinstall its own people in these lucrative positions.
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The sale of PAL was carried out in a curiousfashion. The government first paid approximately$350,000 to the Asian Development Bank forrecommendations on how best to proceed withthe privatization of the airline. The studyconcluded that a large infusion of foreignownership and management would be needed toturn around the airline's performance. For
reasons of its own, the government rejected thisproposal and instead commissioned a secondstudy, this one from a branch of the World Bank.
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The second report also recommended that about one-third of theairline be transferred to foreign hands, chiefly as a means of retiringsome of PAL's $650 million in foreign debt. This plan was alsolargely ignored, however, and in the months immediately prior tothe airline's sale, PAL officials admitted that they could not return
the company to profitability and were expecting a shortfall betweenits sale price and the amount of its debt. The company itself valuedthe two-thirds of its assets up for sale at somewhere between P6.35 billion and P 6.69 billion, while the World Bank study hadpegged their worth between P 5.25 billion and P 7.51 billion. Butwhen the written bids were opened in January 1992, two groups of
Philippine companies had bid over P 9 billion, with AB Capital &Investment Corporation the winner at P 9.78 billion.
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AB Capital represented a consortium of Philippineinterests headed by the Soriano and Cojuangcofamilies, who had created the airline in 1941. Contraryto the recommendations of both preliminary studies,
none of the company was sold to foreign investors;instead, the remaining 33 percent was kept by thePhilippine government, specifically by GSIS, throughwhich the Marcoses had taken over PAL in 1978. Ineffect, PAL remained under the control of the same few
Philippine families, this time without the bothersomeintrusions of foreign investors, who might possiblyinsist on a more rigorous accounting of its dailyoperations.
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Prospects for the 1990s and Beyond
Thus when president and COO Jose Antonio Garcia in early1996 proclaimed that PAL would "take on the world" onceit had "a clean house," to many observers this sounded likea familiar refrain built around false notes. According to
Michael Mackey in Air Transport World in February 1996,the company had lost P 1.7 billion (US$61 million) in thefiscal year that ended March 31, a figure that in subsequentreports would be raised to $70 million ( Asian Business,April 1996) and $93 million ( Airfinance Journal, June 1996).Revenues had flattened, operating expenses had risen,
losses were spreading, and debt-equity ratios were movingin the wrong direction. The causes of the airline's pooreconomic performance were likewise familiar.
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Mackey identified three key factors: problems with thecountry's aviation infrastructure, growing competitionfor the Philippine market, and "the huge, sprawlingsubject of PAL's relationship with the government androle in development of the economy."
Inefficiency was as rampant as ever in the fields of technology, logistics, and operations. Of the airline's 11Boeing 747-200s, six had GE engines, and the rest Pratt
& Whitney--thus creating a less efficient maintenancesituation than if all used the same type of engine.Worse, its fleet was both small and old.
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The size meant limitations on the number of flights--just 14 a week to the U.S., compared totwice that many for its American competitors--and the age of the aircraft placed limits onnonstop distance. A trip from Manila to Londonwas, as Mackey wrote in October 1997, "aHomeric odyssey" that required travelers to stopin Bangkok, Abu Dhabi, and Frankfurt. Not only
did this create inconveniences for passengers, butPAL had to pay fees at every airport, thus cuttinginto its profit margins.
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Its people posed as much of a liability to PAL as itsmachines. Abby Tan in Asian Business (April 1996) recordedthe following litany of larcenous acts against the airline byits own employees: "In one recent incident, 13 employees
were charged in a ticket refund scam in Iloilo City that wasestimated to be costing the company US$3,000 everymonth. PAL also loses around US$15.2 million each yearthrough theft of plane parts and other supplies. That figuredoesn't include items stolen from provincial stationscentres where the airline's catering and ground-handling
facilities are located. In one case, security agentsdiscovered a fuel line running directly off companygrounds."
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Source:
http://www.fundinguniverse.com/company-
histories/Philippine-Airlines-Inc-Company-
History.html
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Philippine Airlines Policies
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Policy
When this Policy Begins and Ends All coverages, except Trip
Cancellation, commence two (2) hours before the Insureds
scheduled PAL flight departure time and ceases on
whichever of the following occurs first: (a) upon arrival of
Insureds scheduled return flight; (b) the expiry of the policy
period specified in the Policy; (c) the Insureds return to his
/ her place of residence or employment; (d) for one-way
itineraries, upon Insureds arrival at PAL flights destination
For Trip Cancellation, coverage takes effect upon acceptanceand approval of application and receipt of premium
payment.
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Section 1 Emergency Medical
Assistance and Medical Expenses 1.1 Medical Expense Including Follow-up Treatment The
Company will reimburse the Insured for all reasonable and
customary charges up to the benefit amount per event,
subject to a deductible of PHP500 per claim per event,
following an accident or sickness incurred during a Trip
within the Philippines. Covered medical expenses are
services and supplies which are recommended by the
attending physician and they include: (a) the services of a
qualified medical practitioner; (b) hospital confinement and use of operating room; (c) anesthetics (including
administration), x-ray examinations or treatments, and
laboratory tests; (d) ambulance service; (e) drugs
medicines, and therapeutic services and supplies.
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1.2 Emergency Medical Evacuation
When as the result of injury commencing while the
Insured is traveling within the Philippines and if in
the opinion of the Company or its authorized
representative, it is judged medically appropriate tomove the Insured to another location for medical
treatment, or to return the Insured to the place of
residence, the Company or its authorized
representative shall arrange for the evacuationutilizing the means best suited to do so, based on the
medical severity of the Insureds condition.
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1.3 Hospital Confinement Benefit
This section pays for Hospital Confinement due to Accident or
Sickness sustained during a trip within the Philippines. The
Company shall pay for hospital room and board expense, up
to the daily limit stated in the Policy, as a result of any one (1)
injury or sickness, but not to exceed ten (10) days. This
benefit will only apply while the insured person is in the
Philippines. Hospital Confinement Benefit shall mean hospital
room and board expenses incurred as an in-patient under the
professional care of a legally qualified and registered medicalpractitioner. Payment will be made after the period of
confinement in the hospital.
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1.4 Emergency Communication
Expenses
The Company will reimburse the Insured for
reasonable communication expenses incurred
by the Insured as a result of a medical
emergency.
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1.5 Emergency Repatriation
When as the result of injury covered under
this Policy commencing while the Insured is
traveling within the Philippines, the Insured
dies within thirty (30) days from the date of
injury, the Company or its authorized
representative shall make the necessary
arrangements for the return of the Insuredsmortal remains to his or her place of
residence. The Company shall cover expenses
for such repatriation.
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1.6 Compassionate Visit
If the Insured is hospitalized more than five (5) days
and medical condition forbids the repatriation and
no adult member of the family is with the Insured,
this section will cover reasonable and necessarytransportation and hotel accommodation expenses
of one (1) of the immediate family member of the
Insured, up to the limit specified in the schedule of
benefits, provided such transportation andaccommodation is arranged by the Company or its
authorized representatives.
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Section 2- Emergency Trip
Cancellation and Termination 2.1 Emergency Trip Cancellation Under this section,
the Company pays the Insured up to the limit stated
in the schedule of benefits for loss of travel fare
and/or accommodation expenses paid in advanceby the Insured and for which the Insured is legally
liable and which are not recoverable from any other
source consequent upon the cancellation of the Trip
necessitated by the following occurring withinthirty (30) days before the date of the
commencement of the Trip:
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(a) Death or serious Injury or sickness or compulsory
quarantine of the Insured, spouse, parent, parent-in-law,
child, grandparent, brother, sister, business partner or co-
director; (b) Unexpected outbreak of strike, riot, or civil
commotion at the planned destination arising out of
circumstances beyond the control of the Insured Person;
(c) serious damage to the Insureds principal residence from
fire, flood or similar natural disaster (typhoon, earthquake,
etc.) within one week from the departure date which requiresyour presence on the premises on the departure date; (d)
witness summons or jury service.
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Policy Deductible: This Insurance will not pay
the deductible of PHP500 for each and every
loss.
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2.2 Emergency Trip Termination
Emergency trip termination means
abandonment of the planned trip by return to
the place of initial departure after arrival at
the booked destination as shown on the
booking invoice.
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Section 3 Baggage Delay
This benefit will reimburse the Insured for the
purchase of necessary clothing and toiletries up to
the maximum benefit per twelve (12)-hour delay if
the checked-in baggage accompanying the Insuredhas been delayed, misdirected or temporarily
misplaced in delivery from more than twelve (12)
hours from the time of the arrival at the destination.
The insurance is allowed a maximum of eight (8)payments for every twelve (12)-hour delay if the
same baggage is still not in the physical possession of
the Insured.
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Section 4 Baggage and Personal
Effects This section pays for loss or damage to the Insureds baggage
and clothing and personal effects within the baggage, up to
the maximum benefit amount, during the period between the
date of departure and the date of return to the place of
residence or employment, or when the Policy expires as
stated whichever occurs first and subject to the following. (a)
The amount payable in respect of any one item shall not
exceed the maximum limit stated in the policy, subject to a
deductible of PHP500 for each and every loss; (b) TheCompany may make payment or, at its option, reinstate or
repair as it may select in respect of articles not older than one
(1) year; (c) the Company may make payment or, at its
option, reinstate or repair subject to due allowance of wear
and tear and depreciation in respect of articles more than one
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(d) Loss must occur (i) while the baggage or personal effects
is/are in the possession of hotel staff or a common carrier and
proof of such loss must be obtained in writing from the hotel
management or the common carrier management and such
proof must be provided to the Company, or (ii) as the result of
theft of the baggage or the personal effects from the Insured
provided that such loss must be reported to the police having
jurisdiction at the place of the loss no more than twenty-four
(24) hours from the incident. Any claim must be accompaniedby written documentation from such police; (e) Insured
cannot claim from under both benefits of the section for
Baggage and Personal Effects and section of Baggage Delay
for the same loss.
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Section 5 Personal Accident When, as the
result of an Accident occurring between the
Departure and Return Dates, the Insured
sustains bodily injury which results in his or
her death or disablement, the Company will
pay to his or her beneficiaries the amount as
provided in the Benefit Table below;provided that such death occurs within
ninety (90) days after the date of accident
causing such death.
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1. Death 100%
2. Permanent Total Disablement 100%
3. Permanent and Incurable Paralysis of All Limbs 100%
4. Permanent Total Loss of Sight of Both Eyes 100%
5. Permanent Total Loss of Sight of One Eye 100%
6. Loss of or Permanent Total Loss of Use of Two Limbs 100%
7. Loss of or Permanent Total Loss of Use of One Limb 100%
8. Loss of Speech and Hearing 100%
9. Permanent Total Loss of Hearing in
a. Both Ears 75% b. One Ear 15%
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5.1 Funeral Benefit
If bodily injury due to an Accident should
result in accidental death of the Insured, the
Company will in addition to all other benefits
payable under this Policy, pay for all actual
funeral and burial expenses incurred, subject
to the maximum amount of reimbursement
stated in the Schedule.
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Section 6 Flight Delay
This section will reimburse the Insured up to the
maximum benefit amount per twelve-(12) delay,
hour if the Insureds flight is delayed for more than
twelve (12) hours, for: (a) any prepaid, unused,non-refundable land or water accommodations; (b)
any reasonable expenses incurred in respect of meals
and lodging which were necessarily incurred as a
result of the delay and which were not provided bythe airline or any other party free of charge; (c) the
cost of transfer to and from the airport.
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Only those delays caused by the following will
be covered; (a) delay caused by any severe
weather conditions; (b) delay due to a strike
or other job action by employees of the airline
on which Insured is scheduled to travel; (c)
delay caused by the equipment failure of the
aircraft on which Insured is scheduled totravel.
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This insurance will allow for a maximum of
eight (8) payments for every twelve (12)-hour
delay. This section only applies to normally
scheduled airline flights which Insured had
duly confirmed according to the airlines rules
and regulations. In the event of dispute, the
ABC World Airways Guide will be consideredthe reference work to determine the
timetable of flights and connections. Any
delay of a charter flight will not be covered.
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Section 7 Loss of Travel
Documents The Company will reimburse the Insured up to the
maximum benefit amount in respect of reasonable
additional hotel, travel and communications
expenses necessarily incurred in the location visitedin obtaining the replacement of a lost passport or
visa, provided always that an Insured shall exercise
reasonable care for the safety and supervision or the
property and that any loss of passport must bereported to the Police within twenty-four (24) hours
of the discovery.
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Section 8 Personal Liability
The Company will indemnify the Insured in respect of legal
liability occurring during the Trip as a result of:
(a) death or accidental bodily injury to another person, or
(b) accidental loss or damage to the property of anotherperson, up to the maximum benefit amount, which shall be
the aggregate limit for all losses incurred during the policy
period. Included within this same limit are all costs and
expenses incurred with the written consent of the Company
in connection with the defense of claims against the Insured
which may be the subject of any indemnity under this
coverage.
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Section 9 Hijacking
Any seizure or exercise of control by force or
violence or threat of force or violence and with
wrongful intent, of an aircraft. This section will pay
the Insured the amount stated in the Policy per dayfor the delay or interruption of the journey in excess
of a waiting period of 12 (twelve) hours which
prevents the Insured from reaching the scheduled
destination of the aircraft on which he or she is apassenger as a result of an act of Aircraft Hijacking.
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Miscellaneous Terms and
Conditions
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1. CONTROLLING LAW.
Any interpretation of this Policy relating to its
construction, validity or operation shall be
determined by the laws of the Republic of the
Philippines.
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2. LEGAL ACTIONS.
No action at law or in equity shall be brought
to recover on this Policy prior to the expiration
of 60 days after written proof of loss has been
furnished in accordance with the
requirements of the Policy. No such action
shall be brought after the expiration of one
year after the time written proof of loss isrequired to be furnished.
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If a claim be made and rejected and an action or suit be not
commenced either in the Insurance Commission or any court
of competent jurisdiction within twelve (12) months from
receipt of notice of such rejection or in case of an arbitration
taking place as provided herein, within twelve (12) monthsafter due notice of the award made by the arbitrator or
arbitrators or umpire, then the claim shall for all purposes be
deemed to have been abandoned and shall not thereafter be
recoverable hereunder. Any action or suit arising from thisPolicy shall be brought before the proper courts of the City of
Makati, Philippines, to the exclusion of other courts.
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3. COMPLYING WITH POLICY
CONDITIONS.
The due observance and fulfillment of the
terms of this Policy insofar as they relate to
anything to be done or complied with by an
Insured and the truth of the statements andanswers in any proposal and/or application
and of evidence required from an Insured in
connection with this insurance shall beconditions precedent to any liability of the
Company to make any payment under this
Policy.
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4. CUMULATIVE INSURANCES.
If at the time of occurrence of any loss, except
in respect of the Personal Accident coverage,
there is other valid and collectible insurance in
place, the Company will be liable only for theexcess of the amount of loss, over the amount
of such other insurance, and any applicable
deductible.
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5. EXCEPTIONAL CIRCUMSTANCES.
The Company or its authorized representatives
cannot be held liable for delays in the execution of
services in the event of strikes, riots, any act of
sabotage or terrorism, civil or foreign war, release of heat or irradiation coming from the splitting of nuclei
of atoms, radioactivity, other accidents or cases of
natural events. All interventions by the Company or
its authorized representatives are conducted withinthe context of the national and international laws
and regulations and are dependent on the necessary
authorizations being obtained from the competent
authorities.
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6. ARBITRATION.
All differences as to the amount of any loss or damage
covered by this Policy shall be referred to the decision of an
arbitrator to be appointed by the parties in difference, or if
they cannot agree upon a single arbitrator, to the decision of
two arbitrators, one to be appointed in writing by each of theparties within thirty (30) days after having been required in
writing to do so by either of the parties or in case of
disagreement between the arbitrators, to the decision of an
umpire to be appointed in writing by the arbitrators beforeentering on the reference and an award by the arbitrators or
umpire shall be a condition precedent to any right of action
against the Company only in cases of differences as to amount
of liability actually arising out of this Policy.
7 SUBROGATION OR CLAIM
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7. SUBROGATION OR CLAIM
AGAINST THOSE LIABLE FOR THE
CLAIM. To the extent the Company pays for a loss suffered by
an Insured, the Company take over the rights and
remedies the Insured had relating to the loss.T
his isknown as subrogation. The Insured must help the
Company preserve the rights against those
responsible for the loss. This may involve signing any
papers and taking any other steps the Company mayreasonably require. If the Company takes over an
Insureds rights, the Insured must sign an appropriate
subrogation form supplied by the Company.
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8. TRADE EMBARGO.
The Company is not liable to make any payments for liability
under any coverage sections of this policy or make any
payments under extension for any loss of claim arising in, or
where the insured or any beneficiary under the policy is a
citizen or instrumentality of the government of, any country(ies) against which any laws and/or regulations governing this
policy and/or the insurer, its parent company or its ultimate
controlling entity have established an embargo or other form
of economic sanction which have the effect of prohibiting theinsurer to provide insurance coverage, transacting business
with or otherwise offering economic benefits to the insured
or any other beneficiary under the policy.
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It is further understood and agreed that no
benefits or payment will be made to any
beneficiary (ies) who is/are declared unable
to receive economic benefits under the lawsand/or regulations governing this policy
and/or the insurer, its parent company or its
ultimate controlling entity.
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9. NOTICE OF LOSS.
In case of hospitalization or medical emergency the
Insured, a person traveling with him or her, or the
treating medical authority or institution must contact
the Company or its authorized representative
immediately to verify coverage and arrange the
appropriate medical care. In case of bodily injury or
death written notice of claim must be given to us
within thirty (30) days after a covered loss begins oras soon as reasonably possible. Notice should include
the Insureds name and the policy number.
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10. PROOF OF LOSS.
Written proof of loss including original policy/
certificate, original receipts, invoices and all other
relevant documents must be furnished the Company
at one of the local offices within sixty (60) days afterthe date of such loss. Failure to furnish such proof
within the time required shall not invalidate nor
reduce any claim if it was not reasonably possible to
give proof within such time, provided such proof isfurnished as soon as reasonably possible and not
later than one (1) year from the time proof is
otherwise required.
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11. PAYMENT OF CLAIMS.
Death claims will be paid to the Insureds estate, unless the
Company receives a written request from the Insured Person
designating a named beneficiary. All other claims will be paid
to the Insured. In the event the Insured Person is a minor,
incompetent, or otherwise unable to give a valid release forthe claim, the Company may make arrangements to pay
claims to the Insureds legal guardian, committee or other
qualified representative. Under section 1, in the event funds
for emergency medical treatment are guaranteed to theprovider of healthcare by the Company or its authorized
representative, indemnities shall be payable directly to the
provider of healthcare.
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12. PHYSICAL EXAMINATION AND
AUTOPSY.
The Company, at its own expense, shall have
the right and opportunity to examine the
person of the Insured when and as often as it
may reasonably require during the pendencyof a claim under Sections 5 and 6 of this policy
and to make an autopsy in the case of death
where it is not forbidden by law.
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13. RULE OF REFUND AND
CANCELLATION.
The Company will not allow any cancellation
of Policy once it has been issued. The
Company will not allow any refund of
premium once the Policy has been issued.
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14. ASSIGNMENT.
No assignment of interest under this Policy shall be binding
upon the Company unless and until the original or a duplicate
thereof is filed with the Company. The Company does not
assume any responsibility for the validity of an assignment.
No change of Beneficiary under this Policy shall bind the
Company unless consent thereto is formally endorsed hereon
by an executive officer of the Company. No provision of the
charter, constitution or by-laws of the Company shall be used
in defense of any claim arising under this Policy, unless suchprovision is incorporated in full in this Policy.
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15. AGE LIMIT.
Individuals 2 to 70 years old (inclusive) are
entitled to 100% of all benefits. Free coverage
is extended for the accompanying infant 0 to 2
years old (exclusive), coverage is limited to10% of Personal Accident benefit while other
benefits remain the same.
16 MAXIMUM DURATION OF
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16. MAXIMUM DURATION OF
COVERAGE
Maximum duration of coverage is 45 days
(inclusive).
17 ARTICLE 1250 NEW CIVIL CODE
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17. ARTICLE 1250 NEW CIVIL CODE
WAIVER CLAUSE.
It is hereby declared and agreed that the
provision of Article 1250 of the New Civil Code
of the Philippines (Republic Act No. 386)
which reads:
In case of extraordinary inflation or deflation
of the currency stipulated should supervene,
the value of the currency at the time of theestablishment of the obligation shall be the
basis of payment..
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Philippine Airlines Statistics
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In an estimation, in 100% total population of the
patients: about 30% of the 100% has fever due to weather
conditions and flu
about 25% of the 100% has hypertension and for the
refill of medication/s
about 15% of the 100% has migraine due to stress
and changes in sleeping pattern
about 15% of the 100% has backache due toprolonged standing/sittingabout 15% of the 100%
has sore throat due to changes in environmental
temperature and fever