"They (Cathay) will start operations on Monday," Estrada said in an interview with radio station DZMM. "(Cathay) will send immediately five Airbuses and thre eother planes owned by PAL will be used," he added.

Estrada gave no details of how the arrangement with Cathay would work and said he did not believe the government would need congressional approval for the entry of a foreign airline in the domestic air industry. Airlines need to secure a franchise from Congress before they can operate domestic flights.

"This is an emergency and it (Cathay) will enter into a lease-agreement with a private firm," Estrada said. In Hong Kong, CathayPacific said on Saturday that it had agreed to provide charter services to the Philippines at Manila's request to help keep its air traffic moving.

Cathay currently runs 38 round-trip flights a week between Hong Kong and the Philippines - 34 between Hong Kong and Manila and four between Hong Kong and Cebu.

It said that the airline will initially operate 10 domestic flights a daylinking key cities in the Philippines using Airbus 330-300 aircraft. The airline said additional destinations and flights will be added when the situation develops.

Officials of other domestic airlines said Cathay's operations would help ease the chaos in the domestic air travel due to the closure of PAL, Asia's oldest national carrier. "It's a welcome development to get us over the hump in the short term," an official of Air Philippines Inc said.

But foreign airlines should be allowed to fill the void left by PAL only temporarily, the same official, who requested not to be identified, told Reuters.

"(The government) shouldgive local airlines a chance to prove that they can service the demand," he added. Since PAL closed, passengers have been forced to wait in long queues for days to get seats from four other domestic airlines.

Businessmen in the southern Philippines also said that they have incurred millions of pesos (tens of thousands of dollars) in losses because they lacked planes to deliver their cargoes - from electronics to fresh flowers and tuna.

"We are trying everything to bring back PAL because we are not only looking at the labour union but the interest of all other employees," Estrada said in an earlier interview with radio station DZRH.

"I know how much it hurts for someone to lose a job, especially those who have been with PAL for more than 20 years. They all have families and then suddenly their jobs are gone especially in this difficult time," Estrada said in the same interview.

PAL, with debts amounting to $2.0-billion, closed at midnight on Wednesday after failing to reach a labour deal to secure itsfuture. Management had offered unions 20 per cent equity interest in the airline in return for a 10-year freeze on labour bargaining.