PAL Returns 3 Aircraft in Scheme to Trim Costs

Business World
September 8,1998
By Patrisha Joan De Leon

Philippine Airlines. Inc. (PAL), launching a process to trim down the size of its fleet for its coming rehabili¬tation program, has returned three of its leased aircraft to the US lessor, a top official of the company said yesterday.

The latest aircraft returned was a Boeing 747-200, which was given back to the leasing firm in the US, said the airline official who requested anonym¬ity.

The aircraft's return is expected to help increase the company's savings under its rehabilitation efforts.

The official said last week's return was projected to generate $8 million in total savings for the company.

The PAL management earlier an¬nounced it had a total of 54 aircraft in its possession. This is targeted to go down to 21 under current plans.

Meanwhile, Business World sour¬ces at PAL said the flag carrier has been slow in making good on its "Plan 21” program.

The sources said it was only lately that the airline was able to mount a 20-aircraft operation.

A management source disclosed that there are currently no fixed assign¬ment for the 20 airplanes. He said the airline expects all route assignment to be finalized when the rehabilitation plan is formally adopted.

"For now, we're flying all kinds of aircraft except the Fokker 50s... but we expect everything to be final when the rehab plan comes out this Sept. 21," he said.

The source also said the PAL man¬agement was still studying whether to adopt a 24- or 25-aircraft complement.

Earlier, Antonio Ocampo, PAL Corporate Secretary and Senior Vice-President for Corporate Counsel, re¬portedly told the government's interagency task force on PAL that the airline plans to fly a total of 24 planes in five years.

STRIKING PILOTS

On the airline's labor problems, the dismissed pilots of PAL yesterday asked the Supreme Court to order their reinstatement and to freeze the company's hiring of local and foreign pilots not affiliated with the union.

In a 31-page petition for review, the Airline Pilots Association of the Philippines (ALPAP) asked the court to issue a mandatory injunction not only to stop PAL from employing non-ALPAP members but also to enjoin it to "unconditionally" accept all striking pilots.

“The unexplained and patently illegal act of PAL of not accepting the striking pilots despite a return-to-work order of the Labor department has forced (us) to seek remedy with this Court," said ALPAP.

ALPAP is a legitimate labor organization composed of all commercial airline pilots of PAL.

The controversy stemmed from PAL's relief last year of Captain Albino Collantes, a senior pilot who had reached the 20,000-flying hour limit. According to the collective bargaining agreement between the firm and the union, a pilot will be considered retired either after serving PAL for 20 years or after having flown for a maximum of 20,000 hours.

On Dec. 9, 1997, ALPAP filed a notice of strike on the ground of unfair labor practice, citing Mr. Collantes' case. The unsuccessful conciliation meeting called by the Labor department last May prompted ALPAP to go on strike last June 5.

PAL issued a return-to-work order the following day. This was followed by another order from the Labor department last June 7.

None of the pilots complied with the order. Of the 620 members, however, 200 have since returned to PAL either as new employees or as "re-hires."

Last Aug. 26, the National Labor Relations Commission (NLRC) sided with PAL and held legal the dismissal of the pilots who refused to follow its first return-to-work order.

ALPAP brought the case to the Supreme Court without filing a motion for reconsideration before the commission, thus violating the procedure on the exhaustion of legal remedies.

"The blatant error committed by NLRC prompted (us) to file this case... lest the issue become moot and academic," said ALPAP.

The union questioned before the High Tribunal PAL's continued refusal to accept the striking workers, in violation of the DoLE's June 7 order.

To make matters worse, ALPAP added, PAL continues to resort to an unfair labor practice of hiring returning strikers who have crossed the fence as "new hires".