Paseo de Coro

The trouble with PAL
By Fernando Fajardo
Cebu Daily News
First Posted 09:21:00 08/04/2010

PAL, Asia’s first airline, is not the only loser in its struggle with its departing pilots. In many ways, the whole nation is, meaning you and me, the business sector, including the government. The loss is going to be great to PAL for both its image and finances. PAL is already an internationally recognized Philippine brand that no longer needs much advertisements or introduction in order to sell. It may not be the best in Asia or the world but its name can already speak for itself as one of the best airlines in Asia. The recent fiasco damages PAL’s image.

The year before last, it was reported to have lost $298 million when international travel went down with the global recession. For its last fiscal year that ended in March, it was reported to have lost another $14 million. It may have been on the way to profitability this year but not anymore with the battering that it suffers with the departure of many of its pilots for better paying jobs in other airlines.

During the last couple of years, lack of tenure did not bother much the pilots given the limited opportunities in the airline industry as a result of the global recession. It is no longer true now when many airlines in the world are again sending their planes in the sky to meet an increased demand for more flights that comes with the global economic recovery, no matter how slow it is. Faced with low pay and insecurity of tenure, pilots should not be blamed by PAL for seeking greener pastures.

The trouble with PAL is that while it supposedly spent much on training its pilots, it did not offer much to its workers to entice them to stay put. Knowing what competition is, PAL should have known that without a good counter-offer, it could not hope to keep its pilots for long. In fact, it inadvertently prepared it pilots to leave by not making permanent their work status.

PAL is proud of its heritage and promise of a good future. It started in 1941 with a mission to serve as a partner in nation-building. Through the years, since the last World War, PAL was greatly involved in the country’s quest for progress by connecting the major centers of trade and commerce from Luzon in the north to the Visayas and Mindanao in the south and selected cities worldwide.

PAL says that with its every takeoff and touchdown, it also planted seeds of growth while making sure that its excellent service would win the hearts of the travelling public. That is supposed to be its trademark. But one thing PAL says it does not do is sit on its laurels. As a reward to its passengers for its success, PAL launched its “Call for excellence.” This included going into the new field of e-business to serves its clients better.

Perhaps the call for excellence or its excellence in serving its clients is PAL’s strongest asset and PAL is right to make the best of it. But this not is enough. What one can do with the best of its assets, such as excellence in service, will be also limited by one’s weakness, which in the case of PAL appears to be its poor relationships with its pilots and workers.

Retrenchment, contractualization, outsourcing and other labor cost saving measures may immediately improve PAL’s bottom line but at risk is the possibility of labor not also giving the best of what they can do, including leaving when the right opportunity comes.

Since the day the pilots left, PAL had to cancel a number of flights, troubling many travelers. PAL says it would do its best to keep flying but can its planes fly without the pilots? The better way is to win them back. Even before this latest fiasco, PAL had been losing a good number of its pilots, which I suspect was due to much lower pay and insecurity of tenure within PAL. How many did it lose? From the news reports, PAL said nine pilots resigned in 2003, 22 in 2004, 29 in 2005 and 15 in 2006.

We have already heard a lot about globalization. In order to compete one must be prepared to do what is necessary to keep the best workers and give the best service which may be possible only if you have the best workers.

That its pilots are leaving and its main workforce threatening a strike does not speak well of PAL as one of the best airlines in Asia. The damage is already done both for PAL and the rest of the country. The first attempt of P-Noy to help settle the issue was not fruitful.

PAL pays the best price for its airplanes. To fly them it must also strive to give the best price for its pilots and workers.

The trouble with PAL, like many of the Philippine businesses, is that when belt tightening is necessary, they tighten first the belts of their workers.

How do we get them to be loyal to the company and honest in their day’s work with that?