Thursday, 23 September 2010 00:00
The Philippine Airlines Employees’ Association (Palea) wants the government to reject the planned mass retrenchment of its members.
In a statement, Gerry Rivera, Palea president, said the service agreement between PAL and Skykitchen Philippines Inc., as well as the customer service agreement with ePLDT Ventus “violate the PAL-Palea collective bargaining agreement [CBA] by contracting out existing positions and jobs that are occupied and performed by regular employees.”
About 3,000 PAL employees will be affected by the planned retrenchment.
The Lucio Tan-led airline earlier forged a deal with these third party firms in an attempt to spin off non-core units to save on costs and stem losses.
Under the agreements, Sky-kitchen will take over PAL’s catering department while ePLDT Ventus will service the flag carrier’s call center operations.
Palea said it has yet to acquire a copy of the agreement with Sky-logistics, the company that will handle PAL’s ground and passenger handling.
The Department of Labor and Employment (Dole) assumed jurisdiction over the PAL-Palea dispute starting April in view of a notice of strike filed in January.
The union has a pending motion for reconsideration on Labor department’s decision to proceed with the layoff, which was issued by then acting Labor Secretary Romeo Lagman on June 1.
Rivera said that based on the documents obtained from PAL “it is crystal clear that the financial position of the company does not warrant the retrenchment of some 3,000 union members.
“PAL’s audited financial statements for the years 1997 up to 2007, as well as the supplement to the amended and restated rehabilitation plan, show that PAL successfully implemented its rehabilitation plan which belies its claims that its rehabilitation experience is the precursor of the crisis that it now allegedly confronts,” he said.
After PAL emerged from rehabilitation in 2007, Rivera said the company’s financial health was revealed by the expansion of its fleet. From 35 aircraft in 2008, the company’s fleet increased to 47 in 2009.
In a separate statement, PAL insisted that it posted “massive losses” amounting to $312 million in the last two years because of the global recession.
Besides the bad economy, the airline said high fuel prices, the unabated liberalization of the commercial aviation industry, and the recent blacklisting of Philippine carriers by the European Union forced the company to implement the restructuring plan.
PAL said these factors rendered the company uncompetitive.
“While there is a noticeable increase in travel in recent months and a better income forecast by IATA [International Airline Transport Association], it doesn’t mean that PAL is out of the woods. To remain competitive in the future, it must strictly adhere to a survival plan that includes the spin-off of three noncore units,” PAL said.
The airline earlier reported a profit of $31.6 million from April to June, 11 percent lower than last year.
PAL attributed the earnings to the “usual strong demand during the summer vacation.”
The flag-carrier’s revenues went up by 30 percent to $426.7 million for the first quarter of its fiscal year 2010 to 2011.
Darwin G. Amojelar
Monday, November 22, 2010
PAL union decries job contracting
Friday, 13 August 2010 00:00
BY JOMAR CANLAS REPORTER
Members of the Philippine Airlines Employees’ Association (Palea) and the Partido ng Manggagawa (PM) picketed the Department of Labor and Employment (DOLE) office in Manila on Thursday to ask the agency to tighten regulations and plug loopholes that have allowed employers to massively supplant regular workers with contractual labor.
Gerry Rivera, Palea president and PM vice chairman, said that the management of PAL should cease from contracting out jobs, adding that they will go on strike if the flag carrier continues to do so.
“Our job is our life and if necessary we will strike to defend our livelihood for the sake of our families,” he added.
On Thursday, the Labor department held a mediation meeting between the representatives of Palea and PAL management. A previous mediation failed to settle differences between the two sides.
PAL’s ongoing labor dispute with its ground crew stems from the planned contracting out of jobs that will lead to the layoff of some 3,000 employees.
Workers in airport services, in-flight catering and ticketing reservations will be retrenched and then rehired as contractuals in service providers also owned by Lucio Tan.
Under such arrangement, the rehired workers will not enjoy job security and may be forced to work for a smaller pay.
Complex situation
PAL’s dispute with its ground crew union is compounded by the departure of some 25 pilots who opted to join foreign airlines that had offered them much higher pay.
“PAL is faced with a three-front war with its airline pilots, flight crew and ground personnel because of its drive to demolish job security, replace regular employees with contractual workers and bust the remaining unions in the company. We are asking the government of [President Benigno Aquino 3rd] through Labor Secretary Rosalinda Baldoz to review the policy on contractualization and strengthen protection for job security or else it faces a wave of labor unrest,” said Renato Magtubo, the PM chairman.
The mediation meeting on Thursday arose from Palea’s pending motion for reconsideration of former Acting Labor Secretary Romeo Lagman’s “midnight decision” that affirmed PAL management’s prerogative to contract out the jobs of its ground crew.
“We welcome the preference of Secretary Baldoz to mediate the dispute on job contracting in PAL, unlike Lagman who unilaterally issued a ‘midnight decision’ favoring the management. But even as we negotiate in good faith, we have to be prepared for all eventualities including the necessity to strike if the planned layoff pushes through,” Magtubo said.
PAL President Jaime Bautista said that the primary issue at hand is whether the contracting out of jobs was illegal.
But he added that outsourcing is a valid exercise of management prerogative.
On Palea’s strike threat, Bautista said that whatever the union would do must be within the bounds of the law.
BY JOMAR CANLAS REPORTER
Members of the Philippine Airlines Employees’ Association (Palea) and the Partido ng Manggagawa (PM) picketed the Department of Labor and Employment (DOLE) office in Manila on Thursday to ask the agency to tighten regulations and plug loopholes that have allowed employers to massively supplant regular workers with contractual labor.
Gerry Rivera, Palea president and PM vice chairman, said that the management of PAL should cease from contracting out jobs, adding that they will go on strike if the flag carrier continues to do so.
“Our job is our life and if necessary we will strike to defend our livelihood for the sake of our families,” he added.
On Thursday, the Labor department held a mediation meeting between the representatives of Palea and PAL management. A previous mediation failed to settle differences between the two sides.
PAL’s ongoing labor dispute with its ground crew stems from the planned contracting out of jobs that will lead to the layoff of some 3,000 employees.
Workers in airport services, in-flight catering and ticketing reservations will be retrenched and then rehired as contractuals in service providers also owned by Lucio Tan.
Under such arrangement, the rehired workers will not enjoy job security and may be forced to work for a smaller pay.
Complex situation
PAL’s dispute with its ground crew union is compounded by the departure of some 25 pilots who opted to join foreign airlines that had offered them much higher pay.
“PAL is faced with a three-front war with its airline pilots, flight crew and ground personnel because of its drive to demolish job security, replace regular employees with contractual workers and bust the remaining unions in the company. We are asking the government of [President Benigno Aquino 3rd] through Labor Secretary Rosalinda Baldoz to review the policy on contractualization and strengthen protection for job security or else it faces a wave of labor unrest,” said Renato Magtubo, the PM chairman.
The mediation meeting on Thursday arose from Palea’s pending motion for reconsideration of former Acting Labor Secretary Romeo Lagman’s “midnight decision” that affirmed PAL management’s prerogative to contract out the jobs of its ground crew.
“We welcome the preference of Secretary Baldoz to mediate the dispute on job contracting in PAL, unlike Lagman who unilaterally issued a ‘midnight decision’ favoring the management. But even as we negotiate in good faith, we have to be prepared for all eventualities including the necessity to strike if the planned layoff pushes through,” Magtubo said.
PAL President Jaime Bautista said that the primary issue at hand is whether the contracting out of jobs was illegal.
But he added that outsourcing is a valid exercise of management prerogative.
On Palea’s strike threat, Bautista said that whatever the union would do must be within the bounds of the law.
Government steps into PAL’s problem on retiring pilots
Monday, 02 August 2010 00:00
BY DARWIN G. AMOJELAR SENIOR REPORTER
PASSENGERS of Philippine Airlines (PAL) may continue experiencing delays of flights at least a week more even if the country’s flag carrier demanded its more than two dozen pilots to return to work. In a statement, the Lucio Tan-owned airline carrier rejected the resignation of its pilots and called on them to respect their existing contracts.
Meanwhile, Department of Transportation and Communications Secretary Jose de Jesus has tasked the Civil Aviation Authority of the Philippines to help resolve the problem in the country’s flag carrier, which was forced to cancel at least 11 flights on Saturday, supposedly because of the lack of pilots.
According to a source from the Transportation and Communication department, de Jesus was instructed by President Benigno Aquino 3rd to resolve the matter.
The airline demanded the pilots to immediately return to work or face civil, criminal and administrative charges.
On Sunday, PAL was again forced to cancel eight flights owing to the pilot shortage, but most affected passengers were accommodated in merged succeeding flights.
The eight cancelled flights include Manila-Cagayan-Manila; Manila-Bacolod-Manila; Manila-Iloilo-Manila; and Manila-Cebu-Manila.
“PAL makes sure that all passengers are attended to,” the airline said as it assured the public that it hopes to get schedules back to normal “within a week.”
In the last few days, PAL was forced to cancel several regional and domestic flights after 13 captains and 12 first officers flying its Airbus A319s and A320s resigned from the flag carrier.
They left without giving PAL ample time to train replacements,” the airline said in a statement.
Representatives of the Association of Airline Pilots of the Philippines were not available for comment as of press time.
PAL said many of the pilots did not show up for work and just handed in their resignation letters.
Some of them even owe PAL millions of pesos for the cost of their training.
The airline spends about P14 million to train each pilot for a period of 10 years.
“PAL doesn’t want to get in the way of its pilots’ dream of landing better paying jobs abroad, but they have contractual obligations with the company and a moral responsibility to thousands of passengers,” PAL said.
Pirated by other airlines
The airline added that most of the resigned pilots were reportedly “pirated” by other carriers in the Asian region including the Middle East where the pay is allegedly two or three times their current salaries.
“By Philippine standards, an Airbus A320 pilot’s pay at PAL is considered ‘high’. But it’s still no match to the offer of foreign carriers. Our problem is, our competitors abroad seem to prefer PAL pilots because they were highly-trained by PAL and renowned for their flying skills,” PAL said.
PAL earlier said that a local pilot only received a salary of $2,000 to $3,000 compared to the $8,000 to $12,000 a month that the foreign airlines offer.
Considered “Mission Critical Skills,” PAL said pilots and aircraft mechanics are required by government regulations to give their local employers at least 180 days or six months to find suitable replacements before taking another job abroad.
PAL added it is talking to various government agencies like the Philippine Overseas Employment Administration and the Civil Aviation Authority of the
Philippines to avert the loss of more pilots to “poachers” abroad.
The airline also intensified the training of more pilots to fill the gap.
A total of 120 pilots from all local airlines left the country since 2000.
The country has more than 700 pilots, 450 of whom work for PAL.
But the militant group Partido ng Manggagawa (PM) and the ground crew union Philippine Airlines Employees’ Association (Palea) called on PAL
management not to file cases against the pilots who abruptly resigned.
“Think twice before swinging the Damocles sword on the heads of the pilots lest the company face a three-front war against all of its employees,” said Gerry Rivera, Palea president and PM vice chairman.
WITH REPORT FROM FRANCIS EARL A. CUETO
BY DARWIN G. AMOJELAR SENIOR REPORTER
PASSENGERS of Philippine Airlines (PAL) may continue experiencing delays of flights at least a week more even if the country’s flag carrier demanded its more than two dozen pilots to return to work. In a statement, the Lucio Tan-owned airline carrier rejected the resignation of its pilots and called on them to respect their existing contracts.
Meanwhile, Department of Transportation and Communications Secretary Jose de Jesus has tasked the Civil Aviation Authority of the Philippines to help resolve the problem in the country’s flag carrier, which was forced to cancel at least 11 flights on Saturday, supposedly because of the lack of pilots.
According to a source from the Transportation and Communication department, de Jesus was instructed by President Benigno Aquino 3rd to resolve the matter.
The airline demanded the pilots to immediately return to work or face civil, criminal and administrative charges.
On Sunday, PAL was again forced to cancel eight flights owing to the pilot shortage, but most affected passengers were accommodated in merged succeeding flights.
The eight cancelled flights include Manila-Cagayan-Manila; Manila-Bacolod-Manila; Manila-Iloilo-Manila; and Manila-Cebu-Manila.
“PAL makes sure that all passengers are attended to,” the airline said as it assured the public that it hopes to get schedules back to normal “within a week.”
In the last few days, PAL was forced to cancel several regional and domestic flights after 13 captains and 12 first officers flying its Airbus A319s and A320s resigned from the flag carrier.
They left without giving PAL ample time to train replacements,” the airline said in a statement.
Representatives of the Association of Airline Pilots of the Philippines were not available for comment as of press time.
PAL said many of the pilots did not show up for work and just handed in their resignation letters.
Some of them even owe PAL millions of pesos for the cost of their training.
The airline spends about P14 million to train each pilot for a period of 10 years.
“PAL doesn’t want to get in the way of its pilots’ dream of landing better paying jobs abroad, but they have contractual obligations with the company and a moral responsibility to thousands of passengers,” PAL said.
Pirated by other airlines
The airline added that most of the resigned pilots were reportedly “pirated” by other carriers in the Asian region including the Middle East where the pay is allegedly two or three times their current salaries.
“By Philippine standards, an Airbus A320 pilot’s pay at PAL is considered ‘high’. But it’s still no match to the offer of foreign carriers. Our problem is, our competitors abroad seem to prefer PAL pilots because they were highly-trained by PAL and renowned for their flying skills,” PAL said.
PAL earlier said that a local pilot only received a salary of $2,000 to $3,000 compared to the $8,000 to $12,000 a month that the foreign airlines offer.
Considered “Mission Critical Skills,” PAL said pilots and aircraft mechanics are required by government regulations to give their local employers at least 180 days or six months to find suitable replacements before taking another job abroad.
PAL added it is talking to various government agencies like the Philippine Overseas Employment Administration and the Civil Aviation Authority of the
Philippines to avert the loss of more pilots to “poachers” abroad.
The airline also intensified the training of more pilots to fill the gap.
A total of 120 pilots from all local airlines left the country since 2000.
The country has more than 700 pilots, 450 of whom work for PAL.
But the militant group Partido ng Manggagawa (PM) and the ground crew union Philippine Airlines Employees’ Association (Palea) called on PAL
management not to file cases against the pilots who abruptly resigned.
“Think twice before swinging the Damocles sword on the heads of the pilots lest the company face a three-front war against all of its employees,” said Gerry Rivera, Palea president and PM vice chairman.
WITH REPORT FROM FRANCIS EARL A. CUETO
PAL to spin off non-core units after losses
Monday, 19 April 2010 00:00
BY DARWIN G. AMOJELAR SENIOR REPORTER
BY DARWIN G. AMOJELAR SENIOR REPORTER
PHILIPPINE Airlines (PAL) will spin off its three non-core units next month, after incurring losses during its past two fiscal years. In a statement, the country’s flag-carrier, which is observing its 69th year in 2010, said the spin-off forms part of the next phase of the company’s restructuring program. The fresh restructuring program will start on May 31.
The affected units are in-flight catering services, airport services (including ground handling, cargo terminal/cargo handling, and ramp handling) and call center reservations.
PAL said the spin-off is being pursued in accordance with labor laws and the collective bargaining agreement between the company and the Philippine Airlines Employees Association (PALEA).
The airline, however, assured its customers that the implementation of its restructuring will cause no disruption of its operations.
It added that all domestic and international flights are being operated according to published departure and arrival times.
”All PAL offices and facilities in the Philippines and overseas remain open to serve customers. And all accredited travel agents continue to sell and honor PAL tickets,” the carrier said.
PAL said it is constrained to pursue the restructuring plan due to several factors beyond its control that include, among others:
• unabated liberalization of the commercial aviation industry to the detriment of local players like PAL;
•the worldwide economic recession that led to a crippling slowdown in passenger traffic;
• record-high oil prices in 2008-2009 and the continuing increase in the price of aviation fuel, which accounts for nearly half of PAL’s operating expenses;
• the downgrade of the Philippine aviation sector to Category II by the United States, preventing PAL from using brand new long-range aircraft or increasing flights to the U.S.; and
• the subsequent blacklisting of Philippine carriers by the European Union, ruining the reputation of even those airlines with outstanding safety records like PAL.
“PAL did its best to adjust to the harsh operating environment. It implemented a series of cost-cutting initiatives, including a manpower rationalization program in September 2009 that affected more than 400 executives and administrative employees,” the company said, adding that it restructured its organization and spun-off its maintenance and engineering department to Lufthansa Technik Philippines in 2000.
Besides the series of cost-cutting initiatives, PAL said it approached several investors but none were interested. To prove its point, the carrier cited the 20 airlines that filed for bankruptcy last year.
“We approached government for help but it, too, was in dire financial straits,” PAL said. The company said
its financial situation continued to deteriorate, as it incurred over $350-million, or at least P15-billion in losses during the last two fiscal years.
Its equity also dropped precipitously to a little over $1.1-million as of February this year, the airline said.
PAL earlier reported a net loss of $54.1 million during the second quarter of its fiscal year ending March from $158.1 million in the same period last year. To stave off failure and protect company assets, PAL said it had to act quickly.
“Given this grim scenario, PAL has no choice but to restructure. It must also sell and/or cease operations of non-core businesses since no airline in Asia, or the world for that matter, continue to operate non-core businesses. Moreover, PAL has to meet its huge outstanding obligations as they fall due to prevent creditors from taking over the business,” the carrier said.
PAL workers threaten strike, as rival readies expansion
Wednesday, 21 April 2010 00:00
BY DARWIN G. AMOJELAR Senior Reporter
AMID a huge job cut by its erstwhile rival, Cebu Pacific unveiled on Tuesday a more bullish outlook with a plan to ramp up its acquisition of aircraft.
“We’re seeing a strong domestic travel this year as well as the international market. The consumer confidence is recovering,” Lance Gokongwei, Cebu Pacific president and chief executive, told reporters in a briefing.
Gokongwei said the budget carrier expects to carry 10 million passengers this year from 8.7 million last year.
“We we’re able to sustain the growth despite the economic crisis that affected the Philippines and the entire world last year,” he said.
In the first quarter, Cebu Pacific has flown over 2.4 million passengers.
By 2013, Gokongwei expects the airline to carry 15.1 million passengers.
“Clearly, the low-fare product has been very good. In order to meet our passenger requirements and for us to offer more affordable fare we have to increase our capacity over the next five years,” he said.
Given this rosy outlook, Gokongwei said the company accelerated its firm order by seven to 22 Airbus A320s from the original 15.
The 22 brand new aircraft will cost about $1.4 billion and would be delivered starting this year until 2014.
The new aircraft will be used to serve Cebu Pacific’s new destinations in the Philippines and abroad.
“We are looking at Korea, China and Japan,” Gokongwei said.
He said the purchase of new aircraft will be financed through internally generated funds, the European Export Credit Agency and the proceeds of Cebu Pacific’s long-delayed initial public offering (IPO).
The carrier earlier announced the suspension of its IPO because of election jitters.
“We are considering an IPO at the right time, probably after the elections. It would be better to do it after elections,” Gokongwei said.
The company plans to raise as much as P25.7 billion at P95 per share.
It registered P7.2 billion in revenues in the first quarter this year, up 35 percent from last year.
“For the full year, we expect our revenues to grow at least 30 percent,” Gokongwei said.
Last year, Cebu Pacific’s was in the black at P3.26 billion, a complete turnaround from the previous year’s net loss of P3.26 billion.
Its revenues increased 18.4 percent to P23.31 billion from P19.68 billion in 2008.
In contrast, losses at its main rival, Philippine Airlines (PAL) widened last year. The flag carrier said its financial situation continued to deteriorate, as it incurred over $350 million, or at least P15 billion in losses during the last two fiscal years.
It had reported a net loss of $54.1 million during the second quarter of its fiscal year ending March from $158.1 million in the same period last year.
The airline had announced job cuts affecting half of its 7,500 workforce, and the sale of its non-core units, in a bid to keep the 69-year-old company afloat.
PAL management had said the airline is willing to pay a month’s salary for every year of service. The retrenchment tab will run up to P2.5 billion.
The affected workers belong to the in-flight catering services, airport services (including ground handling, cargo terminal/cargo handling, and ramp handling) and call center reservations.
In addition, the airline will let go of 500 more staff for the rationalization of its medical, information technology and human resource units.
PAL’s monthly salary expense runs from $13 million to $13.5 million. It expects to save about P500 million to P1 billion a year with the spin-off of its three non-core businesses.
On Tuesday, its workers’ union, however, warned that the group would file a notice of strike.
Gerardo Rivera, PAL Employees’ Association (PALEA) president, said the union will not accept the retrenchment package of PAL management.
“[Management] should convince us on the real financial status of the company,” Rivera told The Manila Times.
“We will revisit the pending notice of strike filed at the Department of Labor,” he said, referring to an earlier filing aimed at stopping PAL’s outsourcing plan.
PAL said it was forced to implement the restructuring plan because of the combined effects of the global recession, high fuel prices, the unabated liberalization of the commercial aviation industry, and the recent blacklisting of Philippine carriers by the European Union.
BY DARWIN G. AMOJELAR Senior Reporter
AMID a huge job cut by its erstwhile rival, Cebu Pacific unveiled on Tuesday a more bullish outlook with a plan to ramp up its acquisition of aircraft.
“We’re seeing a strong domestic travel this year as well as the international market. The consumer confidence is recovering,” Lance Gokongwei, Cebu Pacific president and chief executive, told reporters in a briefing.
Gokongwei said the budget carrier expects to carry 10 million passengers this year from 8.7 million last year.
“We we’re able to sustain the growth despite the economic crisis that affected the Philippines and the entire world last year,” he said.
In the first quarter, Cebu Pacific has flown over 2.4 million passengers.
By 2013, Gokongwei expects the airline to carry 15.1 million passengers.
“Clearly, the low-fare product has been very good. In order to meet our passenger requirements and for us to offer more affordable fare we have to increase our capacity over the next five years,” he said.
Given this rosy outlook, Gokongwei said the company accelerated its firm order by seven to 22 Airbus A320s from the original 15.
The 22 brand new aircraft will cost about $1.4 billion and would be delivered starting this year until 2014.
The new aircraft will be used to serve Cebu Pacific’s new destinations in the Philippines and abroad.
“We are looking at Korea, China and Japan,” Gokongwei said.
He said the purchase of new aircraft will be financed through internally generated funds, the European Export Credit Agency and the proceeds of Cebu Pacific’s long-delayed initial public offering (IPO).
The carrier earlier announced the suspension of its IPO because of election jitters.
“We are considering an IPO at the right time, probably after the elections. It would be better to do it after elections,” Gokongwei said.
The company plans to raise as much as P25.7 billion at P95 per share.
It registered P7.2 billion in revenues in the first quarter this year, up 35 percent from last year.
“For the full year, we expect our revenues to grow at least 30 percent,” Gokongwei said.
Last year, Cebu Pacific’s was in the black at P3.26 billion, a complete turnaround from the previous year’s net loss of P3.26 billion.
Its revenues increased 18.4 percent to P23.31 billion from P19.68 billion in 2008.
In contrast, losses at its main rival, Philippine Airlines (PAL) widened last year. The flag carrier said its financial situation continued to deteriorate, as it incurred over $350 million, or at least P15 billion in losses during the last two fiscal years.
It had reported a net loss of $54.1 million during the second quarter of its fiscal year ending March from $158.1 million in the same period last year.
The airline had announced job cuts affecting half of its 7,500 workforce, and the sale of its non-core units, in a bid to keep the 69-year-old company afloat.
PAL management had said the airline is willing to pay a month’s salary for every year of service. The retrenchment tab will run up to P2.5 billion.
The affected workers belong to the in-flight catering services, airport services (including ground handling, cargo terminal/cargo handling, and ramp handling) and call center reservations.
In addition, the airline will let go of 500 more staff for the rationalization of its medical, information technology and human resource units.
PAL’s monthly salary expense runs from $13 million to $13.5 million. It expects to save about P500 million to P1 billion a year with the spin-off of its three non-core businesses.
On Tuesday, its workers’ union, however, warned that the group would file a notice of strike.
Gerardo Rivera, PAL Employees’ Association (PALEA) president, said the union will not accept the retrenchment package of PAL management.
“[Management] should convince us on the real financial status of the company,” Rivera told The Manila Times.
“We will revisit the pending notice of strike filed at the Department of Labor,” he said, referring to an earlier filing aimed at stopping PAL’s outsourcing plan.
PAL said it was forced to implement the restructuring plan because of the combined effects of the global recession, high fuel prices, the unabated liberalization of the commercial aviation industry, and the recent blacklisting of Philippine carriers by the European Union.
'PAL secures green light on planned retrenchment
Monday, 21 June 2010 00:00
PHILIPPINE Airlines (PAL) said it has secured government approval of a planned retrenchment brought about by the spin off of its three non-core units. In a statement, the flag carreir said the decision of the Department of Labor and Employment (DOLE) recognizes the company’s financial troubles and the need to spin-off none-core services as part of its survival strategy.
The affected units are in-flight catering services, airport services (including ground handling, cargo terminal/cargo handling, and ramp handling) and call center reservations.
PAL had said that the spin off will entail letting go some 3,500 out of its 7,500 workforce.
The planned retrenchment was originally set on May 31, but was suspended after the Labor department assumed jurisdiction over a simmering dispute between PAL management and labor unions.
“With [the] DOLE decision, PAL must now focus on the tough challenge of surviving the crisis and competing amidst a difficult operating environment. To do this, PAL must implement various revenue enhancement and cost control initiatives that includes outsourcing,” the Lucio Tan-owned airline said.
The carrier said the PAL Employee Association (PALEA) will appeal the department decision.
The company said airline operations remain normal, with its domestic and international flights operated according to published schedules.
The airline will outsource its call center reservations to ePLDT Ventus, which would handle reservations, inquiries, bookings, disruption handling, back-office services and other call center services.
PAL’s catering services will be handled by SkyKitchen Philippines, which is owned by businessman Manuel Osmeña.
The airline caterer provides in-flight meals for Cathay Pacific, Qatar and Cebu Pacific.
PAL’s cargo handling would be outsourced to Sky Logistics.
In addition, PAL will rationalize its medical, information technology and human resource units so it can let go of 500 more employees.
The cost-cutting measures would save the company about P500 million to P1 billion a year. PAL is setting aside P2 billion to P2.5 billion to compensate the displaced workers.
PAL was forced to implement the restructuring plan because of the combined effects of the global recession, high fuel prices, the unabated liberalization of the commercial aviation industry, and the recent blacklisting of Philippine carriers by the European Union.
Because of this, PAL’s financial situation continued to deteriorate, as it incurred over $350 million, or at least P15 billion in losses during the last two fiscal years.
Its equity also dropped precipitously to a little over $1.1 million as of February this year, the airline said.
PAL earlier reported a net loss of $54.1 million during the second quarter of its fiscal year ending March from $158.1 million in the same period last year.
DARWIN G. AMOJELAR
PHILIPPINE Airlines (PAL) said it has secured government approval of a planned retrenchment brought about by the spin off of its three non-core units. In a statement, the flag carreir said the decision of the Department of Labor and Employment (DOLE) recognizes the company’s financial troubles and the need to spin-off none-core services as part of its survival strategy.
The affected units are in-flight catering services, airport services (including ground handling, cargo terminal/cargo handling, and ramp handling) and call center reservations.
PAL had said that the spin off will entail letting go some 3,500 out of its 7,500 workforce.
The planned retrenchment was originally set on May 31, but was suspended after the Labor department assumed jurisdiction over a simmering dispute between PAL management and labor unions.
“With [the] DOLE decision, PAL must now focus on the tough challenge of surviving the crisis and competing amidst a difficult operating environment. To do this, PAL must implement various revenue enhancement and cost control initiatives that includes outsourcing,” the Lucio Tan-owned airline said.
The carrier said the PAL Employee Association (PALEA) will appeal the department decision.
The company said airline operations remain normal, with its domestic and international flights operated according to published schedules.
The airline will outsource its call center reservations to ePLDT Ventus, which would handle reservations, inquiries, bookings, disruption handling, back-office services and other call center services.
PAL’s catering services will be handled by SkyKitchen Philippines, which is owned by businessman Manuel Osmeña.
The airline caterer provides in-flight meals for Cathay Pacific, Qatar and Cebu Pacific.
PAL’s cargo handling would be outsourced to Sky Logistics.
In addition, PAL will rationalize its medical, information technology and human resource units so it can let go of 500 more employees.
The cost-cutting measures would save the company about P500 million to P1 billion a year. PAL is setting aside P2 billion to P2.5 billion to compensate the displaced workers.
PAL was forced to implement the restructuring plan because of the combined effects of the global recession, high fuel prices, the unabated liberalization of the commercial aviation industry, and the recent blacklisting of Philippine carriers by the European Union.
Because of this, PAL’s financial situation continued to deteriorate, as it incurred over $350 million, or at least P15 billion in losses during the last two fiscal years.
Its equity also dropped precipitously to a little over $1.1 million as of February this year, the airline said.
PAL earlier reported a net loss of $54.1 million during the second quarter of its fiscal year ending March from $158.1 million in the same period last year.
DARWIN G. AMOJELAR
Palace hands off in PAL labor case
Wednesday, 03 November 2010 00:00
BY CRIS G. ODRONIA REPORTER
MalacaÑang on Tuesday said that it will not intervene in the Labor department’s recent decision that allowed the mass layoff of some 2,600 workers of the country‘s flag-carrier Philippine Airlines (PAL). Workers to be affected by the wholesale dismissal staged a rally at the Mendiola Bridge in Manila near the Palace also on Tuesday and called on the government to reverse the department’s ruling.
They will be laid off to make way for outsourcing of their jobs to other firms that will absorb them.
During a briefing in Malacañang, deputy spokesman Abigail Valte advised the affected workers to avail of remedies available to them under the law.
“I understand also the sentiments of the Palea [PAL Employees’ Association] employees but having said that, there are legal ways of redress. From what I understand, they can file a motion for reconsideration and then, eventually, they can appeal the decision of the Department of Labor and Employment,” she said.
Valte added that the Labor department’s decision was based on the law.
Labor Secretary Rosalinda Baldoz upheld a previous order of her predecessor, Romeo Lagman, allowing PAL to outsource three non-core business units, a move that will result in the mass layoff of PAL workers.
But Baldoz also assured that the affected PAL employees will not be “jobless” because outsourcing companies will take them in.
Hundreds of ground workers of PAL took to the streets to urge President Benigno Aquino 3rd to stop the flag-carrier from outsourcing their jobs to other companies.
Riot police blocked a road leading to Malacañang when 500 Palea members marched toward President Aquino’s office to call on him to reverse the ruling that the Labor department handed down over the weekend.
“We stand to lose our jobs, and many of us have invested our lives [in] the airline,” Palea President Gerry Rivera told Agence France-Presse.
“The President can always reverse the unlawful decision, because the Labor department is an extension of his office,” he said.
The union still can seek redress by, for one, filing a motion for reconsideration or bringing the case to court, a move its leaders are now looking into.
Respect for ruling
PAL President Jaime Bautista called on the ground staff to respect the ruling and warned them against walking out and disrupting operations.
He told local television that the airline planned to implement its outsourcing plan for ground crew in consultation with the union to ensure a smooth transition.
“There is process that we will have to follow and we will have to submit and tender notices, and we want them [ground crew] to accept this,” Bautista said.
The Labor department decision said that PAL must guarantee that staff who are dismissed are given a fair severance pay and they should also be absorbed by the outsourcing companies.
But Rivera told Agence France-Presse that the union planned to sue PAL and continue its street protests.
The employees, he said, are concerned about their salaries and benefits if they are forced to leave PAL.
The protesters later ate a meal of dried fish in front of Malacañang, symbolizing the poverty they said they would face if PAL went ahead with its plans.
The dispute with the ground staff, one of three restive unions within the airline, is the latest in a string of setbacks for PAL.
Last month, the government stopped a planned strike by cabin crew who were demanding higher wages and a lifting of a company policy that forces female attendants to retire when they reach 40.
The Labor department is set to rule on that case this month after it ordered the two sides to submit to arbitration.
In August, 25 pilots and first officers on PAL’s short-haul aircraft suddenly resigned for higher paying jobs abroad, forcing the abrupt cancellation of several flights.
WITH REPORT FROM AFP
BY CRIS G. ODRONIA REPORTER
MalacaÑang on Tuesday said that it will not intervene in the Labor department’s recent decision that allowed the mass layoff of some 2,600 workers of the country‘s flag-carrier Philippine Airlines (PAL). Workers to be affected by the wholesale dismissal staged a rally at the Mendiola Bridge in Manila near the Palace also on Tuesday and called on the government to reverse the department’s ruling.
They will be laid off to make way for outsourcing of their jobs to other firms that will absorb them.
During a briefing in Malacañang, deputy spokesman Abigail Valte advised the affected workers to avail of remedies available to them under the law.
“I understand also the sentiments of the Palea [PAL Employees’ Association] employees but having said that, there are legal ways of redress. From what I understand, they can file a motion for reconsideration and then, eventually, they can appeal the decision of the Department of Labor and Employment,” she said.
Valte added that the Labor department’s decision was based on the law.
Labor Secretary Rosalinda Baldoz upheld a previous order of her predecessor, Romeo Lagman, allowing PAL to outsource three non-core business units, a move that will result in the mass layoff of PAL workers.
But Baldoz also assured that the affected PAL employees will not be “jobless” because outsourcing companies will take them in.
Hundreds of ground workers of PAL took to the streets to urge President Benigno Aquino 3rd to stop the flag-carrier from outsourcing their jobs to other companies.
Riot police blocked a road leading to Malacañang when 500 Palea members marched toward President Aquino’s office to call on him to reverse the ruling that the Labor department handed down over the weekend.
“We stand to lose our jobs, and many of us have invested our lives [in] the airline,” Palea President Gerry Rivera told Agence France-Presse.
“The President can always reverse the unlawful decision, because the Labor department is an extension of his office,” he said.
The union still can seek redress by, for one, filing a motion for reconsideration or bringing the case to court, a move its leaders are now looking into.
Respect for ruling
PAL President Jaime Bautista called on the ground staff to respect the ruling and warned them against walking out and disrupting operations.
He told local television that the airline planned to implement its outsourcing plan for ground crew in consultation with the union to ensure a smooth transition.
“There is process that we will have to follow and we will have to submit and tender notices, and we want them [ground crew] to accept this,” Bautista said.
The Labor department decision said that PAL must guarantee that staff who are dismissed are given a fair severance pay and they should also be absorbed by the outsourcing companies.
But Rivera told Agence France-Presse that the union planned to sue PAL and continue its street protests.
The employees, he said, are concerned about their salaries and benefits if they are forced to leave PAL.
The protesters later ate a meal of dried fish in front of Malacañang, symbolizing the poverty they said they would face if PAL went ahead with its plans.
The dispute with the ground staff, one of three restive unions within the airline, is the latest in a string of setbacks for PAL.
Last month, the government stopped a planned strike by cabin crew who were demanding higher wages and a lifting of a company policy that forces female attendants to retire when they reach 40.
The Labor department is set to rule on that case this month after it ordered the two sides to submit to arbitration.
In August, 25 pilots and first officers on PAL’s short-haul aircraft suddenly resigned for higher paying jobs abroad, forcing the abrupt cancellation of several flights.
WITH REPORT FROM AFP
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