Biz Buzz: Fighting manipulation

By: the staff
Philippine Daily Inquirer
1:09 am | Wednesday, June 22nd, 2011

Spend money to make money

Philippine Airlines may be back in the black this year, but that doesn’t mean the flag carrier is about to start taking it easy.

Apart from its much-talked-about efforts to streamline its sometimes cumbersome cost structure inherited from its days as a government-owned firm, PAL is also trying to improve its revenue profile.

One particular area of interest for the airline is its lucrative trans-Pacific route which, according to our source, accounts for the biggest share of PAL’s revenue pie, but also has some of the slimmest profit margins.

To improve this, PAL not only needs to fly more passengers but it has to be able to do this more efficiently by using its brand-new Boeing 777 jets for its Manila-Los Angeles and Manila-San Francisco services (something currently prohibited by US government “Category 2” restrictions).

So PAL isn’t sitting around while waiting for this elusive upgrade to Category 1. In fact, PAL began last month paying for the services of a world-renowned aviation consultant, Tim Neel, whose specialty is getting downgraded countries upgraded to Category 1 status.

No, Tim Neel isn’t advising PAL, as the airline has always been up to par with international standards. The airline is paying him solely to help the government-run Civil Aviation Authority of the Philippines. That’s how important this is for PAL’s sustained profitability.—Daxim L. Lucas

Birds strike instead of PAL employees

SPY BITS By Babe Romualdez (The Philippine Star) Updated April 19, 2011 12:00 AM

Last Friday, PAL’s brand new Boeing 777 got struck by a bird shortly before landing at the Vancouver International Airport. Fortunately, no one got hurt, but chaos and havoc naturally reigned when the plane’s return flight PR 117 to Manila had to be cancelled. The incident inevitably made PAL’s flight PR 107 from Las Vegas via Vancouver to become overbooked for its return flight to Manila. As of this writing, PAL’s Boeing 777 is still on the ground waiting for an engine howling part to be replaced. Unbelievably, the said part could not be secured immediately despite the fact that Boeing’s Everett factory in Washington state is just a hop away across the border from Vancouver.

 While PAL has been able to avert strike threats from employees after talks brokered by the Department of Labor and Employment repeatedly failed, it seems the flag carrier can’t do much about bird strikes. The fowl that hit the plane was most likely a Canadian goose, but the real albatross that hangs on the head of PAL is the fact that their brand new Boeing 777 jets are still barred from entering the United States because for some unknown reason, the Philippines’ category 2 rating from the Federal Aviation Authority has not been lifted despite the fact that the issues involved have nothing to do with PAL’s excellent safety and maintenance record – which certainly is better than most US airlines.

In any case, climate change and early bird migration is probably the reason why there seems to be a growing incidence of bird strikes reported in the western hemisphere. Also recently, a Cathay Pacific flight from Hong Kong bound for San Francisco had to be diverted to Vancouver because the plane hit a flock of birds. There has been some conjecture about the design of Boeing’s engines due to several bird strike incidents showing the birds being sucked in and getting rotated in the engine fan blades, thereby causing what is called a cascading failure. According to experts, this type of bird strike, which is also called “avian ingestion” for obvious reasons, mostly happens during takeoff when the plane is on a low altitude and the engine is turning at a very rapid rate.

These bird strikes have caused a lot of damage to the whole airline industry estimated at $1.2 billion yearly. This is also probably the worst time of the year for airlines because a lot of bird migration occurs due to seasonal changes with spring now heralding a much warmer weather.

It can be recalled that in 2009, a domestic US Airways flight 1549 (from La Guardia airport in New York and headed for North Carolina) suffered total engine failure six minutes after takeoff when a flock of Canadian geese hit the engines. The pilot, Captain Chesley “Sully” Sullenberger, successfully ditched his aircraft over the Hudson River with no casualties whatsoever – an unprecedented feat that turned him into a hero. The incident has since been called the “Miracle on the Hudson,” and consequently described as “the most successful ditching in aviation history.” Captain Sully has since retired from US Airways a year after the incident but continues to be an active airline safety advocate.

The incident also triggered calls for the Federal Aviation Authority to similarly ditch its proposal that would prevent access to a critical database on the number of bird strikes that have been happening. The public outcry to release such records compelled US president Barack Obama to release a memo which partly read, “The government should not keep information confidential merely because public officials might be embarrassed by disclosure, because errors and failures might be revealed, or because of speculative or abstract fears.”

Lorenzo’s oil

With the recent filing of plunder charges against former Agriculture Secretary Luis “Cito” Lorenzo by the Office of the Ombudsman, you would think the former Cabinet Official would be losing most of his friends overnight. Fortunately for Cito, a number of his friends have decided to rally behind him because many of them strongly feel that he is just being made a scapegoat. Close friends of the former Agriculture Secretary vowed to keep the “oil” burning until he is completely exonerated and cleared of all the charges.

Not-so-holy alliance

Opposition Congressman and RH bill main proponent Edcel Lagman found himself in a “not-so-holy” alliance with President Noynoy Aquino who recently declared at the UP graduation exercises that he is determined to push the Reproductive Health bill despite the threat of excommunication by the Catholic Church. A number of people who did not vote for P-Noy have also decided to take a stand and rally behind the beleaguered president. They, too, are ready “to be excommunicated” – or so they declare!

Spy Tidbit

– Former president Joseph Estrada celebrated his 74th birthday with former cabinet officials and a small group of friends at his new condo penthouse unit in Mandaluyong. Erap has definitely decided to sell his house in Polk St. in Greenhills, San Juan. Like most retirees, the former president has also decided to downsize.

Spy Bits note: We will be taking time off for the Holy Week starting this Thursday and will be back next Tuesday. Have a blessed Holy Week!

Good news and bad news on tourism

DEMAND AND SUPPLY
By Boo Chanco
(The Philippine Star)
Updated April 18, 2011 12:00 AM

Mabuhay

One of the incentives to take at least one regional flight on Philippine Airlines monthly is the chance to read and maybe take home a copy of Mabuhay, its excellent in-flight magazine. Edited by Jun Ventura, it had been perhaps the best promoter of Philippine tourism through the years. Its excellent photography and articles always make a Pinoy reader proud of his country. And for foreigners, it gives many compelling reasons to visit.

The April issue I had the chance to read on my flight last Wednesday is particularly interesting. Jun’s special feature on Davao provides a lot of information the typical Metro Manilan probably didn’t know about the wonders of this major metropolis in the south. Also laudable are the stories on Antique and CamSur. One wonders why the tourism sections of the major broadsheets don’t have features as colorful and compelling as Mr. Ventura’s Mabuhay.

Maybe the Department of Tourism and PAL can work together to give more exposure to this magazine as part of a good tourism promotions program. PAL should consider making the magazine available in the bookstores and hotel lobby shops. That could help increase traffic to our tourist sites and I guess, PAL ticket sales. Mabuhay could also be a very effective selling tool for our tourism attaches abroad.

My congratulations to Jun V for this great work.

PAL unions must recognize market reality

The Philippine Star
April 11, 2011
DEMAND AND SUPPLY By Boo Chanco

I don’t know if the PAL rank and file union will strike this Holy Week to cause maximum headache to management even if it will guarantee maximum inconvenience to passengers out for a Holy Week break. Those of us whose holiday excursions involve a flight with PAL should probably have a Plan “B” just in case. I asked the Cebu Pacific people if they will honor a PAL ticket in such an emergency and they said they will be happy to do that but PAL must ask first. They have apparently offered in the past and got no reply from PAL. They are also almost fully booked by now for Holy Week.

Our poor flag carrier, Asia’s first, had been getting it pretty bad from their unions in recent weeks. They should all be working together instead. Everyone in PAL should realize that they are no longer the country’s number one airline, at least not in terms of number of passengers flown last year. They are now just number two and that’s why they must try even harder to please. Cebu Pacific is now the country’s largest carrier. Based on government statistics, Cebu Pacific last year flew 10,036,503 local and international passengers to PAL’s 9,259,982. In the domestic market, Cebu Pacific leads with 7,972,659 passengers to PAL’s 5,311,168. PAL still leads Cebu Pacific in the international market.

And guess what? Cebu Pacific flew more passengers with less staff. Cebu Pacific has 4,000 people working for it, about half of that are outsourced. The 2,000 staff members outsourced by Cebu Pacific are holding the same positions that PAL wants to outsource. There is just no way for PAL to continue to have 7,000 employees on its payroll. Aviation market conditions have changed so much and the older airlines, not just PAL, must do something about their so-called legacy costs or just simply lose out to more nimble competitors like Cebu Pacific.

The conditions just got tougher with our unilateral Open Skies declaration. There will be more regional budget airlines taking to our skies and it is important that PAL’s cost structure becomes more comparable to theirs. My Singapore-based son was able to fly to Manila on a whim one weekend on a roundtrip ticket costing him $150 on Tiger Air. I know PAL is trying to match such cut-throat competitors with $250 tickets but its ability to do so on a sustained basis is questionable unless it revamps its cost structure.

In the end, PAL must be financially viable for all its employees to continue to have jobs. If they are able to restructure PAL’s cost, a good part of the present employee force will continue to have jobs in the airline. But if they strike and PAL folds up, everything and everyone goes down the drain. Cebu Pacific, on the other hand, has already invested a billion dollars and planning to invest more.

Business organizations evolve and change in response to market conditions. That’s all there is to it. PAL’s present structure may have worked in the past when it was a monopoly. That is no longer the case. And there is no national interest that can justify a government takeover to save PAL. It is survival of the fittest in the marketplace and PAL is too financially unfit to survive the challenge of Cebu Pacific, Tiger Air, Air Asia and all those new budget carriers whose price structures we love as consumers. The PAL unions must help win this competitive challenge not by striking but by agreeing to restructure the airline.

Coloma

I received a reaction from Secretary Sonny Coloma to our column last week on the CommGroup. Here are relevant excerpts of his e-mail.

It is sad that you would claim that “(I) have no experience in public relations,” considering that we have known each other since the early seventies.  We were colleagues in the International Association of Business Communicators (IABC) when you were working with PNOC and I was employed by Far East Bank and Trust Company.

The field of public relations spans several publics: an organization’s clients or customers, its own employees, government, mass media, and other stakeholders.  I served as vice president and head of Far East Bank’s corporate relations department and also of its employee relations (including employee communication) department during my ten-year stint with the bank.

When I joined the Asian Institute of Management (AIM) as a professor in 1988, I introduced an elective entitled Corporate Public Communication, which is all about public relations. In fact, you were my preferred resource person on the topic of issues management.  Other PR professionals can attest to the fact that I have designed and delivered a practitioner-oriented course on public relations in keeping with AIM’s academic standards.

My response: It is true that we organized the Philippine chapter of IABC in the early 80s. It is also true that I knew about Sonny’s PR course at AIM. In fact, I think I was his guest lecturer a couple of times. I thought of mentioning both items when I was writing my column but later on decided both facts were irrelevant. The point I was trying to make was the fact that Sonny didn’t have the kind of PR experience required of his current job. Issue management and Crisis Management are two of the more relevant skills needed at the Palace that can only be had by actual experience.

 And while Sonny can say he is familiar with PR concepts from an academic perspective… that is not nearly enough. This lack of experience would have been mitigated if he had actual media experience. That would have enabled him to think like a reporter or an editor and thus be able to serve media’s information needs better as well as tweak his material to better catch media attention.

 I have always been impressed with the fact that your columns are research-based. However, you might have been misinformed because, not a single centavo of appropriation

 is provided in the national budget for Channels 4, 9, and 13.  The charter or law that created the People’s Television Network, Inc. (PTNI) does not allow Channel 4 to receive an annual appropriation from the national government. Channels 9 and 3 are also sequestered entities that are not entitled to budgetary support from the government.

The Presidential Communications Operations Office (PCOO) that I head has a total budget of 976 million pesos for 2011 which is lower than the 2010 outlay of 1.16 billion pesos.  Only about half of this amount is allotted for mass media: 293 million for the Bureau of Broadcast Services and 250 million for the Philippine Information Agency that has a field network of regional and provincial offices.  When our budget for 2012 is presented anew to both houses of Congress, I am mindful that I will have to justify all items of expenses for personal services, maintenance and other operating expenses, as well as for capital outlays. This is in accordance with President Aquino’s policy on zero-based budgeting, to ensure that every centavo of the taxpayers’ money is properly spent.

My response: That’s more resources than most PR professionals get to spread their good news. The budget aside, Channel 4 could have more impact if used to provide what we cannot expect from the commercial networks. Maybe you can work out a deal with Armida Siguion Reyna to show her well produced cultural show Aawitan Kita. Or show some of the cultural features in the tourism channel. Our current generation of Pinoys must be exposed to our rich cultural heritage. Or maybe, Channel 4 can air curriculum based educational programs during school days. Knowledge Channel is doing it now but only reaches those schools with cable or satellite connections. The thing is, make Channel 4 useful. Trying to imitate what the networks are already doing in news and entertainment is a waste of resources.

(Note: Sonny also responded to my suggestions on social media. I need space to tackle those in a future column).

Paris in spring

Rosan Cruz, now in Paris to run the Paris Marathon, sent this one.

A thief stole some paintings from the Louvre. Captured a block away when his van run out of gas, he told police he stole the paintings because he had no Monet to buy Degas, to make the Van Gogh. He had De Gaulle to do it because he had nothing TOULOUSE.

I hope Rosan finished her marathon with no injuries yesterday.

A strike now may just kill PAL

DEMAND AND SUPPLY By Boo Chanco (The Philippine Star) Updated March 28, 2011

I was afraid something like this will happen. As I watched the 70th anniversary presentation of Philippine Airlines that recalled memorable events in its corporate history, I felt a foreboding that this could be its last hurrah. Asia’s First Airline, like the country it proudly represents abroad, needs to do serious rethinking of where it stands, where it wants to go and how to get there.

Like the country, PAL was ahead of almost everybody in the region. But somewhere along the way the airline was, like the country, badly served by the politicians who led Asia’s first Republic. Not only did they abuse the airline to attain their jetsetter reputations, they forced the airline to hire their protégés to the point that it became, and still is, overstaffed and uncompetitive.

Today, the airline is already in trouble even without the strike threat. Fuel prices are going to the stratosphere. Competition is getting fiercer than it ever was. World economies are still under threat of a double dip recession. And it isn’t easy to have big overhead costs and try to recover increased operating costs in a very competitive environment.

When the pilots of PAL last had a strike, the airline still enjoyed a lion’s share of the domestic market. Because PAL was then still a near monopoly, the strike was a pain to the public. Government had to resort to extraordinary measures like allowing Cathay Pacific to operate domestic routes to minimize the strike’s negative impact on the economy. But today, PAL has very strong domestic competitors. In fact, Cebu Pacific, one of the many new local airlines, now carries more passengers between our islands than PAL.

There are other airlines too that will be ready to pick up the slack left by a Philippine Airlines grounded by a strike. I was just talking last week with Alfred Yao, the owner of Zest Air, and he impressed me as an entrepreneur with an aggressiveness that could make his airline a strong competitor for PAL not just in the domestic market but regionally as well.

 Mr. Yao told me he was buying more Airbus 320s to serve local and international routes. He said he now has twice weekly flights on the Shanghai-Kalibo route, increasing to four weekly in June, opening Boracay to an increasingly prosperous Chinese market.

Zest Air also flies the Seoul-Kalibo route four times a week and increasing to daily by June, with planeloads of vacationing Korean tourists. Zest also flies Pusan-Kalibo twice a week now.

And he told me Zest Air will also fly between Beijing and Palawan starting late April, opening a new direct destination for Chinese tourists. Zest will also fly between Beijing and Kalibo by late June. Also by June, Zest Air will be flying to Singapore, joining PAL, Cebu Pacific, SEAir-Tiger Air and AirPhil Express in linking the city state with the Philippines.

Mr. Yao said he is not afraid of P-Noy’s pocket open skies even if he also shares the demand for reciprocity aired by his competitors. But instead of complaining about it, he is trying to move ahead of the foreign airlines who may decide to take advantage of the new E.O. That explains his decision to bring international passengers directly to Palawan.

Then there is AirAsia that will establish a local subsidiary with majority control under Tonyboy Cojuangco. SEAir, on the other hand, is tying up with Tiger Air, a Singaporean budget carrier designed for tough competition. And there is AirPhil Express, practically a sister airline of PAL but one whose business model and staff structure are geared to enable it to compete in today’s turbulent skies.

There is no doubt about how tough competition is these days. Let us listen to Alfred Yao of Zest Air. “We have very good service,” he said, emphasizing the airline’s so-called value proposition for its clients. “Our people are very friendly. Price-wise, we provide very affordable prices that are within reach of Filipinos. Despite stiff competition, we are doing pretty well.”

As for Cebu Pacific, it flew 10.5 million passengers last year. This year, it expects that figure to go up to 12 million, of which 10 million would be using the NAIA Terminal 3, almost using up the terminal’s rated capacity of 13 million.

Despite the brave words of its executives during their 70th anniversary celebration, Philippine Airlines is in serious crisis. It needs a new business model in order to survive. Like what happened to Japan Airlines, PAL needs to reorganize to make it more nimble in today’s environment. It can no longer afford to have three times the number of employees Cebu Pacific has.

The restructuring of PAL that its union is vigorously objecting to is a survival response. This is probably why P-Noy upheld the position of the Department of Labor allowing it to do so. As I had previously written here, the employees union should learn from the example of the American automotive unions. When it became clear that GM, Ford and Chrysler would go belly up unless the unions worked with management and government to save the car companies, the United Auto Workers or UAW decided that cooperation was the better deal.

The union may be overestimating the importance of the airline’s survival to its owners. I see a very strong incentive on the part of the owners to let the airline fold up if the strike materializes and successfully grounds its flights. Most of its aircrafts are on lease anyway, and the lease can be transferred to AirPhil Express as it takes over PAL’s old routes.

On the marketing side, the worse part of a strike threat is the reluctance of passengers to do advance booking, something that helps the airline plan better. A passenger will not risk buying a ticket for a flight two months or more ahead of time if there is any danger that a strike may strand him here or in a foreign port. That crank call on a San Francisco bound PAL flight, hopefully, isn’t related to the labor problems of the airline because pranks like that can ruin an airline’s reputation.

It is crunch time for PAL and every stakeholder must decide if they want to save the airline or bury it for good. Government should not be expected to save PAL in the mistaken notion that its survival is in the national interest. Unlike in the past, if PAL goes belly up, there are enough competitors to take over its market and provide the service almost as if nothing happened.

The world has changed drastically in recent years. Job security can no longer be guaranteed in a globalized world where stiff competition is the name of the game. PAL is still organized under the rules of a more genteel world that had long ago changed. The new rules of the game in today’s business world may not be for the better in humane terms but businesses can only play by the new rules or perish.

A strike at this time may kill the airline. That does not do the union members any good. And while the owners may get hurt as well, they are in a better position to bounce back quickly as their Plan B, Airphil Express, is already up and running.

About 2,600 rank and file employees will be retrenched under the plan but more than 4,000 will retain their jobs in an airline that is better equipped to compete. And for those who will be retrenched, they will get financial and other benefits and be first in line for jobs in the outsource company that will take over the functions. That sounds better than killing the airline and almost 7000 employees losing their jobs. If the airline keels over because of the strike, all 7000 employees fall in line with other creditors for any financial claims.

Hopefully reason rather than emotion prevails so that Asia’s First Airline can still proudly fly the national colors in all corners of the world. For the PAL union to strike now is like cutting their nose to spite their face. It just doesn’t work for their benefit or anyone else’s other than PAL’s competitors who will gladly divide among themselves the still formidable market share of Asia’s First.

Those were the days

Jose Villaescusa sent this one.

LIFE was really so much simpler then... when Apple and Blackberry were just fruits, while Samsung was Delilah’s lover!

A cloudy open skies

Posted on January 20, 2011 08:21:41 PM
Business World:  Opinion
Trade Tripper -- By Jemy Gatdula

There’s a line from CNN that goes somewhat like this: "do you go with those who got it right or with those who got it wrong?" Because, frankly, in relation to the ongoing debate on the open-skies policy, do we give credence to those men able to build business empires from scratch, as well as the men and women able to effectively run local airlines for the country, or do we believe the promises of some guy who spent a considerable amount of money just to come up with "Pilipinas kay ganda"? I know what I’d choose.

Look, I don’t know Lucio Tan. I don’t know what he’s like. But I do know what he did and what he did is all around us. From beer to banks to airlines to cigarettes, this is a man who knows business. And when you have guys like that who can actually get things done, I would think we should instinctively help them or their endeavors. Apparently, we’d rather do the reverse.

Because at a time when a lot of people are predicting uncertainties for the global economy this year, with the concomitant unpredictability of our own economy, why we should be making it harder for the Philippines’ very own PAL (as well as Cebu Pacific and Zest Air), at this particular time, is beyond me. We shouldn’t be making it harder for them, we should be helping them.

Considerably, our tourism industry needs more than additional plane seats to get going: they need better airports and an efficient infrastructure. Both of which, we don’t really have. Such also needs careful and coordinated planning. None of which is being done effectively. We have a Category 2 rating from the International Civil Aviation Organization due to deficient aviation infrastructure and safety standards. All these are beyond the purview of local airlines. But they do fall squarely within the responsibility of the government. Traffic, peace and order, pollution, sanitation? These are not the responsibility of the local airlines. These are government’s. So why put the burden squarely on the shoulders of our airlines?

Besides, what does "pocket open skies" even mean? How different is that from a mere open skies? I suspect it’s one of those terms some policymaker cooked up to obfuscate matters, like "calibrated trade liberalization." They have no practical meaning. It’s either you open or you don’t. If one is going to be selective about it, then there better be good reasons for the selection. And if the selection turns out to be opening almost all air travel anyway, then that is not "pocket." That is open skies. Period.
Some people argue from the perspective of the expected benefits of "liberalization." Let’s not be simpletons about this. This column obviously is partial to liberalization. But there’s a difference between being partial and blind. As in all matters, we need to be smart about this. Look, US skies won’t open unilaterally. And it’s done very deliberately. Liberalization entails competition, which entails we step our game up, which means all of us, which means the government and private sector. If one of those factors or players is missing from the equation, then we just made people lose their jobs for no purpose. We can’t just open our skies up and hope that a "trickle down" effect ensues. We simply cannot gamble with people’s livelihoods.

Government assistance is particularly crucial for the airline industry. I don’t know of any successful foreign airline that made it without government support. Aside from airports, infrastructure, security, and safety, government help, particularly in economic crunches, is significant. The ability of the government to open up markets for our airlines is vastly important as well. To open up our skies without getting reciprocity from the other countries is to place an undue handicap for our companies. It’s not only unintelligent, it’s unconstitutional.

Besides, the nature of the market doesn’t seem to support the idea of open skies. People sometimes rail against our airlines for being monopolies, but we may have to accept that a "natural monopoly" may be necessary as far as airlines in the Philippines is concerned. That’s because the market could perhaps support only two or three players. That being the case, I’d rather have those two or three to be Filipinos. It then follows that we support such Filipino airlines as to be able to compete against those better-funded and larger foreign airlines.

The importance of Filipino carriers goes beyond economics. There’s also "transport security" (similar to "food security" arguments), particularly to ensure the safe return of our numerous OFWs during international emergencies. Finally, there’s also national pride. I rather like the idea of having Filipino-owned planes flying around. I like the thought that we have a flag carrier. And, despite (or because of) our difficulties, I’d really like to still be able to lift my head up and see the Philippines soar.

The ethics of layoffs

Tuesday, 07 December 2010 00:00
BY BENITO L. TEEHANKEE

Philippine Airlines (PAL) has announced its plan to lay off 2,600 ground employees as part of its cost-cutting program. PAL president, Jaime Bautista, has argued for the necessity of this step to ensure the survival of the company.

The Department of Labor and Employment (DOLE) has ruled the move legal as management’s prerogative to do what it takes to keep the company afloat. The PAL Employees’ Association (PALEA) has questioned the move, labelling it as mainly profit motivated a preparation for massive contractualization in the airline.

Whichever side one takes on the issue, the PAL-PALEA conflict has called attention to one of the most painful events in the life of a company—restructuring. Ensuring that the company stays viable and competitive is clearly a legitimate business goal. What needs closer scrutiny, especially from the ethical standpoint, is whether laying off thousands of workers is a legitimate means for the airline to achieve this goal at this time.

Anayzing the ethics of layoffs begins with applicable core principles. The Constitution provides two such principles. First is the principle that “the use of property bears a social function, and all economic agents shall contribute to the common good.” Second is “the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes.”

The common good principle reminds capital owners that their decisions must properly respect the dignity of those affected as well as their need for human development. Corporate decisions involving livelihood have the greatest impact on the common good since these affect the employees’ survival and personal growth, while indirectly impacting these employees’ families and other dependents.

The shared responsibility principle reminds both capital owners and employees that they are essentially “partners” in ensuring the health of the business. Partners are responsible for each other and commit to support each other. Business challenges should be met through collaborative and creative approaches which manage costs, on the one hand, and enhance business value, on the other. Thus, the sacrifices that come with turning around a business situation, as well as the fruits of its successful outcome, must be shared by the partners.

It is important to ask whether the PAL management (as influenced by capital owners) and the employee union observed these two principles in their approach to the business challenges facing the airline. Both sides may use legal arguments to support their respective positions but these do not suffice to make their behaviors ethical. More importantly, a legalistic approach does not build the high-trust situation crucial for a creative business turnaround.

Perhaps PAL and PALEA can learn from the experience of Universal Motors Corporation (manufacturer and distributor of Nissan vehicles) some years ago. Faced with a slump in demand, the company had the option to lay off employees. Elizabeth Lee, then chief operating officer, found the resulting loss of jobs and negative impact on families morally unacceptable. Instead, she rallied the management team and employees to create the “UrVan, UrBusiness” program. The program provided buyers with easy-payment terms and entrepreneurial ideas for using Nissan vehicles. The program has saved jobs, increased the company’s revenues and market share, and improved the lives of thousands of families.

A business downturn is a challenge to the creative partnership between capital and labor. The company’s problem is not merely managing its costs but inspiring the shared vision to pull everyone together for the good of the company and all those who depend on it. Does PAL management and PALEA have what it takes to turn a “We vs. Them” situation into an “Us” situation? I certainly hope so—for the common good.

Dr. Ben Teehankee is the Aquino associate professor for business and governance at De La Salle University. He may be emailed at teehankeeb@yahoo.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it . The views expressed above are the author’s and do not necessarily reflect the official position of De La Salle University and its faculty and administrators.

Red faced

Philippine Daily Inquirer
Biz Buzz: Christmas-party rivalry
December 6, 2010


IT LOOKS like militant labor groups have failed to convince union members to reject early retirement packages from Fortune Tobacco Corp. and Philippine Airlines.

As of last weekend, 99 percent of Fortune Tobacco workers have already accepted retirement packages, which the firm describes as “generous,” leaving leaders of the labor union and their left-side allies not a bit red-faced (coming off a “unity march” they held along Ayala Avenue just two weeks ago).

According to the grapevine, more than 1,200 workers of Fortune have signed up to avail themselves of retirement packages equivalent to 2.5 months of pay for every year of service.

Whatever resistance they had was also broken down by a P60,000 “early bird” bonus for those who immediately signed up. In fact, more than 90 percent of union members signed up on the first two days after the program was officially announced.

The same scene is playing out in Philippine Airlines. Even as union leaders are moving heaven and earth to reverse the labor department’s decision authorizing the rationalization program, close to a thousand union members have already volunteered to avail themselves of PAL’s early-retirement package.

This presents a huge dilemma for PAL union leaders who were rebuffed by Malacañang last Friday for announcing their plan to hold a strike vote while their case is pending review by President P-Noy.

Apparently, there are limits to the effectiveness of both unions’ battle cry. It’s Christmas, after all.—Daxim L. Lucas

Retirement age

By Raul J. Palabrica
Philippine Daily Inquirer
First Posted 22:32:00 08/12/2010

AGE IS JUST a number, so goes an advertisement for a food supplement directed at senior citizens.
Try telling that to the flight attendants of Philippine Airlines who, under their collective bargaining agreement, have to retire when they reach 40. And be ready to get a severe tongue lashing.
The airline industry has varying retirement policies. Most American and European airlines send their pilots packing between ages 60 and 65. For PAL, it’s 60.

The cabin attendants of US airlines are better situated. Strict anti-age discrimination laws allow them to stay on as long as they are physically fit.

Not so for some Asian airlines. Age and physical appearance determine the stewardesses’ continued employment.

The female flight attendants of Thai Airways who are aged 45 and above are encouraged to sign a “mutual separation plan” that would give them generous separation benefits in exchange for calling it quits.

Singapore Airlines’ famous “Singapore girls” can wear their figure-hugging uniforms only up to age 35. By entering into five-year contracts, with one renewal only, management is able to skirt discrimination suits that may be filed by young retirees.

Mandatory

Retirement is a sensitive issue in both private and government sectors, especially in the executive or managerial levels.

Except for judicial and constitutional offices, the compulsory retirement age for government employees is 65. Barring any disciplinary action or requirement for special qualifications, a civil service employee can reasonably expect to be promoted within the ranks through attrition as those above him reach retirement age.

Retirement is a double-edged sword. A high retirement age could adversely affect the morale of talented staff members who aspire to climb the corporate ladder (and enjoy its accompanying perks) as soon as possible.

When vacancies in the executive offices are hard to come by due to the presence of “overstaying” officers, ambitious employees with marketable skills will not hesitate to seek their fortunes elsewhere.
But setting a low retirement age has its downside too. Expertise gained through long years of service is not easy to replicate. There is no assurance that the prospective successors, even if they hold prestigious academic degrees, can effectively fill up the void left by the retirees.
Finding a balance between these two concerns is a test of managerial leadership.

Planning

Adherence to age-specific rules on retirement is not a problem for companies with internal training programs that ensure the availability of staff who can take over in case of retirements or resignations.
This “estate planning” process begins the moment new employees get on board. Those who show leadership potentials are put on the fast track and given proper exposure and training to prepare them for bigger responsibilities.

They can quickly step into the shoes of the retirees. The adjustment period, if any, is often minimal.
The partners of one of the country’s leading auditing firms are obliged to retire upon reaching age 54 or 55, or roughly the equivalent of 20 years service, to allow the younger partners to assume leadership positions while at the peak of their professional productivity.

The presumption is, by that time, the retiree has saved enough money to be able to start a new business, or live in retirement comfort, or received a lucrative offer to work in a client company.
When the road to the executive floor is not littered with overstaying officers, those who occupy the lower floors are inspired to work harder as they await their turn to move up.

Benefits

The retirement age in the private sector is determined by the collective bargaining agreement between the employees and the company, or other applicable employment contract.

If the job is stressful or physically demanding and extended stay at work could be detrimental to the employee’s health, union and management can agree on a lower retirement age.

In PAL’s case, the argument has been raised that the strain caused by irregular working, sleeping and eating hours, including the adverse effects of atmospheric cabin pressure, justify the flight attendants’ early retirement.

For companies with no CBA, the retirement age is a matter of agreement between the individual employee and the employer.

Although the common practice is for employees to stay on until they reach 65, unless earlier dismissed for justifiable cause, there are employees who opt for early retirement so they can enjoy their retirement pay while still relatively young.

This holds true for jobs that require specialized intellectual or creative talent, e.g., software development and entertainment production, that command hefty compensation benefits.
As in all high paying jobs, the burnt-out feeling sets in much earlier when the brain and the nerves are placed under constant pressure in an effort to justify the fat paycheck.

If there is neither CBA nor employment contract, the Labor Code provides that an employee who reaches age 60 or more, but not more than 65, and has worked for at least five years, is entitled to a retirement pay equivalent to 15 days pay for every year of service.

Think Bits

Protecting labor
By Ricky Poca
Cebu Daily News First Posted 13:13:00 08/08/2010

There is much talk about the proposed 12-year basic education program to comply with the country’s commitment with the Bologna Accord and the Washington Agreement, which require those who would like to work in Europe and in the United States to have at least the same number of years of basic education as Europeans and Americans.

Education Secretary Armin Luistro says his department will implement the 12-year program with emphasis on vocational and technical education, so that after high school, the graduates are already qualified, skilled and competent to work. I think that is the proper thing to do because today our curricula have plenty of subjects that aren’t useful for most employment opportunities.

Is the additional two years of basic education good for the country? Some question its propriety, because it would be an added burden to families, but there is no other way but to comply with the Bologna and Washington Agreements. If we don’t we would lose our competitiveness abroad and many Filipinos who want to work abroad will find no proper employment.

So, what happens after the 12-year basic education? Will the graduates still take up four years of college? I think what is going to happen is that graduates will just take up two years of technical or vocational education, and those who qualify can take up three or four years of specialized college courses.

This is a good proposal. I’ve been teaching college classes for years and I often have students who are still 16 years old and not mature enough to face the rigors of higher learning, so they fail to choose the courses that fit them best. Others are simply not academically prepared.

In my experience as the new chairman of the Department of Political Science at University of San Carlos, when I interview applicants for the program, asking them what tracks in political science they want to pursue, many usually don’t know and would usually settle for the most common, which is law and public policy, ignoring that there are other three equally relevant tracks.

The lack of maturity of many first year and second year students is a concern for us teachers who see that they may not be prepared for college life. I am encouraging more debate on this proposed new highway of education, for us to come up with better-informed choices.

* * *

I think the problem confronting Philippine Airlines has brought to for the issue of contractualization in the private sector. Workers are hired on the basis of their contracts, which bar them from becoming regular employees.

In this scheme, recruitment or placement agencies provide workers to companies, which hire the workers for just five months, not long enough for the six-month period to let them qualify for regularization.

This scheme has been abused by many private companies that want to shortchange their laborers who don’t get entitled to the benefits regular workers enjoy.

Even those doing work directly related to the core business of a company are hired under this scheme. What is worse is that the legislative department and judicial branches of government have in a way reinforced the scheme of contractualization.

A proposal to enact a new Labor Code that would regulate or ban contractualization had rough sailing in Congress, which was expected because many senators and district representatives are business owners or consultants of big firms. So, they protect their own kind.

In the judiciary, I do not know if the members of the bench are blind to the lamentable conditions of workers.

Even established firms are adopting the scheme, although I think some of them do so primarily to check on new employees’ workplace behavior and attitude.

But this can be corrected with the many tools available for both labor and management to pursue. There are ample provisions in the law to protect management from abusive employees, but management must be vigilant in documenting incidents involving misbehaving employees. One must remember that in Labor Law, in case of doubt everything must be resolved in favor of labor.

In many labor cases, management finds itself at the losing end, based on statistics of the National Labor Relations Commission and the Department of Labor.

I observed that management had this penchant for dismissing or terminating employees without due process, confident that they could do anything because they own the company. It’s a whole new story today. That is why management resorts to the contractualization scheme; it’s more convenient to forego dealing with problems that go with having regular employees.

It is hoped that government comes up with a law that would protect labor from the abuses brought about by contractualization, especially because the Constitution recognizes labor as the primary social and economic force in our country.

No-fly zone

OPINION COLUMN
Editorial
No-fly zone
Philippine Daily Inquirer
First Posted 21:55:00 08/03/2010

IT MAY be, as some of the employees of Philippine Airlines have started to suggest, that the untimely resignation of about two dozen pilots is a crisis that is the company’s own making. There will be space to discuss that, but first things first: Both the pilots and PAL management must recognize that the dispute affects not only the two parties themselves but the general public. The crippling of PAL, in other words, is a matter of national interest.

That is why former Sen. Ernesto Herrera’s press release circulated Tuesday, on behalf of the Trade Union Congress of the Philippines, strikes us as both misleading and unhelpful. PAL cannot force its pilots to fly or to stay, Herrera said. “Professionals are entitled to go wherever their skills will get the greatest reward. If employers or companies can invoke their need to stay profitable in order to justify indiscriminate job cuts, then surely professionals and other staff are also entitled to abandon their posts in favor of greener pasture elsewhere.”

No one disagrees with the basic principle that the pilots—13 captains and 12 first officers flying the airline’s workhorse planes—can leave for higher pay or better conditions abroad. Not even PAL management. “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,” a management statement read.

The immediate issue is precisely those contractual obligations. Because commercial airplane pilots possess what are called “mission-critical skills,” they cannot simply resign. Government regulations require six months’ notice—surely a reasonable requirement, designed to ensure the traveling public’s safety by providing the airline enough time to train replacements. The pilots who left the company immediately after tendering their letters of resignation thus have some explaining to do—to the public at large.

But the long-term issue is squarely in PAL management’s court. And it is something that airline executives cannot simply explain away by saying that other airlines offer “two to three times” a PAL pilot’s salary. A higher salary, after all, is not always the main deciding factor in choosing a new job; work conditions come into play, including employee morale and the reasonable expectation of success in one’s chosen career path. The rumblings from PAL’s rank and file, therefore, form an ominous soundtrack: rumors about unsatisfactory secondment to affiliate companies; employee complaints about undermanned flights, resulting in overworked flight attendants; excessive downsizing. Even the improbably coincidental immediate resignation of the pilots is already a statement in itself.
If these issues remain unresolved, what is to prevent another mass resignation of pilots, or airline mechanics, or flight attendants, in the future?

The international repercussions, it bears belaboring, go beyond the economic. For instance, the Agence France Presse story on the resignations that the popular Yahoo News service carried used the following headline: “Philippine Airlines cancels flights as pilots quit.” Strictly speaking, this was an accurate description. But a reader abroad, who may not have the time to read the story and thus find out that the cancellations affected only a handful of flights and two dozen pilots, may think the entire airline has suspended all operations. In other words, the headlines alone can damage PAL’s reputation, and with it the country’s image, too.

The Associated Press decided to use a humorous lead in one of its stories on the PAL crisis. “Good morning, passengers, and welcome aboard. We’re expecting clear skies today, but we’re out of pilots.”

Funny, ha-ha. But in fact the joke’s on the country, which is part of the name of Asia’s oldest airline. Like we said, the impact of news like this, while it will be felt most sharply in business and tourism, goes beyond the economic.

Déjà vu at PAL

November 13, 2010 01:28:00
Solita Collas-Monsod
Philippine Daily Inquirer

DOES A company have the right to restructure its organization, weed out redundant employees, and contract out or “outsource” a business function that used to be performed in-house, to an external provider? Of course, was the universal reply from those I asked. So Philippine Airlines (PAL) has the right, according to Labor Secretary Rosalinda Baldoz, and she and PAL have been fiercely defending their actions/decision respectively.

Does a company have the right to terminate all of its old (not necessarily in age but in terms of years of service) employees, and then hire them back, directly or indirectly, at entry-level wages and no seniority privileges? Of course not, was the universal reply. Lawyer Lorna Kapunan was one of those I asked, and she was emphatic about it. So PAL was wrong on this, according to its employees, because that is what it is doing.

How to reconcile these two seemingly opposite situations? Simple, say the employees. Certainly PAL will be “outsourcing” (Situation 1). But the outside company is really an inside company—owned, controlled or operated by Lucio Tan, his family, or his dummies. Smoke and mirrors and corporate veils are being used to disguise the situation, but the end result is the same: employees terminated will be rehired at lower wages, and zero seniority (Situation II).

How do the employees know that the firms that will undertake the previously in-house services are actually in-house firms? They point to Tan’s son, son-in-law, some PAL officials as officers/owners of the firms being considered. Plus the very fact that PAL is offering the soon-to-be-terminated employees first crack at employment with the new (outsourced) service provider—at lower rates, obviously, and as “contractuals”—looks to be a dead giveaway. The disguise is careless.

PAL claims that this “outsourcing” is necessary because it has been losing money—the reported figures are over $300 million or P13 billion for 2008 and 2009. But why did it lose money? Its president, Jimmy Bautista, has been quoted as attributing this to a combination of low demand, restrictions to its expansion to lucrative routes in the United States, and a bad hedging decision that led to the airline paying a lot of money for oil that got cheap.

The low demand part is easy: the global economic crisis was in full flow in 2008 and 2009, and travel was a natural victim—something like a 7-percent decrease in worldwide demand.

The restrictions part is a little more complicated: it involves the US Federal Aviation Administration (FAA) and the International Civil Aviation Organization (ICAO), the former having downgraded the Philippines in 2008 due to deficiencies in our Air Transportation Office (ATO), and the ICAO giving the Civil Aviation Authority of the Philippines (CAAP), ATO’s successor, a failing grade in its audit. All these wreaked havoc on PAL’s flight expansion plans in the United States, as well as its use of two brand-new Boeing 777 aircraft for US flights (not allowed).

And what was the bad hedging decision? This was sometime in 2008, when there was speculation that the price of oil would go through the roof (over $150 a barrel). PAL management bet that prices would go up, so it bought its oil forward, paying current prices against future deliveries. It lost the bet, i.e., prices went down instead of up, and PAL took a financial bath—rumors of the loss ranged from $150 million to more than $300 million.

The reader will notice that the reasons for PAL’s losses in 2008 and 2009, as reported by Bautista, had nothing to do with high labor costs. So why is labor bearing the brunt of the losses?

More to the point, how much is supposed to be the cost savings attached to the labor retrenchment? Again, from news reports, this will be something like $20 million—or all of 6.7 percent of PAL’s total losses.

In sum, PAL lost $300 million, through no fault of its labor. But it is using that as an excuse to take out labor (that just coincidentally comprises 70 percent of PAL Employees’ Association [Palea], the labor union, and most of its officers), even though the “outsourcing” scheme will reportedly reduce its losses by a mere 6.7 percent.

One cannot help conclude that this is nothing but a union-busting move. And yet Secretary Baldoz swallowed the PAL version hook, line and sinker.

The irony of it is that this whole sorry mess gives anyone with a long memory a sense of déjà vu. Twelve years ago, PAL did the very same thing—terminating pilots and flight crews—over 1,500 employees. PAL made the same claim: losses (arising from the Asian financial crisis). It then rehired a great number of them—but at entry level wages, loss of seniority (and for the pilots, a promise not to form a union). PAL sold off its profit centers to Tan-owned companies, terminating the PAL employees in the process, and then rehiring them at lower wages and no job security. And managed to swing a 10-year suspension of the CBA with Palea.

An excerpt from the 2008 Supreme Court decision ordering PAL to reinstate the 1,400 or so flight crew it had terminated, says it all: “It was unfair for PAL to have made such a move; it was capricious and arbitrary, considering that several thousand employees who had long been working for PAL had lost their jobs, only to be recalled but assigned to lower positions, and, worse, some as new hires, without due regard for their long years of service with the airline.”

Perhaps Secretary Baldoz should be reminded that she is the secretary of labor, not of management. And that the LE in DOLE stands for “labor” and “employment,” not for “labor exploitation.

PAL spin-off is inevitable

Counterpoint – Alvin Capino
Manila Standard Today Wednesday, November 10, 2010

The apprehension of the 2,600 regular and rank-and-file employees of Philippine Airlines affected by the decision of the airline to spin-off three “non-core” departments is understandable.
If you’re in your 40s, as many of the affected PAL employees must be, the prospect of looking for a new job and then working for a new company is very intimidating.

However, the employees affected by the spin-off of the airline are luckier than other workers whose companies were forced to close down by the worldwide economic crisis in the past couple of years.
Some of those workers, particularly those in the electronics industries in the Calabarzon area who were laid off in the wake of the US economic downturn, got little or no retrenchment benefits at all.
In the case of the PAL employees to be affected by the spin-off of Airport Services, In-flight Catering and Call Center Reservation departments, Labor Secretary Rosalinda Baldoz made sure that they would get maximum benefits above those mandated by the Labor Code.

In her order affirming the earlier decision of Acting Labor Secretary Romeo Lagman that the closure of the three PAL departments and the outsourcing of the three operations to service providers are lawful and justified, Baldoz ordered an increase of the transition benefit package of for the affected employees.
The benefits include the assurance that the affected staff would be absorbed by the selected service providers and would have guaranteed payment by PAL for one year. This means that the employees will be employed by the service provider in their old functions subject to the usual probation period and of course under a new salary scheme.

Of course, some long-time employees would probably find it hard to accept and adjust to the new pay scheme. Some employees, for example, who have been with PAL for twenty years or more and are performing basic functions receive salaries of P40 thousand a month  because of their length of service. This has entitled them to mandatory increases under the periodic collective bargaining agreements.
Doing the same job at a much lower pay with the service provider would be hard for such employees to accept.

However, the veteran employees with high pay scales and longer service in the airline would be getting bigger separation benefits compared to the younger employees. Under the higher benefits ordered by Baldoz, the separation pay has been increased to 1.25 percent of a month’s salary for every year of service.

Under this scheme, some veteran employees will get as much as P2 million in separation benefits. The average separation pay is P1 million and the minimum for those with less years in service is estimated at P500,000.

Under the Baldoz order, other benefits for the employees affected by the spin-off are: additional gratuity of P50,000 per employee, payment of the cash equivalent of vacation leaves and sick leaves, continuation of “trip pass” benefits, and one year extension of medical and hospitalization insurance.
According to PAL, some of the members of the PAL Employees Association (PALEA) who are affected by the spin-off “have been discreetly calling or e-mailing HRD’s Employee Benefits & Services division to ask for an exact computation of their total separation pay based on the increased benefit package approved by DOLE.”

In some cases, it is the spouses who are making the inquiries on how much their husbands would be getting.

These inquiries from employees asking for computation of what their total separation pay would be is apparently the basis of the second Notice of Strike filed by PALEA with DOLE. The officials of the PAL employees union are saying that the alleged individual bargaining being done with union members is tantamount to interference with restraint and coercion of employees in the exercise of their right to self-organization. A second reason for the new strike notice PALEA said that since the majority of the union officers would be affected by the spin-off this amounts to union busting.

Newly appointed PAL vice president for corporate communications Joey de Guzman says the basis for the second Notice of Strike filed by PALEA last Friday, Nov. 5 is preposterous. He says there is no individual bargaining being done since PAL has already decided to accept and comply with the order of Baldoz.

De Guzman says he himself had been receiving text messages and calls from affected employees and their spouses asking for a computation of their total cash benefits.

PAL president and chief executive officer Jaime Bautista says while they have some reservations about the increased benefits ordered by DOLE particularly the 1.25 percent pay for every year of service and the P50,000 additional gratuity, they have decided not to dispute it and respect the ruling since it has the force of law.

He adds that the increased benefits ordered by Baldoz has increased the cost to about P2.5-billion from the P2-billion cost of the original decision.

Bautista says: “Given its recent losses and current financial position PAL would be hard put to raise P2.5 billion but this is a bitter pill we have to swallow. PAL believes that DOLE’s decision is just, reasonable and humane.”

For officials of PALEA, the spin-off and the separation from PAL is also a bitter pill to swallow.
However, they must realize by now that it is also inevitable. All of the major airlines in Asia have already done the same thing and have spun off their non-core units. PAL is the last to do so.
The pressure on PALEA would also be coming from their own members. Those who want to already accept the enhanced separation package ordered by DOLE would be ones asking PALEA to already agree and accept the spin-off.

Spin-offs of non-core business is the trend worldwide in the light of the continued threats to the viability of most international airlines.

The pressure is even greater on Philippine Airlines. As the airline’s officials have pointed  out, it is compelled to resort to spin-off three non-core units and focus on the core business of air transport in order to survive the many challenges facing PAL including a US$312-million loss in the last two years due to the global recession; volatile fuel prices; the US Federal Aviation Administration’s downgrade of the Philippines’ aviation safety rating to Category 2; cutthroat competition from budget airlines; and the previous government’s liberal grant of air traffic rights to foreign carriers.

Bautista says the decision to spin-off is difficult but necessary. “At the end of the day, PAL wants to be remembered not for the 2,600 jobs it lost, but the more than 4,000 it saved.”

No golden parachutes

Sunday, 07 November 2010 00:00
BY BENJAMIN G. DEFENSOR
The Manila Times

MANY will argue that the decision of Secretary of Labor Rosalinda Baldoz to permit Philippine Airlines to outsource its in-flight catering, airport services and call center reservation operations is not the private sector-government cooperation that President Benigno C. Aquino 3rd meant in his State of the Nation Address. But the Department of Labor sees the PAL move as valid exercise of managerial prerogatives.
Which brings us to the first question management guru Peter Drucker asks from any enterprise consulting him:

“What is your business?”

PAL management’s obvious answer would be: “We transport people and goods.” Since people must be fed as they are transported, is catering part of its business? And Drucker is likely to say that let the caterers do the catering for that is their business and may be expected to do a good job of it.

And this is what Secretary Baldoz meant when she said she found PAL’s decision “to be a just, reasonable humane and lawful exercise of its management prerogative to reorganize their corporation structure for purposes of viability of its operations, subject to the entitlement of affected employees to transition guarantees and benefits.”

It used to be that gourmet food and drinks or a reasonable facsimile thereof, was part of the attractions airlines use to lure passengers. But anyone who has flown with any international airline recently will testify that in-flight meals are no longer what they used to be, although it may be slightly better that dialing for pizza—for only pizza is what you are likely to if you just fly from Manila to Hong Kong or back.

For in short n short haul flights, some airlines may be just dialing pizza for the passengers.

A full-scale commissary with its attendant personnel would only bloating the cost of air tickets for airlines desperately fighting for passengers in a depressed market and escalating costs.

Many air travelers today accept the fact that in the era of budget fares, budget meals are to be expected. So what’s the point of a full-fledged commissary?

As pointed out by Secretary Baldoz, the PAL spokesman said, “if there is no spin-off, PAL will close down and 7,500 workers will be displaced without separation pay. Not to mention the adverse effects on PAL’s shareholders, the riding public and public interest.”

This is not the first instance where PAL spun off an ancillary service to service provider. It sold its maintenance and engineering department to Lufthansa Teknik Philippines.

And this is not the first time that PAL workers may have miscalculated. Earlier, the cabin crew union declared a strike over among others an age limit for female cabin crew personnel. At that time, it was known that Secretary Baldoz has received a temporary appointment and may be expected to be careful about alienating a sector of labor. Besides there was even a threat that the government may hasten open skies policy negotiations should there be a disruption of air travel if PAL be hit be crippled by a strike.
So the cabin crew union filed a strike notice.

At the start of the row, Secretary Baldoz made it known that she was indeed going to step into the dispute of avert the strike. It was assumed that she would have to take her signals from the President on the matter. But at the height of the dispute, President Aquino removed her designation as acting secretary and made her appointment permanent.

She promptly she announced government takeover of the labor dispute at PAL. She then said that any strike or work stoppage by disgruntled PAL flight attendants would be illegal. The flight attendants union promptly dismantled preparations for strike.

In the outsourcing dispute, she again received support from the Presidential Palace. Some of the affected workers held a demonstration to ask the President to reverse the ruling of Secretary Baldoz.

Presidential spokesperson Abigail Valte said the Palace could not intervene “at this point” and suggested that the affected unions seek reconsideration. But she said that she found Secretary Baldoz’s decision “based on law.”

Workers who will be displaced by the PAL’s decision will be absorbed three companies. “And PAL shall be bound and held liable by way of guarantee in favor of all affected employees, for payment of one year, or whatever salary is guaranteed respectively by service providers upon their admission to employment with said service providers,” Secretary Baldoz said.

All displaced workers will not exactly get golden parachutes but neither will they go to the poor house or become wards of the state. Each will receive an average of million pesos. The awards will range from around P500,000 to something like a million-and-a-half pesos each. And they may keep their jobs with the new service providers who will take over from PAL.

A displaced worker will receive separation pay equivalent 125 percent of their salary for every year of service plus an additional gratuity of P50,000. All their used vacation and sick leaves will be converted to cash, their ‘trip benefits’ will be monetized and they will enjoy hospitalization and medical benefits for a year after separation. PAL will have to go in hock to meet these payments estimated to cost some P2.5 billion.

Members of the Philippine Air Lines Employees Association say the retrenchment of some 2000 of their members could spell the death of their union. Organized in 1946, it is said to be the oldest union in the country.

But Palea is just one of the victims worldwide of the effects of technology on jobs. As new technology takes over business and industrial operations, gains in efficiency is bound to affect labor. And costs. The bottom line. And the life of the enterprise itself and its stakeholders.

PAL marks World Sight Day

Roundup
Manila Standard Today
October 21, 2010

PHILIPPINE Airlines promised to transport human eye corneal tissue to any part of the country for free to help some 4 million Filipinos who are visually impaired, the Department of Health said on Wednesday.

PAL president Jaime Bautista said they are glad to assist "in their small way" those needing corneal transplants as the country's flag carrier supported World Sight Day.

Bautista said that with few eye donors for so many who are visually impaired, both government and the private sector have to work together to bring down incidence of blindness and visual impairment.

The Eye Foundation of the Philippines is a partner in the free human eye corneal tissue transport and are required to coordinate with PAL's cargo reservation a day before the day of transport.

Bautista also said PAL accepts human organs, in specially designed hand-carry containers, on all domestic flights and provides members of organ retrieval team with special boarding and deplaining privileges on a last-in-first-out basis.

Bautista explained that PAL's detailed packaging, handling and transport procedures for human organs was updated in October 2009 after the request of the Health Department for PAL's support to the Human Organ Preservation Effort Retrieval Team of the National Kidney and Transplant Institute.

PAL, he said, has always accommodated the kidney retrieval team to carry human subject to packaging requirements and without sacrificing the health, safety and comfort of its commercial passengers.

NKTI says the transport of human organs, such as kidneys and liver, require delicate handling as these organs are fragile and cannot withstand heat in the airplane's cargo hold. Kidneys also have to be transplanted on patients with end-stage renal failure within 20 hours.

The Big Stick

Oct. 17, 2010
By Benjamin G. Defensor
THE Manila Times

THEY were not by any means speaking with a soft voice but it turned out they had a big stick that is why the Philippine Airlines (PAL) management was able to dampen what could be a crippling strike by the Flight Attendants and Stewards Association (Fasap). For years the members of the PAL cabin crew were seeking the elimination of the age limits on flight stewardesses, who are now forced to retire at 40 or transfer to other tasks in the airline.

The cabin crew union, of course, have the usual economic demands and for years the age limit stayed on in the their collective bargaining agreement and now those who signed the contract face the threat of being phased out.

At about the same time that the cabin crew members were pushing through their protests against the age limit on their jobs, PAL received a sudden jolt when 25 of its pilots and first officers on short-haul aircraft suddenly resigned to accept higher paying jobs from pilot-strapped overseas airlines forcing the cancellation of some of PAL’s flights.

Fasap may have seen an opportunity to ratchet up its pressure on PAL by threatening to strike and stop the airlines operations unless their demands were met.

PAL being an essential service, the government may assume jurisdiction over the dispute and frustrate any attempt at a strike.

However, a threat from the Palace that the government may hasten the adoption of an open skies police which PAL says would be its end as foreign airlines may start coming in to serve the nation’s air transportation needs may have turned the trick. On the surface, open skies will promote competition leading to better service and cheaper fares.

However, big international airlines can afford to slash their fares to kill off competition from smaller airlines like PAL and other Philippine air carriers. Once these are driven off the air, the surviving airlines may then revert back to their higher fares with less competition.

With presidential spokesperson Edwin Lacierda quoting President Aquino as saying that if the strike threat was not resolved, “the government would be forced to rush the open skies . . .”

“What is important to the President is the concern for the riding public,” Lacierda said.

This could happen if the Secretary of Labor does not take jurisdiction over the dispute. While at the start of the row, Secretary of Labor Rosalinda Baldoz already made it known that she was indeed going to step into the dispute of avert the strike.

However, it was assumed that she would have to take her signals from the President on this matter. After all, she was one of three members of the Cabinet who were appointed in an acting capacity. But at the time, the PAL dispute was raging, President Aquino removed her designation as acting secretary and asked her if was willing to stay on the job permanently. She was and her permanent appointment was promptly drawn up.

The following day she announced that the government is assuming jurisdiction over the labor dispute at PAL. Secretary Baldoz then said that any strike or work stoppage by disgruntled PAL flight attendants would be illegal.

The flight attendants union promptly dismantled preparations for the strike that was scheduled for the last week of this month or the first week of November. Fasap issued a statement saying it “will respect the authority of Secretary Baldoz to assume jurisdiction over the dispute” but added the their fight against the unfair retirement age policy and discrimination against female flight attendants would continue.

PAL spokesperson Celia Villaluna said the airline was grateful for the assumption of jurisdiction because the strike threat was of grave concern for PAL clients.

“Since Fasap is banned from staging strike or any work stoppage, our passengers are assured of unhampered operations. We advise them to book early for their flights especially for the coming semester break and All Saints’/Souls’ Day holiday.”

She said PAL hopes; Secretary Baldoz would “judiciously resolve the contentious issues soonest so that PAL can operate smoothly and efficiently without threats of any work stoppage that unnecessarily scare away customers and investors.”

Open skies is not the answer

Manila Standard Today: Opinion
September 15,2010

President Benigno Aquino III should not limit himself to Tourism Secretary Alberto Lim for advise on whether to speed up the adoption of an open skies policy in case the operations of  Philippine Airlines is paralyzed by its union of flight attendants and stewards.

The filing by the 1,600-strong Flight Attendants’ and Stewards’ Association of the Philippines of a strike notice with the Labor Department has prompted the President to renew his threat that his administration would speed up the adoption of an open skies policy if the labor unrest disrupts the services of the airline.

Lim, of course, is a long-time advocate of open skies and he would certainly recommend that the Aquino administration adopt open skies immediately. A strike in PAL would be a convenient excuse to push this policy which the United States has been espousing.

But it would be good for Mr. Aquino to also ask his other advisers, especially those who are not committed to open skies like the Tourism secretary, what the implications of the adoption of open skies would be in both the short term and in the long term.

The most basic question that the President should ask is whether open skies would fill the vacuum created in case PAL services are disrupted.

As far as international flights are concerned, there might be no need for open skies. There are many other airlines already serving the routes serviced by PAL. These airlines could well service the needs of passengers affected by a PAL strike.

A temporary solution could be to authorize airlines already serving PAL routes to increase their frequencies. That’s in the meantime.

The domestic routes would be the problem. But it is clear that open skies will not be able to address the probable problems created by the disruption of PAL service in domestic routes.

Even if open skies is implemented and foreign airlines are allowed cabotage where foreign airlines will be allowed to carry passengers between domestic destinations, they’d probably serve only the most lucrative routes. In fact, the foreign airlines would probably only fly the Manila-Cebu route and ignore other domestic routes especially the so-called missionary routes.

The slack to be created in case there is a disruption of PAL domestic service would have to be filled by the other domestic airlines including Cebu Pacific, Zest Air and even PAL’s sister airline Air Philippines.

Open skies will be no help even if cabotage, which is entirely denied or severely restricted in all other countries in the world, is allowed.

Open skies is an issue that the government should consider separate and distinct from the PAL strike issue. Some people, especially those holding key positions in the Aquino administration, and who have been advocates of open skies, would like to take advantage of a possible strike threat in PAL to push this agenda.

President Aquino should not allow himself to be stampeded into making a decision on open skies by these people.

The granting of air rights is an instrument of national policy and the President should always keep this in mind.

When we grant air rights to other countries, we should make sure that the Philippines and its flag carriers get something in return. We will surrender our right to get something in return if we adopt open skies.

Since it seems that advocates of open skies are proposing a unilateral declaration of the Philippines of open skies, then our own carriers like Philippine Airlines and Cebu Pacific will still be subject to restrictions imposed by other countries even those whose airlines take advantage of our open skies.
The adoption of an open skies policy by the Aquino administration could be a death blow for Philippine Airlines which is already reeling from the global industry downturn —a situation that has been aggravated by the blow to the tourism industry brought about by the bloody Luneta hostage-taking incident.

FASAP as well as other unions of PAL should make sure that they would be used to justify a decision of government to adopt open skies.

Obviously some Aquino officials are just waiting for the opportunity to justify their recommendations to the President to adopt open skies.

The flight attendants and stewards might succeed in paralyzing PAL should they push through with their strike, but such a victory could by Pyrrhic if this causes the demise of the airline.

***

If there’s a contest for the most ridiculous ad of the year we would like to recommend that detergent ad which must have recruited the least discerning people for their comparison survey.
The television commercial features a comparison of two white polo shirts one is brand new and the other was deliberately stained with what looks like blue ink. According to the ad’s endorser, the shirt was then washed ten times in order to remove the stain.

The message of the ad, which features a popular television host/ talent manager as endorser, is that eight out of 10 people they picked thought that the stained shirt washed 10 times was the “new shirt”.
This claim is incredible. The agency that prepared this ad must have such a low regard for the intelligence of the general public who they thought would accept such a ridiculous claim hook line and sinker.

It would have been more credible if the claim was half of the people who participated said the washed shirt was the new shirt. That would have been enough to send out the message that the detergent is so good that people could not tell the difference between a new shirt and a shirt washed with the detergent being advertised.

However, to claim that 80 percent of the respondents said the washed shirt is the “new shirt” is preposterous.

It’s surprising that this absurd advertisement was passed by the Advertising Board of the Philippines (AdBoard). The AdBoard has been consistent in fulfilling its principle role of promoting consumer protection through self-regulation.

This particular ad, with its implausible claim, is an exception. We find it insulting. It makes us angry every time we see it on television because it reminds us how little the advertiser respects the public.

In search of a Solomonic decision

Manila Standard Today: Opinion
September 15, 2010

If we are to believe news reports, the government is determined to prevent members of the Flight Attendants’ and Stewards’ Association of the Philippines the union of the cabin attendants of Philippine Airlines, the beleaguered national carrier, to make good on their threat of going on strike soon. Exactly how the government intends to carry out this intent remains unclear although the President and Labor Secretary have been quite busy doing an impression of the “good cop - bad cop” routine.

To bring home the message that it is very serious about not getting embarrassed publicly again (at least not too soon after the public relations nightmare that was the August 23 hostage-taking incident), the President issued the warning that the government will prioritize national interest over the interest of PAL or its union of cabin attendants. Lots of people applauded the President’s statement of concern. It sure is nice to know that the President is keeping a close watch on the situation. The problem was that he didn’t stop there. He felt compelled to issue the warning that if a strike happens at PAL, the government would not hesitate to pursue its bid to open Philippine skies to other carriers, which caused a lot of people to groan inwardly.

Pursuing an open skies policy as a punitive measure is tantamount to throwing the baby along with the bath water. First of all, I don’t think such a major decision should be made out of anger, or in haste, or as a form of punishment or sanction. I don’t think the President should throw around such a threat just because he is pissed at the inability of a particular company to resolve a labor dispute. I understand that public interest is at stake here, but crippling the long-term viability of the national carrier in exchange for short-term gains just does not come across as a good example of management thinking.
Besides I am not sure such a punishment is merited. Labor disputes, by nature, require Solomonic decisions that allow parties to save face not win-lose or lose-lose solutions. And even if we grant - without necessarily conceding- that moving towards an open skies set up is an appropriate sanction for whatever offense that was made, why come up with a punitive measure that also penalizes other local airlines? Surely we have not forgotten that PAL is not the only local airline. Opening up Philippine skies also affects Cebu Pacific, Air Philippines, Zest Air, etc.

More importantly, such a threat does not really address the problem that triggered or necessitated it to begin with. It’s not as if the move to open skies policy can be done immediately. Just working out the deals with foreign airlines will take some time, not to mention ensuring that the terms of the 1987 Constitution on reciprocity is observed. Surely nobody thought that it will be a simple matter of just allowing foreign airlines to ply domestic routes?

And knowing how things work in our country, it will only be a matter of time before a national furor ensues as businessmen and industries take sides on the issue. Our legislators will eventually get involved and everything and everyone will get enmeshed in a complicated tangle of legal suits and countersuits. Why, a congressional hearing could even be possible. By then, PAL and its cabin attendants would probably have settled their dispute. Everyone would have realized by then that focusing attention on resolving the labor dispute would have been the better course of action.
I concede that an open skies policy is probably inevitable in the future. Like globalization, it is something that cannot be stopped. However, it would be a tragedy if we jump into such a policy in haste and without the necessary preparation. Obviously we are not ready yet, so dangling an open-skies policy as a solution at this point seems foolhardy.

As I write, PAL and representatives of its cabin attendants are undergoing marathon mediation hearings presided over by Labor Secretary Rosalinda Baldoz. Hope springs eternal, of course, so we join everyone in hoping that both parties come to an amicable settlement. My instincts as a human resource management professional, however, tell me that an amicable settlement is not going to be easy.

At the core of the dispute are allegations of sexist and discriminatory policies at PAL allegedly directed against the cabin attendants. The union is demanding that PAL throw out its current retirement policy, which sets various retirement ages for flight attendants depending on their hiring date. Female attendants hired before 1996 are mandated to retire at age 55 while their male counterparts are mandated to retire at age 60. The retirement age for those hired between 1996 and 2000 is set at 45 while those hired after 2000 are set to retire at age 40.

The demands seem reasonable on the surface and in this day and age of political correctness, cessation of employment based on age does seem like an antiquated concept. What the union, however, glosses over is that these retirement ages are stipulated in their collective bargaining agreement with PAL management. In short, they agreed to these. Moreover, the practical value of age limits for jobs that require a lot of physical and emotional pressure is highly debatable—I personally think that certain health risks get higher with age for certain people. Too bad we can’t have rules that are selective in application.

On the other hand, I agree that age limits contributes to “sexualization”— why do we continue to uphold this rather archaic notion that cabin attendants should look like models?—but unfortunately, PAL did not invent these rules. To my mind, the flight attendants knew about this set up and in fact capitalized on their physical assets when they applied for employment. I know a lot of PAL cabin attendants who take a lot of pride in their jobs precisely because everyone equates the job with good looks and youth. I think that this discussion has social relevance and has great implications on employment issues in the Philippines in general. I think that the issue requires longer and more comprehensive discussion.

If it is true that the union has not received salary increases in the last three years on account of stalled CBA negotiations, then they certainly have the right to demand for redress. However, I do not quite buy this assertion that PAL cabin attendants are paid low. I have come across a detailed breakdown of the compensation PAL flight attendants get and quite frankly, the number of allowances and add-ons boggles the mind.

We should all recognize that what we have here is a labor dispute and it is common practice for unions to strengthen their bargaining positions by portraying themselves as victims of oppression and injustice and for management to take the position that it cannot afford the union’s demands. This is why negotiations happen.

Unfortunately, the labor dispute threatens the public interest. Worse, the timing stinks. Both parties need to realize that they are headed for a lose-lose situation if they continue to keep a hard-line stance.

Stewardesses are not GROs

Theres The Rub
By Conrado de Quiros
Philippine Daily Inquirer
First Posted 09/14/2010

THE FIRST time I saw it was maybe 15 years ago, at an American Airlines flight. The fellow was a steward, uniformed like the others, trim like the others, capable like the others. With one exception. His hair was gray, his skin was blotched, and his face bore wrinkles. I figured he must be in his late 60s or early 70s.

He wasn’t just polite. He was pleasant, engaging the passengers in banter, for those who wanted to banter. He had a smile for everyone. After a while the novelty of his appearance (for me at least—it didn’t seem to strike the other passengers as so) wore off and he faded into the woodwork, or the cabin, just another member of the crew.

Soon after that, the sight became so common in various airlines you didn’t notice it anymore.
But the first time made you ask: Why on earth (or in the skies) not? Why should stewardesses look like the Girl from Ipanema? Flight attendants are not there to serve patrons, they are there to serve passengers. They are not there to entertain customers, particularly in their times of dire want, they are there to help commuters, particularly in their times of dire need.

That is the question Fasap (the Flight Attendants and Stewards Association of the Philippines) is asking PAL (Philippine Airlines). That is the answer Fasap is giving PAL.

For which it has filed a notice of strike.

I’ve known Fasap for about a decade and a half now and known it to be one of the most reasonable unions in the world. That is the reason for its success. It does not rush headlong into strikes. It does so only after exhausting other means. Other unions would do well to learn from it. Reasonableness is its middle name.

The working conditions of its female crew suck. That is the core of its cause. That is the reason it has served a notice to strike. It has nothing to do with more pay, more allowances, more benefits. It has everything to do with basic, minimum, elemental, justice. Two-thirds of Fasap’s 1,564 members are women.

Two things in particular Fasap wants to change.

The first is for PAL to scrap its de facto policy of criminalizing pregnancy for flight attendants. There is no other way to put it. You are a PAL stewardess and you get pregnant, you get to file a leave of absence without pay. The leave amounts to close to a year, given the two months for normal delivery and three months for caesarean you are required to take afterward. That period is taken away from your number of years of service. If you get pregnant three times in the 20 years that you work for PAL as a flight attendant, you will register only 17 years served.

That applies only to flight attendants. It’s different for the ground crew. They may work till they are about to deliver, have their 60-day leave paid for by the Social Security System, and come back to work shortly afterward. None of it is taken away from their record.

What makes the policy exceedingly laughable—the kind that makes you cry—is that male flight attendants who take a paternity leave do not have their leave taken out of their years of service. The policy is clear: You are innocent if you get your wife (or mistress) pregnant, but guilty if you yourself get pregnant.

Fasap in fact is simply asking for the period of pregnancy not to be discounted from the flight attendant’s years of service. The rest—what pay or benefits she should get in the course of her nearly-one-year leave—remains subject to negotiation. You can’t get more minimum than that. Other unions would criticize Fasap for being too tame. PAL is accusing it of being too spoiled.

The second, which bears directly on the first, is for PAL to stop parading its flight attendants as eye candy. There is no other way to put it. Since the mid-1990s, PAL has set the retirement age for flight attendants at 40. Too early to get SSS benefits and too late to start again elsewhere. The retirement age for the ground crew ranges from 60 to 65.

PAL says it is merely thinking about the flight attendants’ welfare—they shouldn’t be flying past that age. That is refuted by several things. One is that other airlines now routinely have flight attendants who are senior citizens. There have been no reported cases of them tottering and dying from a heart attack while serving drinks. Two is that the retirement age for PAL’s pilots is 60 for both men and women. Why should the risks be higher for flight attendants than for pilots? And three is that the line administrators, the officers who fly to rate the flight attendants’ performance, retire at 65.
Elsewhere, the point is to be fit. But PAL’s point is that fit means young. Fit means not being pregnant. Fit means fit to ogle, fantasize on, flirt with. That is the only explanation for the patent discrimination. That might have been acceptable once with airlines, during Cro-Magnon times, but that is no longer so today. For good reason: It is an exploitative view of flight attendants, and the world will have nothing to do with it. Flight attendants undergo training, undergo skills-building, undergo ordeals with exceptionally rough flights and even more exceptionally rough passengers. They are not in flights to pretend, they are in flights to attend. That is why they are called flight attendants.

What Fasap wants is merely the same retirement terms as the ground crew and the pilots. It does even better, which is to propose that retirement be based on years of service—counting pregnancies—and not age. Other unions would criticize Fasap for being too restrained. PAL is accusing it of being too out of its mind.

Well, truth has a way of coming out, these days more than others. Quite simply, the flight attendants’ notice of strike serves notice:

PAL is not Pegasus, and flight attendants are not GROs.

How much do PAL cabin attendants get?

As I See It
By Neal Cruz
Philippine Daily Inquirer
First Posted 09/13/2010

THE FLIGHT Attendants and Stewards Association (FASAP) of the Philippine Airlines (PAL) has filed a notice of strike against the money-losing flag carrier because the airline refused to give in to their demands for more benefits. PAL has been losing heavily, as do most airlines—with the exception of some Middle Eastern airlines that are heavily subsidized by their oil-rich governments—because of the world economic crisis.

Public sympathy is usually with the workers; management is often painted as profit-hungry employers exploiting their employees. PAL is no exception. In addition, PAL is accused of having a “beerhouse mentality” for having a policy of retiring its flight attendants when they reach the age of 40 because it wants its attendants to always look young and beautiful. In comparison, Northwest Airlines of the United States has grandmothers as flight attendants. If Northwest can do it, why can’t PAL? After all, many women are still pretty and attractive at 40 and older.

But that is only the propaganda part. Even if PAL raises the retirement age of its flight attendants, FASAP will still not be happy because it is asking for pay increases and more perks.
But PAL can no longer afford to pay more because of its series of financial losses due to the economic slowdown which has fewer and fewer people traveling. In the last two years alone, PAL lost $300 million because of worsening factors. PAL listed these factors as:

Sluggish market demand due to the global economic crisis;

The downgrading of the Philippines to Category 2 by the US Federal Aviation Administration;
The ban on all Philippine carriers from flying into European airspace imposed by the European Union;
High fuel prices;

The liberal grant of air traffic rights by the Philippine government to foreign carriers;
The inadequate and below-par infrastructure and equipment at major domestic airports.
What’s more, PAL’s cabin crews are not exactly getting peanuts. The cabin attendants’ package of benefits far exceeds those of ground and management staff. Aside from the standard 13th and 14th month pay, travel, medical and uniform benefits, cabin attendants also get allowances that rival the allowances and bonuses of the Metropolitan Waterworks and Sewerage System and other GOCCs (government-owned and -controlled corporations). PAL cabin crews receive the following in addition to their regular salaries:

Productivity allowance;
Transportation allowance;
First-class hotel accommodation;
Per diem;
Rice subsidy;
Field reserve pay;
Training pay;
Temporary duty pay;
Tour of duty incentive (beyond 14 hours of duty)
Long-haul flight incentive;
Bar sales commission (in-flight duty-free sales). PAL’s cabin crews get the highest rate of in-flight sales commission compared to other airlines in the region;
Flight diversion allowance;
Hazard pay;
Dead-head allowance.
Cabin attendants also cannot claim that they are overworked. They are entitled to enviable rest periods under their Collective Bargaining Agreement (CBA):
One rest day in Manila before a long-haul flight;
One-and-a-half rest day in an outlying station after a long-haul flight;
Days off equivalent to half the number of days away from Manila;
One extra day off after enjoying several days of vacation before reporting for duty;

The cabin crews are entitled to rest periods during a 13-hour flight (for example, a B747 aircraft on a trans-Pacific flight). After serving meals, when the passengers are asleep, the cabin crew can also rest. But even while resting, they earn productivity pay. Whether or not the flight is full, they still get the completed package of allowances;

Under the rules of the Civil Aviation Authority of the Philippines, flight attendants can be assigned only 100 flying hours a month, but actual work rendered averages only 65 hours;

PAL does not discriminate against pregnant flight attendants. Preventing them from flying is for the safety of mother and child. Many cabin attendants delay revealing that they are pregnant. PAL extends the standard maternity benefits provided by law, even advancing P30,000 of their SSS benefits to cover expenses. Any earned vacation leaves may be used before applying the pregnancy and maternity leaves. Seniority is not lost during pregnancy. Beyond these, the pregnant cabin attendant is no longer entitled to any pay (no work, no pay) just like any ground staff member.
From April 2009 to March 2010, a total of 65 cabin attendants went on maternity leave (or roughly one pregnancy every six days). Almost all of them returned to work again despite allegations of unfair work rules or discriminatory practices.

As for the regular pay, the cabin crews’ pay (which is all-inclusive because of the peculiarity of their job), the domestic cabin attendant gets on the average around P40,000 a month, while an international cabin attendant gets P60,000 a month. The flight purser gets P80,000 monthly.

As for the retirement policy, the 40-year retirement age is part of the PAL-FASAP CBA signed in 2001. FASAP was not forced to sign the CBA and yet, nine years later, FASAP insists the provision is discriminatory.

PAL management said it is willing to discuss the retirement age provision in the next CBA negotiation for 2010 to 2015.

Additionally, management said major airlines in the region have similar young retirement ages for their cabin crews. PAL has to compete with these carriers that put a high premium on image, especially on frontliners like the cabin crew, management said.

PAL seeks the riding public’s understanding, hoping FASAP will return to the negotiating table and not cause undue public alarm with their threat of a strike.