PAL moves to stem more pilot resignations

By Paolo Montecillo
Philippine Daily Inquirer
First Posted 18:54:00 08/05/2010

MANILA, Philippines – Philippine Airlines has moved to staunch the mass resignation of pilots that has led to the cancellation of several flights over the past few days.

The Department of Transportation and Communications on Thursday said PAL has submitted a list of undertakings meant to prevent any more of its pilots from leaving the company.

The principal of these is the company’s pledge that none of its remaining pilots would be moved to PAL’s sister company Air Philippines, the Lucio Tan group’s budget airline being groomed to go head-to-head against Cebu Pacific.

“This is a very determined step to end PAL’s problems with its pilots,” Transportation and Communication Undersecretary Dante Velasco said.

PAL’s three-pronged commitment to solve the current pilot crisis, which will be presented to President Benigno Aquino III, was a result of a series of meetings with DoTC officials.

Other commitments by PAL include the publication of its new daily flight schedule, to ensure that affected passengers are informed about the changes in their bookings ahead of time. The company also pledged to keep an open line of communication with its pilots, who, unlike other PAL employees, are not represented by a union.

But Velasco admitted that PAL’s move to transfer pilots to Air Philippines was the biggest a source of resentment among the pilots.

This led to the resignation of a total of 26 pilots, the latest being on Wednesday. The pilots were reported to have left the country to take higher-paying jobs abroad. This resulted in the lack of pilots to man the company’s fleet of Airbus A320 and A310 aircraft.

Velasco explained that the airline’s management implemented a cost-cutting program earlier this year that involved the transfer of several senior and junior pilots to Air Philippines. The pilots were given lower salaries, with the company claiming that these were “low-cost carrier rates.”

PAL was forced to implement several cost-cutting measures after suffering close to $300 million in losses in the fiscal years 2008 to 2009.

“But PAL did not expect that there would be a recovery in passenger volumes later in the year,” Velasco said. “Thus, PAL adopted a strategy of high-volume, low margins as opposed to its current high-margin and low-volume business model,” he said.

Velasco said this was a “realization” on the part of PAL for the need to keep an open communication line with its pilots and other employees.

Aside from the issue with its pilots, PAL is also dealing with disputes with its flight attendants and ground employees.

Flight attendants have threatened work stoppages in protest of PAL’s policy of forcing the cabin crew to retire at the age of 40, when all other PAL workers are allowed to work until the age of 60.
Ground employees are also protesting PAL’s plan to outsource 2,600 jobs initially also as part of cost-cutting efforts.

“What I see here is we have set the tone of the way other labor issues can be settled so we expect [PAL] to follow the mold of dialogue and to be more open-minded,” Velasco said.
PAL officials could not be reached for comment as of Thursday evening.

Following PAL’s moves, Velasco said the government would take a “watchful but hands-on” approach to the issue to “allow management to settle its differences with its pilots as they belong to one corporate family.”