The Manila Times
August 29, 2009
By Darwin G. Amojelar
DESPITE the company’s plan to cut its workforce, Philippine Airlines (PAL) on Friday announced it will beef up its domestic operations with new routes and destinations.
In a statement, the Lucio Tan-owned company said it will introduce a new Cebu-Davao and Davao-Cebu service using the wide-body Airbus A330 starting September 1.
Its budget airline, PAL Express will add another daily Cebu-Iloilo-Cebu flight using the 76-seater Q400 turboprop aircraft.
Surigao and Naga are also being added to the PAL Express network with daily flights to Surigao and twice a day service to Naga.
Earlier, Jaime Bautista, PAL president and chief operating officer, said it would cut its workforce and flight capacity abroad to cope withJustify Full the global economic slowdown.
“We are currently reviewing our entire organizational set-up,” Bautista said, adding that the crisis has changed the face of the industry which is among the sectors hardest hit by the global crisis.
“We don’t know yet how many will be affected. For now, we don’t have a target. I talked to the union about the plan yesterday. In a few weeks, we will know how many will be affected,” he added.
At end-March, PAL had a workforce of 8,052. Of the total, 472 are pilots and 1,593 are cabin crew.
Bautista said the airline’s cost-cutting measures will not infringe on its safety compliance and standards.
PAL will reduce flight capacity to the US, Canada, Australia, Japan and Hong Kong, he said.
About 7 percent of the airline’s total capacity would be reduced effective this month until March 2010.
At end-March, PAL’s route network covered 29 points in the Philippines and 31 international destinations.
The company reported a net income of $35.5 million from April to June, down by $9.6 million over the same period last year.
Revenues dropped by 12 percent to $394 million compared with $446.9 million for the same period in 2008.
PAL blamed the lower revenues on the 25-percent decrease in passenger revenues of $95 million as passenger traffic and yields continued to decline.
For its fiscal year ending March, PAL posted a net loss of $301 million from a net profit of $30.6 million in the fiscal year ending March 2008.
The company’s total expenses for the first quarter amounted to $358.5 million, 11 percent better than the previous year’s $401.8 million. Fuel comprised 44 percent of its operating expenses.
Sunday, August 30, 2009
Saturday, August 29, 2009
PAL looking to trim staff, operations
Business World
August 28, 2009
PHILIPPINE AIRLINES, Inc. (PAL), which over a decade ago was forced into receivership by the Asian crisis, is once again facing a fight for survival, its president yesterday said.
Burdened with debt and ballooning costs, the company is now looking at various options, including selling aircraft, reducing flights, and letting go of employees. It is also on lookout for potential white knights who can ease its financial woes, PAL President and CEO Jaime J. Bautista said.
"We will take decisive steps like rationalizing [our] workforce, realigning operations to match demand and other cost-cutting measures to survive the crisis currently plaguing airlines worldwide," he said.
In a statement, PAL quoted Mr. Bautista as saying, "Extraordinary times call for extraordinary measures."
PAL lost $301.4 million for its fiscal year ending March 2009 as a result of higher expenses brought about by the cost of operating more flights and last year’s record-high fuel prices. Fuel accounts for 44% of the airline’s expenses.
The carrier earned $30.6 million a year earlier.
Revenues went up slightly to P1.6 billion but were not enough to cover operating expenses of $1.9 billion, up from $1.539 billion the previous year. Total liabilities also went up by almost a fifth to $869 million, while total assets decreased by $60.6 million to $1.971 billion.
Mr. Bautista told BusinessWorld the company was considering offering early retirement packages, executive pay cuts, and giving workers "breaks for a few days."
"There is still no definite program how to address this. Normally, when you make decisions to reduce manpower, you look at other possible measures first. [Reducing our employees] is the last recourse," he said.
The airline currently has more than 8,000 employees.
Mr. Bautista said PAL had adopted various measures to cut operating expenses, including the reduction of international flights.
Flights to Los Angeles, for instance, are now down to seven per week from nine, while those for San Francisco have been cut to seven from eight per week.
Next month, PAL will reduce its Vancouver flights to just five per week from daily.
While the number of domestic passengers rose by 17% during the first quarter, the number of international passengers slipped by 8%, mostly because of slowing demand from the US.
The airline will also sell a Boeing 737 to raise some $8-10 million. While it will push through with the delivery of Boeing 777-300ERs this year, Mr. Bautista said plane purchases were on hold.
PAL shareholders yesterday approved a quasi-reorganization plan, reducing the par value of the firm’s shares to P0.20 from P0.80 per share. It will also increase its authorized capital stock to P20 billion from P16 billion, divided into 100 billion shares at P0.20 per share.
"The airline reduced its par value to attract investors to invest in PAL. Hopefully the present shareholders will put in equity," Mr. Bautista said.
Outsiders may be invited to buy new shares, he said.
Tobacco tycoon Lucio Tan owns 86% of PAL.
"There is still no definite figure as to how much [in new shares will be] sold. We are also closely working with our financial advisers to tap the debt market but credit is quite tight right now. There is no definite plan how much we might borrow," he said.
PAL in 1998 was forced to file for receivership, citing the impact of a the Asian financial crisis. It returned to profit in 2000 and was declared in financial health two years ago.
"Hopefully the 1998 incident will not happen again but right now the company is working on a rationalizing program. We have tightened our belt in PAL [because] we really need to [cut costs]. This is another challenging year and hopefully the market rebounds and we will able to generate the cash," Mr. Bautista said. — K. J. R. Liu with JF
August 28, 2009
PHILIPPINE AIRLINES, Inc. (PAL), which over a decade ago was forced into receivership by the Asian crisis, is once again facing a fight for survival, its president yesterday said.
Burdened with debt and ballooning costs, the company is now looking at various options, including selling aircraft, reducing flights, and letting go of employees. It is also on lookout for potential white knights who can ease its financial woes, PAL President and CEO Jaime J. Bautista said.
"We will take decisive steps like rationalizing [our] workforce, realigning operations to match demand and other cost-cutting measures to survive the crisis currently plaguing airlines worldwide," he said.
In a statement, PAL quoted Mr. Bautista as saying, "Extraordinary times call for extraordinary measures."
PAL lost $301.4 million for its fiscal year ending March 2009 as a result of higher expenses brought about by the cost of operating more flights and last year’s record-high fuel prices. Fuel accounts for 44% of the airline’s expenses.
The carrier earned $30.6 million a year earlier.
Revenues went up slightly to P1.6 billion but were not enough to cover operating expenses of $1.9 billion, up from $1.539 billion the previous year. Total liabilities also went up by almost a fifth to $869 million, while total assets decreased by $60.6 million to $1.971 billion.
Mr. Bautista told BusinessWorld the company was considering offering early retirement packages, executive pay cuts, and giving workers "breaks for a few days."
"There is still no definite program how to address this. Normally, when you make decisions to reduce manpower, you look at other possible measures first. [Reducing our employees] is the last recourse," he said.
The airline currently has more than 8,000 employees.
Mr. Bautista said PAL had adopted various measures to cut operating expenses, including the reduction of international flights.
Flights to Los Angeles, for instance, are now down to seven per week from nine, while those for San Francisco have been cut to seven from eight per week.
Next month, PAL will reduce its Vancouver flights to just five per week from daily.
While the number of domestic passengers rose by 17% during the first quarter, the number of international passengers slipped by 8%, mostly because of slowing demand from the US.
The airline will also sell a Boeing 737 to raise some $8-10 million. While it will push through with the delivery of Boeing 777-300ERs this year, Mr. Bautista said plane purchases were on hold.
PAL shareholders yesterday approved a quasi-reorganization plan, reducing the par value of the firm’s shares to P0.20 from P0.80 per share. It will also increase its authorized capital stock to P20 billion from P16 billion, divided into 100 billion shares at P0.20 per share.
"The airline reduced its par value to attract investors to invest in PAL. Hopefully the present shareholders will put in equity," Mr. Bautista said.
Outsiders may be invited to buy new shares, he said.
Tobacco tycoon Lucio Tan owns 86% of PAL.
"There is still no definite figure as to how much [in new shares will be] sold. We are also closely working with our financial advisers to tap the debt market but credit is quite tight right now. There is no definite plan how much we might borrow," he said.
PAL in 1998 was forced to file for receivership, citing the impact of a the Asian financial crisis. It returned to profit in 2000 and was declared in financial health two years ago.
"Hopefully the 1998 incident will not happen again but right now the company is working on a rationalizing program. We have tightened our belt in PAL [because] we really need to [cut costs]. This is another challenging year and hopefully the market rebounds and we will able to generate the cash," Mr. Bautista said. — K. J. R. Liu with JF
Wednesday, August 26, 2009
Tan ejects brother as turbulence hits PAL
August 25, 2009
Manila Standard Today
by Roderick T. dela Cruz
PAL Holdings, the holding company of Philippine Airlines, has elected a brother of taipan Lucio Tan as its chairman to replace another brother, Mariano Tanenglian, who was removed from the board.
In a disclosure to the stock exchange, PAL Holdings said Harry Tan was appointed the holding firm’s new chairman, replacing Tanenglian as a part of a reorganization of its board committees.
The company did not cite the reasons for the change, but it was believed to have been caused by an unresolved feud between Lucio Tan and his younger brother Tanenglian.
Tanenglian was earlier removed from the board of the Philippine National Bank and Eton Properties Philippines, both of which are controlled by Lucio Tan.
The rift between the two brothers reached a boiling point when Tanenglian threatened to testify for the government in its ill-gotten-wealth cases against his older brother.
Lawyers representing Tanenglian yesterday distributed a copy of a letter to the Presidential Commission on Good Government dated Aug. 19, reminding the agency of their client’s offer to testify against his brother in exchange for immunity for himself and his family.
“Up to the present... after the lapse of more than one month, our client’s offer of cooperation and request for such grant of immunity have not yet been acted upon,” the letter from the Azura Quiroz & Campos law office said.
“In the meantime, the window of opportunity is fast approaching (sic).”
The letter ended with the suggestion that further delay by the commission would be interpreted as the result of pressure “by a very influential party” involved in the case.
In its board reorganization, PAL Holdings also appointed Michael Tan, a son of the taipan, a member of the Audit Committee in place of Enrique Cheng.
Lucio Tan Jr., another son of the taipan, and Juanita Tan Lee were appointed alternate members of the same committee.
Lucio Tan remains chairman of the airline itself while Bautista remains president.
The directors of PAL Holdings nominated for fiscal year 2009-2010 include Lucio Tan, Harry Tan, Jaime Bautista, Domingo Chua, Lucio Tan Jr., Michael Tan, Juanita Tan Lee, and Wilson Young. The independent directors were Johnip Cua, Antonino Alindogan Jr. and Enrique Cheng.
PAL booked a comprehensive income of $35.5 million in the April-June period, which represents the first quarter of its fiscal year.
But the airline said the amount was down by $9.6 million over the same period last year because of declining passenger volume.
The airline incurred a net loss of $301 million in the fiscal year ending March 2009, reversing a net profit of $30.6 million a year earlier.
The airline operates 47 aircraft that fly to 29 domestic destinations and 31 international routes. It employs 8,052 workers and does not expect to hire more employees within the next 12 months.
Manila Standard Today
by Roderick T. dela Cruz
PAL Holdings, the holding company of Philippine Airlines, has elected a brother of taipan Lucio Tan as its chairman to replace another brother, Mariano Tanenglian, who was removed from the board.
In a disclosure to the stock exchange, PAL Holdings said Harry Tan was appointed the holding firm’s new chairman, replacing Tanenglian as a part of a reorganization of its board committees.
The company did not cite the reasons for the change, but it was believed to have been caused by an unresolved feud between Lucio Tan and his younger brother Tanenglian.
Tanenglian was earlier removed from the board of the Philippine National Bank and Eton Properties Philippines, both of which are controlled by Lucio Tan.
The rift between the two brothers reached a boiling point when Tanenglian threatened to testify for the government in its ill-gotten-wealth cases against his older brother.
Lawyers representing Tanenglian yesterday distributed a copy of a letter to the Presidential Commission on Good Government dated Aug. 19, reminding the agency of their client’s offer to testify against his brother in exchange for immunity for himself and his family.
“Up to the present... after the lapse of more than one month, our client’s offer of cooperation and request for such grant of immunity have not yet been acted upon,” the letter from the Azura Quiroz & Campos law office said.
“In the meantime, the window of opportunity is fast approaching (sic).”
The letter ended with the suggestion that further delay by the commission would be interpreted as the result of pressure “by a very influential party” involved in the case.
In its board reorganization, PAL Holdings also appointed Michael Tan, a son of the taipan, a member of the Audit Committee in place of Enrique Cheng.
Lucio Tan Jr., another son of the taipan, and Juanita Tan Lee were appointed alternate members of the same committee.
Lucio Tan remains chairman of the airline itself while Bautista remains president.
The directors of PAL Holdings nominated for fiscal year 2009-2010 include Lucio Tan, Harry Tan, Jaime Bautista, Domingo Chua, Lucio Tan Jr., Michael Tan, Juanita Tan Lee, and Wilson Young. The independent directors were Johnip Cua, Antonino Alindogan Jr. and Enrique Cheng.
PAL booked a comprehensive income of $35.5 million in the April-June period, which represents the first quarter of its fiscal year.
But the airline said the amount was down by $9.6 million over the same period last year because of declining passenger volume.
The airline incurred a net loss of $301 million in the fiscal year ending March 2009, reversing a net profit of $30.6 million a year earlier.
The airline operates 47 aircraft that fly to 29 domestic destinations and 31 international routes. It employs 8,052 workers and does not expect to hire more employees within the next 12 months.
Saturday, August 22, 2009
Why arroz caldo is on PAL’s menu?
Philippine Daily Inquirer
August 21, 2009
By Gil Carolino
In 1987, Malacañang appointed me to be a member of The Committee on State Visits of President Corazon C. Aquino. I was then with Philippine Airlines and this unexpected appointment gave me the distinct privilege of going with Tita Cory on all her trips abroad. She made only a handful, less than a dozen (nothing compared to the more than 50 and 30 trips of two Philippine presidents), but they were more than enough for me to know Tita Cory up close and personal.
Tita Cory never gave the PAL crew any problem. She never demanded anything as far as service was concerned, like asking for special and elaborate meals. The only thing that she asked to be served was arroz caldo which, after that, became a standard feature of PAL’s inflight meals.
Tita Cory was very pleasant with the crew and everyone on the plane, including the regular passengers whom Tita Cory sought so she could have even a short conversation with them inside the plane. Everyone was awed by Tita Cory’s simplicity and pure heart.
Lunch at Arlegui
I am neither a close family friend nor an official of her administration, yet, very early on during her presidency, Tita Cory invited me and my wife to have lunch one Sunday with her children (Noynoy and Kris were not there) at the Arlegui residence inside the Malacañang compound. There we saw a fine lady, not the President of the land, but the loving mother to Ballsy, Pinky and Viel and their spouses, and the very doting lola (grandmother) to her apos (grandchildren).
And, how could you not be forever grateful to Tita Cory if she showed genuine concern for your safety and welfare of your family?
A few weeks before the outbreak of the 1991 Gulf war, I was all packed up to be based in Dubai, UAE, to be PAL’s regional vice president/GM for the Middle East. As a matter of respect, I called up the Office of the President and told Tita Cory’s eldest daughter Ballsy to inform the President about it. Before I could even hang up, Tita Cory was already on the line and asked me, “O, gusto mo ba yan?” to which I answered in the affirmative. She might have felt differently because a few minutes after we talked, then PAL Chair and now Quezon City Mayor Sonny Belmonte called me to his office and told me, “O, tumawag si Tita Cory, ayaw ka niyang ma-assign don kasi may guerra daw don.”
Out of harm’s way
I could not describe my feelings. I was simply overwhelmed because, to me, it was unimaginable that the President of the Philippines, who had far more important things to attend to, would personally go out of her way to do that.
Napakahalaga ng buhay ng tao sa kanya. She showed it again when she, subsequently, directed PAL to operate special flights to evacuate her countrymen who had no way out as they were stranded in the region during that most critical period. Tita Cory personally followed up the developments and actual operations of the special flights
which, I thought, she could just have assigned to her Cabinet and staff to coordinate with PAL.
Tita Cory is gone. However, our spontaneous outpouring of grief and sadness is solid proof that we fully embrace the ideals and aspirations she wholeheartedly and endlessly fought for. Let us keep the fire brightly glowing until another Tita Cory comes, though I feel sad realizing the fact that that time will be beyond my lifetime.
August 21, 2009
By Gil Carolino
In 1987, Malacañang appointed me to be a member of The Committee on State Visits of President Corazon C. Aquino. I was then with Philippine Airlines and this unexpected appointment gave me the distinct privilege of going with Tita Cory on all her trips abroad. She made only a handful, less than a dozen (nothing compared to the more than 50 and 30 trips of two Philippine presidents), but they were more than enough for me to know Tita Cory up close and personal.
Tita Cory never gave the PAL crew any problem. She never demanded anything as far as service was concerned, like asking for special and elaborate meals. The only thing that she asked to be served was arroz caldo which, after that, became a standard feature of PAL’s inflight meals.
Tita Cory was very pleasant with the crew and everyone on the plane, including the regular passengers whom Tita Cory sought so she could have even a short conversation with them inside the plane. Everyone was awed by Tita Cory’s simplicity and pure heart.
Lunch at Arlegui
I am neither a close family friend nor an official of her administration, yet, very early on during her presidency, Tita Cory invited me and my wife to have lunch one Sunday with her children (Noynoy and Kris were not there) at the Arlegui residence inside the Malacañang compound. There we saw a fine lady, not the President of the land, but the loving mother to Ballsy, Pinky and Viel and their spouses, and the very doting lola (grandmother) to her apos (grandchildren).
And, how could you not be forever grateful to Tita Cory if she showed genuine concern for your safety and welfare of your family?
A few weeks before the outbreak of the 1991 Gulf war, I was all packed up to be based in Dubai, UAE, to be PAL’s regional vice president/GM for the Middle East. As a matter of respect, I called up the Office of the President and told Tita Cory’s eldest daughter Ballsy to inform the President about it. Before I could even hang up, Tita Cory was already on the line and asked me, “O, gusto mo ba yan?” to which I answered in the affirmative. She might have felt differently because a few minutes after we talked, then PAL Chair and now Quezon City Mayor Sonny Belmonte called me to his office and told me, “O, tumawag si Tita Cory, ayaw ka niyang ma-assign don kasi may guerra daw don.”
Out of harm’s way
I could not describe my feelings. I was simply overwhelmed because, to me, it was unimaginable that the President of the Philippines, who had far more important things to attend to, would personally go out of her way to do that.
Napakahalaga ng buhay ng tao sa kanya. She showed it again when she, subsequently, directed PAL to operate special flights to evacuate her countrymen who had no way out as they were stranded in the region during that most critical period. Tita Cory personally followed up the developments and actual operations of the special flights
which, I thought, she could just have assigned to her Cabinet and staff to coordinate with PAL.
Tita Cory is gone. However, our spontaneous outpouring of grief and sadness is solid proof that we fully embrace the ideals and aspirations she wholeheartedly and endlessly fought for. Let us keep the fire brightly glowing until another Tita Cory comes, though I feel sad realizing the fact that that time will be beyond my lifetime.
Wednesday, August 5, 2009
PAL raising capital to P20B
Manila Standard Today
August 4, 2009
by Jenniffer B. Austria
Philippine Airlines Inc., owned by tobacco magnate Lucio Tan, is increasing its authorized capital stock to P20 billion from P16 billion after posting a huge loss last year.
“[PAL] is currently exploring various options to raise additional capital to help improve its equity position after the loss incurred in the fiscal year 2008-2009. By increasing the authorized capital stock, the company will have additional shares available for future investors,” PAL said in a filing with the Securities and Exchange Commission.
PAL has an authorized capital stock of P16 billion divided into 20 billion common shares with a par value of P0.80 a share.
PAL plans to reduce the par value of the shares from P0.80 to P0.20 and later increase its authorized capital stock to P20 billion, divided into 100 billion common shares at par value of P0.20 a share.
The airline firm has not finalized the number of common shares to be offered to potential investors.
PAL reported a net loss of $301 million in fiscal year ending March, a reversal from a profit of $30.6 million in the previous year.
Revenue rose 8.7 percent to $1.6 billion on higher passenger sales.
Expenses, however, jumped 23.4 percent, or $361 million, due to higher fuel cost.
“The rise in fuel cost by 77.7 percent over the last year’s figure of $470 million was a result of an increase in the average fuel price per barrel of $89 in 2008 to $123 million in 2009,” PAL said.
The flag carrier launched several initiatives to counter the impact of high energy prices, including the creation of a fuel conservation watchdog within the company, and reduced the free baggage allowance on trans-Pacific routes.
PAL is a subsidiary of PAL Holdings Inc., a listed company.
The flag carrier flies to the most popular domestic airline routes and to international and regional points that are either mostly visited by Filipinos or a good source of visitors to the Philippines.
PAL’s route network covered 29 points in the Philippines and 31 international destinations, including Guam, Honolulu, Las Vegas, Los Angeles, San Francisco, Vancouver, Melbourne, Sydney, Fukuoka, Nagoya, Osaka, Tokyo, Pusan, Seoul, Hong Kong, Macau, Beijing, Shanghai, Xiamen, Taipei, Bangkok, Saigon, Singapore and Jakarta.
August 4, 2009
by Jenniffer B. Austria
Philippine Airlines Inc., owned by tobacco magnate Lucio Tan, is increasing its authorized capital stock to P20 billion from P16 billion after posting a huge loss last year.
“[PAL] is currently exploring various options to raise additional capital to help improve its equity position after the loss incurred in the fiscal year 2008-2009. By increasing the authorized capital stock, the company will have additional shares available for future investors,” PAL said in a filing with the Securities and Exchange Commission.
PAL has an authorized capital stock of P16 billion divided into 20 billion common shares with a par value of P0.80 a share.
PAL plans to reduce the par value of the shares from P0.80 to P0.20 and later increase its authorized capital stock to P20 billion, divided into 100 billion common shares at par value of P0.20 a share.
The airline firm has not finalized the number of common shares to be offered to potential investors.
PAL reported a net loss of $301 million in fiscal year ending March, a reversal from a profit of $30.6 million in the previous year.
Revenue rose 8.7 percent to $1.6 billion on higher passenger sales.
Expenses, however, jumped 23.4 percent, or $361 million, due to higher fuel cost.
“The rise in fuel cost by 77.7 percent over the last year’s figure of $470 million was a result of an increase in the average fuel price per barrel of $89 in 2008 to $123 million in 2009,” PAL said.
The flag carrier launched several initiatives to counter the impact of high energy prices, including the creation of a fuel conservation watchdog within the company, and reduced the free baggage allowance on trans-Pacific routes.
PAL is a subsidiary of PAL Holdings Inc., a listed company.
The flag carrier flies to the most popular domestic airline routes and to international and regional points that are either mostly visited by Filipinos or a good source of visitors to the Philippines.
PAL’s route network covered 29 points in the Philippines and 31 international destinations, including Guam, Honolulu, Las Vegas, Los Angeles, San Francisco, Vancouver, Melbourne, Sydney, Fukuoka, Nagoya, Osaka, Tokyo, Pusan, Seoul, Hong Kong, Macau, Beijing, Shanghai, Xiamen, Taipei, Bangkok, Saigon, Singapore and Jakarta.
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