First posted 18:07:21 (Mla time) July 31, 2010
Agence France-Presse
MANILA, Philippines – (UPDATE) Flag-carrier Philippine Airlines (PAL) said Saturday it had to cancel several domestic and international flights after some of its pilots quit without giving enough notice.
Three flights to Hong Kong and at least eight domestic flights were cancelled after pilots left to join airlines abroad, PAL said in a statement.
"The indiscriminate resignation of the A320 pilots... is in violation of their contract with PAL as well as with pertinent government regulations that require resigning pilots to give PAL six months' notice," the statement said.
The airline said it would be filing "appropriate charges" against the pilots who still owe PAL for the cost of their training.
The statement did not say how many pilots had resigned or where they were going to work. Airline spokesmen could not be contacted for comment.
However sources in the PAL employees' union said the resignations were in reaction to a plan by the airline to lay off thousands of employees and outsource their positions.
President Benigno Aquino III said the government was meeting with PAL management to arrange a new schedule to make up for the lost pilots.
He also said the transport and labor departments would be looking into the matter.
The local aviation sector has been embroiled in several controversies in recent months such as a shortage of air navigation equipment at Manila airport and growing labor unrest at PAL, the largest domestic carrier.
Saturday, July 31, 2010
Pilot shortage forces PAL flight cancellations
First posted 21:31:50 (Mla time) July 31, 2010
Paolo Montecillo
Philippine Daily Inquirer
MANILA, Philippines—(UPDATE) The sudden exodus of pilots lured to higher-paying foreign carriers forced Philippines Airlines to cancel several domestic and international flights Saturday morning.
PAL said close to a dozen pilots assigned to 150-seat Airbus A320 aircraft used on domestic and international routes had resigned in the last two weeks.
“PAL regrets the decision of some of its pilots to accept job offers abroad, causing the disruption of PAL's flight schedules due to inadequate flight deck crew to fly the Airbus A320 airplanes,” the company said in a press statement.
“The indiscriminate resignation of the A320 pilots for flying jobs whose salaries PAL is unable to match, is in violation of their contracts with PAL as well as with pertinent government regulations that require resigning pilots to give PAL six months to train their replacements,” it added.
Spokesman Jonathan Gesmundo said the resignations were not an organized move although they were of the same nature and were only days apart.
At least five flights from Manila to Bacolod, Iloilo, Cagayan de Oro, Cebu and Hong Kong were cancelled on Saturday.
Gesmundo said the pilots who left PAL were mostly new hires. “The A320 is the first jet a pilot flies after graduating from aviation school,” he said.
As a result, he said, most of these pilots still owe the company for the flight training tuition that PAL subsidized. Each pilot owes as much as P2 million, Gesmundo said, adding that all of the pilots said they would be able to repay what they owe PAL, thanks to the high salaries they will be getting.
Right now, the company statement said it has asked “management pilots,” or former pilots that have been promoted to supervisory posts, to fly the while the company looks for replacements.
PAL said it was also adjusting its schedules by merging some flights or upgrading the aircraft to a bigger type in order to lessen the inconvenience to affected passengers.
Paolo Montecillo
Philippine Daily Inquirer
MANILA, Philippines—(UPDATE) The sudden exodus of pilots lured to higher-paying foreign carriers forced Philippines Airlines to cancel several domestic and international flights Saturday morning.
PAL said close to a dozen pilots assigned to 150-seat Airbus A320 aircraft used on domestic and international routes had resigned in the last two weeks.
“PAL regrets the decision of some of its pilots to accept job offers abroad, causing the disruption of PAL's flight schedules due to inadequate flight deck crew to fly the Airbus A320 airplanes,” the company said in a press statement.
“The indiscriminate resignation of the A320 pilots for flying jobs whose salaries PAL is unable to match, is in violation of their contracts with PAL as well as with pertinent government regulations that require resigning pilots to give PAL six months to train their replacements,” it added.
Spokesman Jonathan Gesmundo said the resignations were not an organized move although they were of the same nature and were only days apart.
At least five flights from Manila to Bacolod, Iloilo, Cagayan de Oro, Cebu and Hong Kong were cancelled on Saturday.
Gesmundo said the pilots who left PAL were mostly new hires. “The A320 is the first jet a pilot flies after graduating from aviation school,” he said.
As a result, he said, most of these pilots still owe the company for the flight training tuition that PAL subsidized. Each pilot owes as much as P2 million, Gesmundo said, adding that all of the pilots said they would be able to repay what they owe PAL, thanks to the high salaries they will be getting.
Right now, the company statement said it has asked “management pilots,” or former pilots that have been promoted to supervisory posts, to fly the while the company looks for replacements.
PAL said it was also adjusting its schedules by merging some flights or upgrading the aircraft to a bigger type in order to lessen the inconvenience to affected passengers.
PAL pilots quit; flights cancelled
First posted 23:37:18 (Mla time) July 31, 2010
Paolo Montecillo
Philippine Daily Inquirer
THE WEATHER was fine but Philippine Airlines had to cancel several domestic and international flights Saturday morning because they had no pilots.
The resignation in the past two weeks of about a dozen pilots who were pirated by higher-paying foreign carriers forced PAL to cancel several 150-seater Airbus A320 flights used in both domestic and international routes.
PAL spokesperson Jonathan Gesmundo went on TV and radio to apologize to the public for the cancellation of flights from Manila to Bacolod, Iloilo, Cagayan de Oro, Cebu and Hong Kong.
“PAL regrets the decision of some of its pilots to accept job offers abroad, causing the disruption of PAL’s flight schedules due to inadequate flight deck crew to fly the Airbus A320 airplanes,” the company said in a statement.
PAL scored the pilots for violating their contracts, which requires them to give airline management six months to train their replacements. PAL said it would be filing appropriate charges against them.
The pilots stopped reporting for work immediately after filing their resignation letters. But it did not seem to be a group action, Gesmundo said.
He said the pilots who left PAL were mostly new hires. “The A320 is the first jet a pilot flies after graduating from aviation school,” he said.
As a result, he said, most of the pilots still owed the company as much as P2 million each for the flight training tuition that PAL subsidized. Gesmundo added that all of the pilots promised to repay PAL what they owed.
The company said it had asked “management pilots,” or former pilots that had been promoted to supervisory posts, to fly the A320 aircraft while the company looked for replacements.
PAL said it would adjust its schedules by merging some flights or upgrading the aircraft to a bigger type in order to lessen the inconvenience to passengers.
No link to labor row
The Department of Labor and Employment (DOLE) sympathized with PAL management.
Labor Secretary Rosalinda Baldoz said the PAL pilots whose resignations led to the cancellation of several flights yesterday may be liable for contract violations.
She said Philippine Airline pilots are required to give management six months’ notice before resigning, a condition set by the company and the labor department a few years ago when PAL’s pilots were also poached by other airlines.
“This was for mission critical jobs … It was extended from 30 days to six months so that PAL could find replacements,” Baldoz said.
On the other hand, Baldoz said PAL management could not prevent its workers from leaving for better salaries.
She said the resignation of the pilots did not seem to be connected to two labor cases between PAL and two of its unions.
The pilots’ union, Baldoz said, had no pending case with the DOLE.
As of Friday, Baldoz said two PAL unions—one representing rank and file employees and the other standing for flight attendants and cabin crew—had agreed to meet with management for mediation hearings.
In April, then Labor Secretary Marianito Roque assumed jurisdiction over the case to prevent a strike.
Passengers stranded
The Philippine Airlines Employees Association (Palea) is urging the labor department to stop management from outsourcing jobs that would lead to the displacement of 2,600 workers.
The cancellation of flights stranded many passengers but some were sympathetic to the pilots.
Mary Ann Solano, 31, felt the pilots were only being “practical.”
“If you want to be practical and that kind of opportunity presents itself, you should grab it,” she told the Inquirer at the predeparture area of the Ninoy Aquino International Airport Terminal 2. “I understand their situation, but I cannot help but feel inconvenienced by the cancellation.”
Solano, who is pregnant, said she was going home to Silay City where she intended to give birth. Her 2 p.m. flight to Bacolod was delayed by a couple of hours.
The airline offered an option to Solano and other passengers: If they agreed to have their flights rebooked to a later date, they would get a free round-trip ticket to any local destination.
Solano said she was hassled by the incident, but took the bargain. With reports from AP, Kristine L. Alave and Miko Morelos
Paolo Montecillo
Philippine Daily Inquirer
THE WEATHER was fine but Philippine Airlines had to cancel several domestic and international flights Saturday morning because they had no pilots.
The resignation in the past two weeks of about a dozen pilots who were pirated by higher-paying foreign carriers forced PAL to cancel several 150-seater Airbus A320 flights used in both domestic and international routes.
PAL spokesperson Jonathan Gesmundo went on TV and radio to apologize to the public for the cancellation of flights from Manila to Bacolod, Iloilo, Cagayan de Oro, Cebu and Hong Kong.
“PAL regrets the decision of some of its pilots to accept job offers abroad, causing the disruption of PAL’s flight schedules due to inadequate flight deck crew to fly the Airbus A320 airplanes,” the company said in a statement.
PAL scored the pilots for violating their contracts, which requires them to give airline management six months to train their replacements. PAL said it would be filing appropriate charges against them.
The pilots stopped reporting for work immediately after filing their resignation letters. But it did not seem to be a group action, Gesmundo said.
He said the pilots who left PAL were mostly new hires. “The A320 is the first jet a pilot flies after graduating from aviation school,” he said.
As a result, he said, most of the pilots still owed the company as much as P2 million each for the flight training tuition that PAL subsidized. Gesmundo added that all of the pilots promised to repay PAL what they owed.
The company said it had asked “management pilots,” or former pilots that had been promoted to supervisory posts, to fly the A320 aircraft while the company looked for replacements.
PAL said it would adjust its schedules by merging some flights or upgrading the aircraft to a bigger type in order to lessen the inconvenience to passengers.
No link to labor row
The Department of Labor and Employment (DOLE) sympathized with PAL management.
Labor Secretary Rosalinda Baldoz said the PAL pilots whose resignations led to the cancellation of several flights yesterday may be liable for contract violations.
She said Philippine Airline pilots are required to give management six months’ notice before resigning, a condition set by the company and the labor department a few years ago when PAL’s pilots were also poached by other airlines.
“This was for mission critical jobs … It was extended from 30 days to six months so that PAL could find replacements,” Baldoz said.
On the other hand, Baldoz said PAL management could not prevent its workers from leaving for better salaries.
She said the resignation of the pilots did not seem to be connected to two labor cases between PAL and two of its unions.
The pilots’ union, Baldoz said, had no pending case with the DOLE.
As of Friday, Baldoz said two PAL unions—one representing rank and file employees and the other standing for flight attendants and cabin crew—had agreed to meet with management for mediation hearings.
In April, then Labor Secretary Marianito Roque assumed jurisdiction over the case to prevent a strike.
Passengers stranded
The Philippine Airlines Employees Association (Palea) is urging the labor department to stop management from outsourcing jobs that would lead to the displacement of 2,600 workers.
The cancellation of flights stranded many passengers but some were sympathetic to the pilots.
Mary Ann Solano, 31, felt the pilots were only being “practical.”
“If you want to be practical and that kind of opportunity presents itself, you should grab it,” she told the Inquirer at the predeparture area of the Ninoy Aquino International Airport Terminal 2. “I understand their situation, but I cannot help but feel inconvenienced by the cancellation.”
Solano, who is pregnant, said she was going home to Silay City where she intended to give birth. Her 2 p.m. flight to Bacolod was delayed by a couple of hours.
The airline offered an option to Solano and other passengers: If they agreed to have their flights rebooked to a later date, they would get a free round-trip ticket to any local destination.
Solano said she was hassled by the incident, but took the bargain. With reports from AP, Kristine L. Alave and Miko Morelos
Out of pilots, Philippine Airlines grounds flights
July 31, 2010, 1:10pm
Manila Bulletin
MANILA, Philippines (AP) – Good morning, passengers, and welcome aboard. We're expecting clear skies today, but we're out of pilots.
National air carrier Philippine Airlines had to cancel at least five flights Saturday — one to Hong Kong, the others to domestic destinations — after several Airbus A320 pilots decamped for jobs abroad.
Brain drain — the decamping of professionals, including teachers and nurses, for better jobs abroad — has long plagued the impoverished Southeast Asian nation. About 10 percent of the population of 94 million works abroad, sending home the money that provides the bloodline for the economy.
PAL spokesman Jonathan Gesmundo went on TV and radio stations to apologize to the public for the cancellations, which he said were caused by the sudden departure of nearly dozen pilots for better-paying jobs overseas.
He said the pilots did not inform the management, but that this was not a group action.
"In the past few days, pilots had not been reporting for duty. This has caused problems for us," Gesmundo said.
He said the airline was adjusting its schedule and will probably bring in bigger aircraft to accommodate the stranded passengers.
The indebted flag carrier has said it would lay off some of its 8,000-strong work force because of financial losses in the third straight year.
Manila Bulletin
MANILA, Philippines (AP) – Good morning, passengers, and welcome aboard. We're expecting clear skies today, but we're out of pilots.
National air carrier Philippine Airlines had to cancel at least five flights Saturday — one to Hong Kong, the others to domestic destinations — after several Airbus A320 pilots decamped for jobs abroad.
Brain drain — the decamping of professionals, including teachers and nurses, for better jobs abroad — has long plagued the impoverished Southeast Asian nation. About 10 percent of the population of 94 million works abroad, sending home the money that provides the bloodline for the economy.
PAL spokesman Jonathan Gesmundo went on TV and radio stations to apologize to the public for the cancellations, which he said were caused by the sudden departure of nearly dozen pilots for better-paying jobs overseas.
He said the pilots did not inform the management, but that this was not a group action.
"In the past few days, pilots had not been reporting for duty. This has caused problems for us," Gesmundo said.
He said the airline was adjusting its schedule and will probably bring in bigger aircraft to accommodate the stranded passengers.
The indebted flag carrier has said it would lay off some of its 8,000-strong work force because of financial losses in the third straight year.
PAL upgrades aircraft to service passengers hit by flight delays and cancellations
By ANJO PEREZ, JC BELLO RUIZ
July 31, 2010, 7:00pm
The management of Philippine Airlines (PAL) has assured the riding public that everything is being undertaken to address the “inconvenience” caused by what it described as “indiscriminate resignation” of its pilots, which in turn, disrupt some of its domestic and regional operations.
This as President Benigno Simeon C. Aquino III ordered Transportation and Telecommunications Secretary Jose de Jesus to meet with PAL management in order to address the situation, which could hurt trade and commerce should it becomes protracted.
"I already instructed the Secretary of Transportation and Communications (Jose De Jesus). We're now reviewing the labor (aspect of the problem). We'll have them (labor issues) reviewed. We will be sitting with them,” Aquino said.
It could be possible that the meeting would have taken place as of press time (Saturday afternoon), at the earliest or "at the latest by Monday."
"I understand PAL will be coming up with a revised schedule... and I am expecting Sec. De Jesus and other concerned agencies to start talking to PAL because PAL has obligations. They're a public conveyance so they have commitments to service the interests of the public and if these is not being met then this has to be addressed," the Chief Executive said.
Flight operations of the flag carrier were partially crippled Saturday following the mass resignation of 12 sets of flight deck crews, who are specifically rated to handle A320 aircraft. One set is composed of a captain and a first officer.
Due to the lack of qualified pilots, PAL was forced to cancel some flights where this type of plane is used. About eight domestic and three regional flights have been cancelled as of 1 p.m. It also caused the delay of some 20 flights.
Among those cancelled flights include three Manila-Hong Kong flights and domestic flights between Manila and Cebu, Cagayan de Oro, Bacolod and Iloilo. Most of the passengers of the cancelled flights had been informed by the airline company beforehand so passenger inconvenience was avoided.
PAL “apologized” to its customers for the “inconvenience.”
“We have cancelled some flights, particularly those being serviced by A320. But we are replacing these routes with bigger aircraft, the A330,” PAL President Jaime Bautista told Manila Bulletin in an interview.
An A320 jet has a seating capacity of 150 passengers, of which 12 are business class. On the other hand, an A330 aircraft has a capacity of 302 passengers, of which 42 are business class.
PAL, for now, is readjusting its flight schedules to return back to normal its operations with the next few days.
It, also, assured its affected customers that they will be rebooked on the next available flight.
Bautista confirmed that 24 flight deck crews have resigned to join other regional airlines. It was learned that some will reportedly transfer to Hong Kong Air and Qatar Airways, which offer three times their present salaries.
“With the regional economy recovering and the airline industry on the rebound, airline companies are looking for more pilots. And we’ve been affected,” explained Bautista.
This so-called brain-drain issue has apparently disturb, even the Chief Executive, saying the government may have to address this.
"Regarding the 'brain drain,' I was just talking to, briefly, with Sec. 'Ping' (De Jesus), he actually gave me a small briefer of actually what is transpiring. The issue is our pilots are being pirated," Aquino said.
Bautista, meanwhile, admitted that PAL is unable to match the higher pay offered to their flight deck crew, who left in disregard of the company’s regulation of a 30-day notice and six months notification mandated by the Philippine Overseas Employment Authority (POEA) headed then by Linda Baldoz, who now is the Labor and Employment secretary.
The haste by which the resignation was made is “in violation of their contracts with PAL as well as pertinent government regulations that require resigning pilots to give the company ample time to train their replacements.”
“It is unfair for PAL to just leave without complying with the 30-day notice. It takes time to train a pilot,” Bautista lamented.
As such PAL, in a statement, said it will soon file appropriate charges against pilots who chose not to report for work immediately after submitting resignation letters.
Most of the pilots still owe PAL the cost of their aviation school training, which run into millions of pesos per pilot.
“We have not accepted their resignation because they still have accountability with us,” Bautista said.
PAL first Asian airline to cross Pacific Ocean
MANILA (PNA) – On July 31, 1946, the Philippine Airlines (PAL) claimed the official title of being the first Asian airline to cross the Pacific Ocean, departing from the then Nielson Airport in Makati to the United States mainland with a DC-4 aircraft.
After that, PAL started its official service between Manila and San Francisco in December 1946.
Other international flights to Hong Kong, Bangkok and Taipei followed in April 1953.
Earlier, deeply involved in shaping the course of the country's historic events, PAL began its flight on March 15, 1941, using a Beech Model 18 aircraft, making one flight daily between Manila and Baguio, amid the specter of a global war.
It became Asia's first airline.
Now, PAL has become one of the most respected airlines around the world with a young and modern fleet of aircraft and a route network that spans 31 foreign cities and 30 domestic points.
July 31, 2010, 7:00pm
The management of Philippine Airlines (PAL) has assured the riding public that everything is being undertaken to address the “inconvenience” caused by what it described as “indiscriminate resignation” of its pilots, which in turn, disrupt some of its domestic and regional operations.
This as President Benigno Simeon C. Aquino III ordered Transportation and Telecommunications Secretary Jose de Jesus to meet with PAL management in order to address the situation, which could hurt trade and commerce should it becomes protracted.
"I already instructed the Secretary of Transportation and Communications (Jose De Jesus). We're now reviewing the labor (aspect of the problem). We'll have them (labor issues) reviewed. We will be sitting with them,” Aquino said.
It could be possible that the meeting would have taken place as of press time (Saturday afternoon), at the earliest or "at the latest by Monday."
"I understand PAL will be coming up with a revised schedule... and I am expecting Sec. De Jesus and other concerned agencies to start talking to PAL because PAL has obligations. They're a public conveyance so they have commitments to service the interests of the public and if these is not being met then this has to be addressed," the Chief Executive said.
Flight operations of the flag carrier were partially crippled Saturday following the mass resignation of 12 sets of flight deck crews, who are specifically rated to handle A320 aircraft. One set is composed of a captain and a first officer.
Due to the lack of qualified pilots, PAL was forced to cancel some flights where this type of plane is used. About eight domestic and three regional flights have been cancelled as of 1 p.m. It also caused the delay of some 20 flights.
Among those cancelled flights include three Manila-Hong Kong flights and domestic flights between Manila and Cebu, Cagayan de Oro, Bacolod and Iloilo. Most of the passengers of the cancelled flights had been informed by the airline company beforehand so passenger inconvenience was avoided.
PAL “apologized” to its customers for the “inconvenience.”
“We have cancelled some flights, particularly those being serviced by A320. But we are replacing these routes with bigger aircraft, the A330,” PAL President Jaime Bautista told Manila Bulletin in an interview.
An A320 jet has a seating capacity of 150 passengers, of which 12 are business class. On the other hand, an A330 aircraft has a capacity of 302 passengers, of which 42 are business class.
PAL, for now, is readjusting its flight schedules to return back to normal its operations with the next few days.
It, also, assured its affected customers that they will be rebooked on the next available flight.
Bautista confirmed that 24 flight deck crews have resigned to join other regional airlines. It was learned that some will reportedly transfer to Hong Kong Air and Qatar Airways, which offer three times their present salaries.
“With the regional economy recovering and the airline industry on the rebound, airline companies are looking for more pilots. And we’ve been affected,” explained Bautista.
This so-called brain-drain issue has apparently disturb, even the Chief Executive, saying the government may have to address this.
"Regarding the 'brain drain,' I was just talking to, briefly, with Sec. 'Ping' (De Jesus), he actually gave me a small briefer of actually what is transpiring. The issue is our pilots are being pirated," Aquino said.
Bautista, meanwhile, admitted that PAL is unable to match the higher pay offered to their flight deck crew, who left in disregard of the company’s regulation of a 30-day notice and six months notification mandated by the Philippine Overseas Employment Authority (POEA) headed then by Linda Baldoz, who now is the Labor and Employment secretary.
The haste by which the resignation was made is “in violation of their contracts with PAL as well as pertinent government regulations that require resigning pilots to give the company ample time to train their replacements.”
“It is unfair for PAL to just leave without complying with the 30-day notice. It takes time to train a pilot,” Bautista lamented.
As such PAL, in a statement, said it will soon file appropriate charges against pilots who chose not to report for work immediately after submitting resignation letters.
Most of the pilots still owe PAL the cost of their aviation school training, which run into millions of pesos per pilot.
“We have not accepted their resignation because they still have accountability with us,” Bautista said.
PAL first Asian airline to cross Pacific Ocean
MANILA (PNA) – On July 31, 1946, the Philippine Airlines (PAL) claimed the official title of being the first Asian airline to cross the Pacific Ocean, departing from the then Nielson Airport in Makati to the United States mainland with a DC-4 aircraft.
After that, PAL started its official service between Manila and San Francisco in December 1946.
Other international flights to Hong Kong, Bangkok and Taipei followed in April 1953.
Earlier, deeply involved in shaping the course of the country's historic events, PAL began its flight on March 15, 1941, using a Beech Model 18 aircraft, making one flight daily between Manila and Baguio, amid the specter of a global war.
It became Asia's first airline.
Now, PAL has become one of the most respected airlines around the world with a young and modern fleet of aircraft and a route network that spans 31 foreign cities and 30 domestic points.
Friday, July 30, 2010
PAL faces strike, complaints
Thursday, 29 July 2010 00:00
By DARWIN G. AMOJELAR SENIOR REPORTER AND Ben Arnold O. de Vera REPORTER
THE MANILA TIMES
THE Philippines’ flag carrier is besieged by a looming labor strike and complaints by travel agencies of unfair business practices.
Flight attendants of Philippine Airlines (PAL) on Wednesday announced a plan to hold a strike after management’s failure to raise their salary for more than three years and its new policy lowering the compulsory retirement age. “For three years now, FASAP [Flight Attendants’ and Stewards’ Association of the Philippines] has been bending over-backwards and has given PAL more than enough time. The CBA [collective bargaining agreement] expired July 2007 and for the past years only FASAP members have not been granted any pay increase,” Roberto Anduiza, president of PAL-FASAP said in a statement.
For the years 2007 and 2008, PAL gave pay increases to members of management, the pilots and other ground personnel, except the flight attendants, he said.
“PAL management has not submitted its complete CBA counter proposals as mandated by law and despite numerous promises to do so during the Preventive Mediation proceedings before the National Conciliation and Mediation Board at the Department of Labor and Employment,” Anduiza said.
The group also scored PAL’s policy on lowering the compulsory retirement age.
“PAL cannot continue to turn a blind eye to inequality. PAL should correct this discriminatory policy instead of using it as bargaining chip against the flight attendants,” Anduiza said.
He said the other employees are allowed to work until 65 years old, whereas pilots should retire by 60.
But for flight attendants, the compulsory retirement age is as early as 40 years old.
“FASAP has more than enough legal basis and documentation to file a Notice of Strike,” Anduiza said.
Representatives of PAL were unavailable for comment as of press time.
In April, PAL decided to let go of at least 3,000 employees with the spin-off of its three core businesses.
PAL said it was forced to implement the restructuring plan because of the global recession, high fuel prices, the unabated liberalization of the commercial aviation industry, and the recent blacklisting of Philippine carriers by the European Union.
Travel agencies hit online promos
Separately, travel agencies scored PAL’s online promos, calling these unfair.
In a letter dated July 26 to PAL chief commercial group adviser Richard Miller, Ma. Paz Alberto, Philippine Travel Agencies Association (PTAA) president, said the airline’s “incessant” offerings of travel and tour promos and packages “is in direct contravention with the well-established and long-existing business practice/principle that has always been observed by and between the country’s travel agencies and the nation’s leading airline companies such as PAL.”
“The association’s membership . . . opines that [such] practice . . . by PAL is not entirely in consonance with the concepts of fair play, fair competition and equity,” Alberto said.
“[These] promos/packages are not in conformity with the long-established understanding between the travel and tours industry vis-à-vis the airline companies such as PAL . . . that there shall be no unfair competition between the said entities and that each and every business practice must carefully take into consideration not just the economic and beneficial welfare of the airlines concerned but also as the inherent rights and existing business interests of the country’s travel agents and agencies,” she said.
Alberto said PTAA is requesting PAL to modify or discontinue its online promo packages to “preserve the untarnished and harmonious business relationship” between the airline and the industry association.
She said PTAA would seek talks with PAL on this matter.
By DARWIN G. AMOJELAR SENIOR REPORTER AND Ben Arnold O. de Vera REPORTER
THE MANILA TIMES
THE Philippines’ flag carrier is besieged by a looming labor strike and complaints by travel agencies of unfair business practices.
Flight attendants of Philippine Airlines (PAL) on Wednesday announced a plan to hold a strike after management’s failure to raise their salary for more than three years and its new policy lowering the compulsory retirement age. “For three years now, FASAP [Flight Attendants’ and Stewards’ Association of the Philippines] has been bending over-backwards and has given PAL more than enough time. The CBA [collective bargaining agreement] expired July 2007 and for the past years only FASAP members have not been granted any pay increase,” Roberto Anduiza, president of PAL-FASAP said in a statement.
For the years 2007 and 2008, PAL gave pay increases to members of management, the pilots and other ground personnel, except the flight attendants, he said.
“PAL management has not submitted its complete CBA counter proposals as mandated by law and despite numerous promises to do so during the Preventive Mediation proceedings before the National Conciliation and Mediation Board at the Department of Labor and Employment,” Anduiza said.
The group also scored PAL’s policy on lowering the compulsory retirement age.
“PAL cannot continue to turn a blind eye to inequality. PAL should correct this discriminatory policy instead of using it as bargaining chip against the flight attendants,” Anduiza said.
He said the other employees are allowed to work until 65 years old, whereas pilots should retire by 60.
But for flight attendants, the compulsory retirement age is as early as 40 years old.
“FASAP has more than enough legal basis and documentation to file a Notice of Strike,” Anduiza said.
Representatives of PAL were unavailable for comment as of press time.
In April, PAL decided to let go of at least 3,000 employees with the spin-off of its three core businesses.
PAL said it was forced to implement the restructuring plan because of the global recession, high fuel prices, the unabated liberalization of the commercial aviation industry, and the recent blacklisting of Philippine carriers by the European Union.
Travel agencies hit online promos
Separately, travel agencies scored PAL’s online promos, calling these unfair.
In a letter dated July 26 to PAL chief commercial group adviser Richard Miller, Ma. Paz Alberto, Philippine Travel Agencies Association (PTAA) president, said the airline’s “incessant” offerings of travel and tour promos and packages “is in direct contravention with the well-established and long-existing business practice/principle that has always been observed by and between the country’s travel agencies and the nation’s leading airline companies such as PAL.”
“The association’s membership . . . opines that [such] practice . . . by PAL is not entirely in consonance with the concepts of fair play, fair competition and equity,” Alberto said.
“[These] promos/packages are not in conformity with the long-established understanding between the travel and tours industry vis-à-vis the airline companies such as PAL . . . that there shall be no unfair competition between the said entities and that each and every business practice must carefully take into consideration not just the economic and beneficial welfare of the airlines concerned but also as the inherent rights and existing business interests of the country’s travel agents and agencies,” she said.
Alberto said PTAA is requesting PAL to modify or discontinue its online promo packages to “preserve the untarnished and harmonious business relationship” between the airline and the industry association.
She said PTAA would seek talks with PAL on this matter.
Thursday, July 29, 2010
Travel agents decry PAL’s promo fares
By BERNIE CAHILES-MAGKILAT
July 29, 2010, 4:07pm
Manila Bulletin
The Philippine Travel Agents Association (PTAA) has demanded that Philippine Airlines, the country’s flag carrier, stop its travel promo fares for bypassing their services and depriving them of revenues.
In a letter addressed to PAL’s chief commercial group adviser Richard Miller, PTAA president Paz Alberto said that PAL’s various advertisements pertaining to the company’s purported promo package(s) involving highly discounted travel tours, airline fares, hotel accommodations as well as other accompanying perks and substantial benefits, denominated and/or entitled as “Midnight Sales” have been discriminatory against travel agents.
“The PTAA would like to request for your good office’s action for purposes of duly and promptly implementing the appropriate modification or deletion of the foregoing advertisements and/or travel and tours promos so as to effectively preserve the untarnished and harmonious business relationship that has always prevailed between PAL, as the country’s leading air carrier, and the nation’s duly accredited travel agents/travel agencies,” Alberto said.
According to Alberto, PAL’s promo is not entirely in consonance with the concepts of fair play, fair competition and equity.
PAL’s promo enables them to directly serve their clients without going through travel agents. This scheme, however, would deprive the travel agents of their commissions from booking air tickets and hotel accommodations.
The PTAA believes that it is a direct contravention with the well established and long existing business practice/principle that have always been observed by and between the country’s travel agencies and the nation’s leading airline companies such as PAL.
The PTAA said they are willing to sit down with PAL for a dialogue thresh out issues.
July 29, 2010, 4:07pm
Manila Bulletin
The Philippine Travel Agents Association (PTAA) has demanded that Philippine Airlines, the country’s flag carrier, stop its travel promo fares for bypassing their services and depriving them of revenues.
In a letter addressed to PAL’s chief commercial group adviser Richard Miller, PTAA president Paz Alberto said that PAL’s various advertisements pertaining to the company’s purported promo package(s) involving highly discounted travel tours, airline fares, hotel accommodations as well as other accompanying perks and substantial benefits, denominated and/or entitled as “Midnight Sales” have been discriminatory against travel agents.
“The PTAA would like to request for your good office’s action for purposes of duly and promptly implementing the appropriate modification or deletion of the foregoing advertisements and/or travel and tours promos so as to effectively preserve the untarnished and harmonious business relationship that has always prevailed between PAL, as the country’s leading air carrier, and the nation’s duly accredited travel agents/travel agencies,” Alberto said.
According to Alberto, PAL’s promo is not entirely in consonance with the concepts of fair play, fair competition and equity.
PAL’s promo enables them to directly serve their clients without going through travel agents. This scheme, however, would deprive the travel agents of their commissions from booking air tickets and hotel accommodations.
The PTAA believes that it is a direct contravention with the well established and long existing business practice/principle that have always been observed by and between the country’s travel agencies and the nation’s leading airline companies such as PAL.
The PTAA said they are willing to sit down with PAL for a dialogue thresh out issues.
Wednesday, July 28, 2010
Tour group slams PAL for poaching into their trade
First posted 20:22:07 (Mla time) July 28, 2010
Philippine Daily Inquirer
THE PHILIPPINE Travel Agencies Association (PTAA) has slammed Philippine Airlines (PAL) for offering discounted fares packaged with cheap hotel rooms and tours in popular domestic and international destinations—services that the group claims to be its stock in trade.
In a letter to PAL chief commercial group adviser Richard Miller, the group said the airline’s various packages, which had been widely advertised in recent weeks, would eat into travel agents’ business.
“The association’s membership most respectfully submit ... that the foregoing business practice … observed by PAL is not entirely in consonance with the concepts of fair play, fair competition and equity,” PTAA president Paz Alberto said in the letter.
PTAA said PAL’s promos have hurt the travel industry’s sales since passengers are now going straight to the airline.
PAL earlier this year announced that it would offer a series of promotional packages to encourage more people to travel amid improving economic prospects.
The promos were also offered to mark PAL’s 70th anniversary next year.
But in its letter, PTAA said the deals PAL offered to its clients did not conform to the long-standing understanding between the airline and its partner travel agents that there should be no unfair competition between them.
“Each and every business practice must carefully take into consideration ... the economic and beneficial welfare of the airlines concerned, as well as the inherent rights and existing business interests of the country’s travel agencies,” the group said.
PTAA had already asked PAL to pull out the advertised promotions. At the same time, the group said PAL should extend “appropriate measures of relief” to PTAA members, who were allegedly forced to deal with unequal business opportunities and practices.
“We are likewise more than willing to sit down with you and undergo dialogues that could definitely assist us and provide adequate solutions and remedies to each and every party’s concerns or demands,” the group said in its letter to PAL.
Last week, PAL announced that it had trimmed losses for its fiscal year 2009 to 2010 to $14.3 million from $297.8 million the year before. Paolo G. Montecillo
Philippine Daily Inquirer
THE PHILIPPINE Travel Agencies Association (PTAA) has slammed Philippine Airlines (PAL) for offering discounted fares packaged with cheap hotel rooms and tours in popular domestic and international destinations—services that the group claims to be its stock in trade.
In a letter to PAL chief commercial group adviser Richard Miller, the group said the airline’s various packages, which had been widely advertised in recent weeks, would eat into travel agents’ business.
“The association’s membership most respectfully submit ... that the foregoing business practice … observed by PAL is not entirely in consonance with the concepts of fair play, fair competition and equity,” PTAA president Paz Alberto said in the letter.
PTAA said PAL’s promos have hurt the travel industry’s sales since passengers are now going straight to the airline.
PAL earlier this year announced that it would offer a series of promotional packages to encourage more people to travel amid improving economic prospects.
The promos were also offered to mark PAL’s 70th anniversary next year.
But in its letter, PTAA said the deals PAL offered to its clients did not conform to the long-standing understanding between the airline and its partner travel agents that there should be no unfair competition between them.
“Each and every business practice must carefully take into consideration ... the economic and beneficial welfare of the airlines concerned, as well as the inherent rights and existing business interests of the country’s travel agencies,” the group said.
PTAA had already asked PAL to pull out the advertised promotions. At the same time, the group said PAL should extend “appropriate measures of relief” to PTAA members, who were allegedly forced to deal with unequal business opportunities and practices.
“We are likewise more than willing to sit down with you and undergo dialogues that could definitely assist us and provide adequate solutions and remedies to each and every party’s concerns or demands,” the group said in its letter to PAL.
Last week, PAL announced that it had trimmed losses for its fiscal year 2009 to 2010 to $14.3 million from $297.8 million the year before. Paolo G. Montecillo
DOLE meets PAL union leaders over layoffs
July 28, 2010
Businessworld
By Aura Marie P. Dagcutan
THE PHILIPPINE Airlines Employees’ Association (PALEA) meet with officials of the Department of Labor and Employment (DoLE) yesterday to discuss the latter’s June 15 decision allowing the Lucio C. Tan-led airline to proceed with an outsourcing scheme that will lay off ground staff.
“We will offer them options to settle the issue. They can choose whether to have an out-of-court settlement or proceed with the case.
But we assure them that whatever the decision is, both parties will benefit from it,” Rosalinda D. Baldoz, DoLE secretary, said in a telephone interview yesterday. The meeting was scheduled at 4 p.m.
DoLE’s June 15 decision, penned by then acting Labor Secretary Romeo Lagman, favored the airline management’s plan to outsource three non-core operations. Outsourcing call center, catering, and ground services will displace more than 2,600 workers and is estimated to yield savings of P1 billion to P1.5 billion for the distressed flag carrier.
The airline plans to pay around P2 billion in benefits to retrenched employees, who will get separation pay equivalent to one month’s salary for every year of service.
But Ms. Baldoz reiterated that the June 15 decision is not yet final.
“There are still other legal options because the decision is not yet executory. The meeting with PALEA will help us to understand the story,” she said.
Ms. Baldoz’s predecessor, Marianito D. Roque, assumed jurisdiction over PAL in April to prevent a strike following the airline’s announcement of the outsourcing plan.
PALEA President Gerardo F. Rivera said his group would not seek an out-of-court settlement.
“We are against to the outsourcing scheme. We have already filed for the reversal of the June 15 decision last June 28 and submitted a reply last July 19 after the PAL management filed an opposition to our motion,” he said.
“We want the Labor department to have a clear decision on the issue.
We want the PAL management to stop its plans of outsourcing,” he added.
PAL officials could not be reached for comment.
In a statement last Saturday, PAL said it had narrowed losses for its fiscal year that ended March, but said there was still weak demand for international flights.
The flag carrier reported $14.3 million in total comprehensive losses, narrower than the $297.8 million in losses recorded in the previous fiscal year.
PAL said capacity cuts by global airlines did not match the decline in passenger traffic, exerting pressure on yields. Because PAL lowered fares, revenues went down to $1.36 billion from $1.6 billion the previous year.
“Through prudent handling of resources, PAL’s total expenses dropped to $511.4 million, less than the previous year’s $1.86 billion,” it said.
The major factor for reduced expenses was the huge drop in fuel prices to an average of $86.94 per barrel from $123.80 the year before. –
Businessworld
By Aura Marie P. Dagcutan
THE PHILIPPINE Airlines Employees’ Association (PALEA) meet with officials of the Department of Labor and Employment (DoLE) yesterday to discuss the latter’s June 15 decision allowing the Lucio C. Tan-led airline to proceed with an outsourcing scheme that will lay off ground staff.
“We will offer them options to settle the issue. They can choose whether to have an out-of-court settlement or proceed with the case.
But we assure them that whatever the decision is, both parties will benefit from it,” Rosalinda D. Baldoz, DoLE secretary, said in a telephone interview yesterday. The meeting was scheduled at 4 p.m.
DoLE’s June 15 decision, penned by then acting Labor Secretary Romeo Lagman, favored the airline management’s plan to outsource three non-core operations. Outsourcing call center, catering, and ground services will displace more than 2,600 workers and is estimated to yield savings of P1 billion to P1.5 billion for the distressed flag carrier.
The airline plans to pay around P2 billion in benefits to retrenched employees, who will get separation pay equivalent to one month’s salary for every year of service.
But Ms. Baldoz reiterated that the June 15 decision is not yet final.
“There are still other legal options because the decision is not yet executory. The meeting with PALEA will help us to understand the story,” she said.
Ms. Baldoz’s predecessor, Marianito D. Roque, assumed jurisdiction over PAL in April to prevent a strike following the airline’s announcement of the outsourcing plan.
PALEA President Gerardo F. Rivera said his group would not seek an out-of-court settlement.
“We are against to the outsourcing scheme. We have already filed for the reversal of the June 15 decision last June 28 and submitted a reply last July 19 after the PAL management filed an opposition to our motion,” he said.
“We want the Labor department to have a clear decision on the issue.
We want the PAL management to stop its plans of outsourcing,” he added.
PAL officials could not be reached for comment.
In a statement last Saturday, PAL said it had narrowed losses for its fiscal year that ended March, but said there was still weak demand for international flights.
The flag carrier reported $14.3 million in total comprehensive losses, narrower than the $297.8 million in losses recorded in the previous fiscal year.
PAL said capacity cuts by global airlines did not match the decline in passenger traffic, exerting pressure on yields. Because PAL lowered fares, revenues went down to $1.36 billion from $1.6 billion the previous year.
“Through prudent handling of resources, PAL’s total expenses dropped to $511.4 million, less than the previous year’s $1.86 billion,” it said.
The major factor for reduced expenses was the huge drop in fuel prices to an average of $86.94 per barrel from $123.80 the year before. –
Tuesday, July 27, 2010
PAL trims losses to $14.3 million in 2009
By EMMIE V. ABADILLA
July 27, 2010, 3:50pm
Manila Bulletin
Citing lingering weak demand especially in the international sector, Philippine Airlines (PAL) reported US$14.3 million in total comprehensive losses for its fiscal year ending March 2010. Though still substantial, PAL said its current losses is significantly lower than the US$297.8-million losses it incurred during the previous fiscal year.
PAL said capacity cuts by global airlines did not match the decline in passenger traffic, thus exerting pressure on yields. Lower fares also contributed to the reduction of PAL's revenues to US$1.36-billion compared to the US$1.6-billion the year before, as indicated in its latest financial statement submitted before the Securities and Exchange Commission.
Through prudent handling of resources, PAL said total expenses dropped to US$1.35-billion, or US$ 511.4-million less than the previous year's figure of US$1.86-billion. Also a major contributing factor in the airline's reduced expenses is the huge drop in fuel prices to an average of US$ 86.94 per barrel, compared to the average of US$123.80 per barrel the year before.
Apart from lower expenses, PAL also recognized "Other Income" of US$ 102.5 million as a result of fair valuation changes on outstanding fuel deals and a 'one time gain' from a debt buyback of certain unsecured claims.
Moving forward, PAL said it will strive to improve its financial condition and results of operations. It has lined up and implemented various revenue enhancement programs, cash generation strategies and cost control initiatives, which includes the planned spin-off of three non-core units, the airline stressed.
While the International Air Transport Association (IATA) noted strengthening traffic demand and expects airlines to post profits in 2010, it says that the industry is still a long way from sustainable profitability.
July 27, 2010, 3:50pm
Manila Bulletin
Citing lingering weak demand especially in the international sector, Philippine Airlines (PAL) reported US$14.3 million in total comprehensive losses for its fiscal year ending March 2010. Though still substantial, PAL said its current losses is significantly lower than the US$297.8-million losses it incurred during the previous fiscal year.
PAL said capacity cuts by global airlines did not match the decline in passenger traffic, thus exerting pressure on yields. Lower fares also contributed to the reduction of PAL's revenues to US$1.36-billion compared to the US$1.6-billion the year before, as indicated in its latest financial statement submitted before the Securities and Exchange Commission.
Through prudent handling of resources, PAL said total expenses dropped to US$1.35-billion, or US$ 511.4-million less than the previous year's figure of US$1.86-billion. Also a major contributing factor in the airline's reduced expenses is the huge drop in fuel prices to an average of US$ 86.94 per barrel, compared to the average of US$123.80 per barrel the year before.
Apart from lower expenses, PAL also recognized "Other Income" of US$ 102.5 million as a result of fair valuation changes on outstanding fuel deals and a 'one time gain' from a debt buyback of certain unsecured claims.
Moving forward, PAL said it will strive to improve its financial condition and results of operations. It has lined up and implemented various revenue enhancement programs, cash generation strategies and cost control initiatives, which includes the planned spin-off of three non-core units, the airline stressed.
While the International Air Transport Association (IATA) noted strengthening traffic demand and expects airlines to post profits in 2010, it says that the industry is still a long way from sustainable profitability.
PAL sees growth in Aussie routes
Top News
Written by Lenie lectura / Reporter
Sunday, 27 June 2010 21:42
BRISBANE, Australia—Philippine Airlines (PAL) expects traffic in its Australian destinations to grow by 10 percent and post as much as $60 million in revenues during its fiscal year that starts in March.
PAL flies five times weekly to Sydney and Melbourne and twice a week to Brisbane. It utilizes the Boeing 777 and Airbus A-330 aircraft.
“Our destinations to Australia are making money. We should be able to make more money,” said PAL country manager Arnul Pan.
PAL’s Australia service represents 4 percent of the airline’s total revenue target, added Pan. “We are looking at increasing our traffic here by 10 percent because of our comeback in Brisbane, our new plane the Boeing 777, and the partnerships we have forged with travel agencies.”
The load factor or the number of seats occupied during a flight for Sydney and Melbourne currently stands at about 80 percent to 85 percent and about 70 percent for its Brisbane route, that reopened in March.
“It depends on the aircraft that we are using. If we deploy Airbus A-330 then our load factor is at 85 percent but for our Boeing 777 the load factor is 65 percent to 70 percent,” added Pan.
The Airbus A-330 can accommodate 300 passengers while the B-777 can seat 376 passengers.
“Of the total passengers, 70 percent are Filipinos,” added Pan.
The PAL official said that for now there are enough frequencies to service Australia. “Our flights are enough. We won’t ask yet for additional flights. We are now observing how the market is starting to build up as airlines have just recovered from the global recession,” said Pan.
The restoration of Brisbane to PAL’s network completes the airline’s comeback in Australia, following the return of Sydney and Melbourne in recent years.
The new Brisbane service marks PAL’s return to the Queensland capital after a 12-year absence and underscores the airline’s commitment to its customers in Australia despite the global economic downturn.
With the addition of Brisbane, PAL will restructure its Australian operations. The current daily, same-plane operation to Sydney and Melbourne, which now share a triangulated routing to and from Manila, will be modified.
PAL first flew to Brisbane on June 5, 1985. In succeeding years, the city formed a key part, along with Sydney and Melbourne, of the airline’s multilegged operation to Australia.
But commercial and operational difficulties spawned by the Asian financial crisis of 1997 forced the flag carrier to shut down its Australian services on June 5, 1998.
PAL will also be looking to tap the huge Filipino migrant community in Queensland, as well as the leisure, business and cargo traffic out of the state. The airline sees an opportunity to provide Australian travelers, via PAL’s convenient connections in Manila, services between Brisbane and destinations in North Asia like Japan, China and Korea. Travelers, said the airline, can also expect to shave hours off current travel time to these points.
Written by Lenie lectura / Reporter
Sunday, 27 June 2010 21:42
BRISBANE, Australia—Philippine Airlines (PAL) expects traffic in its Australian destinations to grow by 10 percent and post as much as $60 million in revenues during its fiscal year that starts in March.
PAL flies five times weekly to Sydney and Melbourne and twice a week to Brisbane. It utilizes the Boeing 777 and Airbus A-330 aircraft.
“Our destinations to Australia are making money. We should be able to make more money,” said PAL country manager Arnul Pan.
PAL’s Australia service represents 4 percent of the airline’s total revenue target, added Pan. “We are looking at increasing our traffic here by 10 percent because of our comeback in Brisbane, our new plane the Boeing 777, and the partnerships we have forged with travel agencies.”
The load factor or the number of seats occupied during a flight for Sydney and Melbourne currently stands at about 80 percent to 85 percent and about 70 percent for its Brisbane route, that reopened in March.
“It depends on the aircraft that we are using. If we deploy Airbus A-330 then our load factor is at 85 percent but for our Boeing 777 the load factor is 65 percent to 70 percent,” added Pan.
The Airbus A-330 can accommodate 300 passengers while the B-777 can seat 376 passengers.
“Of the total passengers, 70 percent are Filipinos,” added Pan.
The PAL official said that for now there are enough frequencies to service Australia. “Our flights are enough. We won’t ask yet for additional flights. We are now observing how the market is starting to build up as airlines have just recovered from the global recession,” said Pan.
The restoration of Brisbane to PAL’s network completes the airline’s comeback in Australia, following the return of Sydney and Melbourne in recent years.
The new Brisbane service marks PAL’s return to the Queensland capital after a 12-year absence and underscores the airline’s commitment to its customers in Australia despite the global economic downturn.
With the addition of Brisbane, PAL will restructure its Australian operations. The current daily, same-plane operation to Sydney and Melbourne, which now share a triangulated routing to and from Manila, will be modified.
PAL first flew to Brisbane on June 5, 1985. In succeeding years, the city formed a key part, along with Sydney and Melbourne, of the airline’s multilegged operation to Australia.
But commercial and operational difficulties spawned by the Asian financial crisis of 1997 forced the flag carrier to shut down its Australian services on June 5, 1998.
PAL will also be looking to tap the huge Filipino migrant community in Queensland, as well as the leisure, business and cargo traffic out of the state. The airline sees an opportunity to provide Australian travelers, via PAL’s convenient connections in Manila, services between Brisbane and destinations in North Asia like Japan, China and Korea. Travelers, said the airline, can also expect to shave hours off current travel time to these points.
Sunday, July 25, 2010
PAL losses in 2009 down to $14.3-M
First posted 08:12:23 (Mla time) July 25, 2010
INQUIRER.net
MANILA, Philippines—Citing lingering weak demand especially in international flights, Philippine Airlines (PAL) reported $14.3 million in total comprehensive losses for its fiscal year ending March 2010.
Though still substantial, PAL said its current losses are significantly lower than the $297.8-million losses it incurred during the previous fiscal year.
In a news release over the weekend, PAL said capacity cuts by global airlines did not match the decline in passenger traffic, thus exerting pressure on yields. Lower fares also contributed to the reduction of PAL's revenues to $1.36 billion compared to the $1.6 billion the year before, as indicated in its latest financial statement submitted before the Securities and Exchange Commission.
The flag carrier said that through prudent handling of resources, its total expenses dropped to $1.35 billion, or $511.4 million less than the previous year's figure of $1.86 billion. Also a major contributing factor in the airline's reduced expenses is the huge drop in fuel prices to an average of $ 86.94 per barrel, compared to the average of $123.80 per barrel the year before.
Apart from lower expenses, PAL also recognized "Other Income" of $102.5 million as a result of fair valuation changes on outstanding fuel deals and a “one-time gain” from a debt buyback of certain unsecured claims.
Moving forward, PAL said it will strive to improve its financial condition and results of operations. It has lined up and implemented various revenue enhancement programs, cash generation strategies and cost control initiatives, which includes the planned spin-off of three non-core units, the airline stressed.
While the International Air Transport Association (IATA) noted strengthening traffic demand and expects airlines to post profits in 2010, it says that the industry is still a long way from sustainable profitability.
INQUIRER.net
MANILA, Philippines—Citing lingering weak demand especially in international flights, Philippine Airlines (PAL) reported $14.3 million in total comprehensive losses for its fiscal year ending March 2010.
Though still substantial, PAL said its current losses are significantly lower than the $297.8-million losses it incurred during the previous fiscal year.
In a news release over the weekend, PAL said capacity cuts by global airlines did not match the decline in passenger traffic, thus exerting pressure on yields. Lower fares also contributed to the reduction of PAL's revenues to $1.36 billion compared to the $1.6 billion the year before, as indicated in its latest financial statement submitted before the Securities and Exchange Commission.
The flag carrier said that through prudent handling of resources, its total expenses dropped to $1.35 billion, or $511.4 million less than the previous year's figure of $1.86 billion. Also a major contributing factor in the airline's reduced expenses is the huge drop in fuel prices to an average of $ 86.94 per barrel, compared to the average of $123.80 per barrel the year before.
Apart from lower expenses, PAL also recognized "Other Income" of $102.5 million as a result of fair valuation changes on outstanding fuel deals and a “one-time gain” from a debt buyback of certain unsecured claims.
Moving forward, PAL said it will strive to improve its financial condition and results of operations. It has lined up and implemented various revenue enhancement programs, cash generation strategies and cost control initiatives, which includes the planned spin-off of three non-core units, the airline stressed.
While the International Air Transport Association (IATA) noted strengthening traffic demand and expects airlines to post profits in 2010, it says that the industry is still a long way from sustainable profitability.
Saturday, July 24, 2010
Labor clouds PAL future
By AMADO P. MACASAET
Malaya
July 24, 2010
Philippine Airlines, the national flag carrier, is undoubtedly the most overstaffed airline in the world.
With only 39 aircraft for domestic and international operations, it has 7,500 people in its payroll. That averages 192 employees per airplane. Worldwide, the average is 100 to 120.
As if the large number were not bad enough, PAL’s labor force is probably the most strident in the airline industry all over the world.
In 1998, PAL retrenched thousands of employees including 1,400 cabin crew personnel. They accepted the retirement pay in amounts somewhat more than what the law requires.
They signed quit claims which by any stretch of the imagination leaves PAL in peace.
The quit claim provides in very clear terms that the furloughed employee "hereby voluntarily, irrevocably, and unconditionally release and forever discharge PAL and PAL owners, partners, stockholders, predecessors, successors, assigns, agents, insurers, directors, officers, employees, representatives, subsidiaries affiliates and all persons … from any and all complaints, claims, demands, liabilities or rights…"
Unmindful of their commitments, the members of the Flight Attendants and Stewards Association of the Philippines (FASAP) went to court asking for reinstatement.
The National Labor Relations Council ruled in favor of PAL. FASAP appealed to the Court of Appeals. The CA affirmed the ruling of the NLRC.
The case went up to the Supreme Court on appeal.
On July 22, 2008, the Supreme Court reversed the decisions of the NLRC and the CA. It found PAL guilty of illegal dismissal. PAL filed a motion for reconsideration. The motion was denied.
A second motion for reconsideration is now pending resolution in the Supreme Court.
While the case is pending resolution, a labor arbiter made the illegal conclusion that the ruling of the SC has become final. Forthwith, he issued a writ of execution ordering the NLRC sheriffs to reinstate 582 cabin crew personnel to their former positions.
The arbiter took the move in spite of the objection of PAL for NLRC to issue a writ of execution.
On July 5, 2010, the NLRC sheriffs, complying with the writ of execution, went to PAL’s ticket office in Cubao and other ticket offices, posted a sheriff’s notice of levy/sale on execution of personal property.
The sheriff also served notices of garnishment on the depositary banks of the airline.
PAL filed a motion for a restraining order with the NLRC which was granted on July 12, 2010. The TRO is valid for 20 days from date of issue or receipt by the parties.
While all these were happening PAL president Jaime Bautista announced to media that the airline was seeking foreign partners to bolster its capital stock. The plan is to increase paid capital expected to be subscribed and paid by foreign partners, with Lucio Tan who now owns about 90 per cent of the airline retaining majority of the shares.
Some leaders of the business community who requested not to be named saying they have nothing to do with the problems of PAL, nevertheless expressed alarm over what they thought is the denial by the courts of the rights of owners of enterprise to plot the future of their companies toward the path of growth.
They also said that the decision of the Supreme Court declaring PAL guilty of illegal dismissal will definitely discourage local or foreign investors from putting in money in the national flag carrier.
The employees signed a quit claim. They abandoned their right to strike, the business leaders said.
They explained that large companies such as Standard Electric and Novelty Philippines closed shop and went to China after their operations were paralyzed by a strike.
More than 3,000 jobs were lost in the two companies. They also pointed out that strident labor is one of the major reasons the country has not attracted enough local and foreign investments.
The owners of large manufacturing companies have decided to go into trading precisely to avoid labor troubles. The result, the business leaders claimed, is a slowdown in the creation of jobs.
The Supreme Court ruling states that PAL failed to substantiate its claim of actual and imminent substantial losses. The decision also states that the quit claims was clouded by fraud or mistake.
Strangely, FASAP itself is known to have admitted that the airline incurred financial losses. These losses were confirmed by the Securities and Exchange Commission, the labor arbiter, the NLRC and the Court of Appeals.
Malaya
July 24, 2010
Philippine Airlines, the national flag carrier, is undoubtedly the most overstaffed airline in the world.
With only 39 aircraft for domestic and international operations, it has 7,500 people in its payroll. That averages 192 employees per airplane. Worldwide, the average is 100 to 120.
As if the large number were not bad enough, PAL’s labor force is probably the most strident in the airline industry all over the world.
In 1998, PAL retrenched thousands of employees including 1,400 cabin crew personnel. They accepted the retirement pay in amounts somewhat more than what the law requires.
They signed quit claims which by any stretch of the imagination leaves PAL in peace.
The quit claim provides in very clear terms that the furloughed employee "hereby voluntarily, irrevocably, and unconditionally release and forever discharge PAL and PAL owners, partners, stockholders, predecessors, successors, assigns, agents, insurers, directors, officers, employees, representatives, subsidiaries affiliates and all persons … from any and all complaints, claims, demands, liabilities or rights…"
Unmindful of their commitments, the members of the Flight Attendants and Stewards Association of the Philippines (FASAP) went to court asking for reinstatement.
The National Labor Relations Council ruled in favor of PAL. FASAP appealed to the Court of Appeals. The CA affirmed the ruling of the NLRC.
The case went up to the Supreme Court on appeal.
On July 22, 2008, the Supreme Court reversed the decisions of the NLRC and the CA. It found PAL guilty of illegal dismissal. PAL filed a motion for reconsideration. The motion was denied.
A second motion for reconsideration is now pending resolution in the Supreme Court.
While the case is pending resolution, a labor arbiter made the illegal conclusion that the ruling of the SC has become final. Forthwith, he issued a writ of execution ordering the NLRC sheriffs to reinstate 582 cabin crew personnel to their former positions.
The arbiter took the move in spite of the objection of PAL for NLRC to issue a writ of execution.
On July 5, 2010, the NLRC sheriffs, complying with the writ of execution, went to PAL’s ticket office in Cubao and other ticket offices, posted a sheriff’s notice of levy/sale on execution of personal property.
The sheriff also served notices of garnishment on the depositary banks of the airline.
PAL filed a motion for a restraining order with the NLRC which was granted on July 12, 2010. The TRO is valid for 20 days from date of issue or receipt by the parties.
While all these were happening PAL president Jaime Bautista announced to media that the airline was seeking foreign partners to bolster its capital stock. The plan is to increase paid capital expected to be subscribed and paid by foreign partners, with Lucio Tan who now owns about 90 per cent of the airline retaining majority of the shares.
Some leaders of the business community who requested not to be named saying they have nothing to do with the problems of PAL, nevertheless expressed alarm over what they thought is the denial by the courts of the rights of owners of enterprise to plot the future of their companies toward the path of growth.
They also said that the decision of the Supreme Court declaring PAL guilty of illegal dismissal will definitely discourage local or foreign investors from putting in money in the national flag carrier.
The employees signed a quit claim. They abandoned their right to strike, the business leaders said.
They explained that large companies such as Standard Electric and Novelty Philippines closed shop and went to China after their operations were paralyzed by a strike.
More than 3,000 jobs were lost in the two companies. They also pointed out that strident labor is one of the major reasons the country has not attracted enough local and foreign investments.
The owners of large manufacturing companies have decided to go into trading precisely to avoid labor troubles. The result, the business leaders claimed, is a slowdown in the creation of jobs.
The Supreme Court ruling states that PAL failed to substantiate its claim of actual and imminent substantial losses. The decision also states that the quit claims was clouded by fraud or mistake.
Strangely, FASAP itself is known to have admitted that the airline incurred financial losses. These losses were confirmed by the Securities and Exchange Commission, the labor arbiter, the NLRC and the Court of Appeals.
Friday, July 23, 2010
PAL narrows losses by 95% due to cost-cutting measures
First posted 19:36:22 (Mla time) July 23, 2010
Daxim Lucas
Philippine Daily Inquirer
FLAG CARRIER Philippine Airlines Friday reported a significantly improved financial standing at the end of its recently concluded fiscal year, where drastic cost-cutting measures reduced its losses by more than 95 percent.
In its filing with the Securities and Exchange Commission (SEC), PAL said its total comprehensive losses for the fiscal year that ended in March 2010 fell to only $14.3 million.
This marks a sharp decline from the comprehensive net loss of $297.8 million in the previous year, after the airline implemented cost reduction measures.
According to its SEC filing, PAL experienced weak passenger demand mainly in its international operations, as well as lower fares, which drove revenue down to $1.36 billion this year from $1.60 billion the year before.
“Worldwide capacity cuts during the year did not keep pace with declining traffic demand thus exerting significant pressure in pushing down fares and yields,” PAL said.
Due mainly to lower fuel prices, cost cutting and one-time gains recognized during the current period, PAL’s total expenses by the end of March 2010 dropped by 28 percent to $1. 35 billion.
The airline also recognized provisions for income taxes and fair valuation losses on outstanding fuel deals.
PAL said it was continuing to look for ways to improve its financial condition and the results of its operations. It has lined up and implemented various revenue enhancement programs, cash generation strategies and cost control initiatives, the airline stressed.
The International Air Transport Association (IATA) recently reported strengthening traffic demand. It expects airlines to post profits in 2010. However, it says the airline industry still has a long way to go to achieve sustainable profitability.
Daxim Lucas
Philippine Daily Inquirer
FLAG CARRIER Philippine Airlines Friday reported a significantly improved financial standing at the end of its recently concluded fiscal year, where drastic cost-cutting measures reduced its losses by more than 95 percent.
In its filing with the Securities and Exchange Commission (SEC), PAL said its total comprehensive losses for the fiscal year that ended in March 2010 fell to only $14.3 million.
This marks a sharp decline from the comprehensive net loss of $297.8 million in the previous year, after the airline implemented cost reduction measures.
According to its SEC filing, PAL experienced weak passenger demand mainly in its international operations, as well as lower fares, which drove revenue down to $1.36 billion this year from $1.60 billion the year before.
“Worldwide capacity cuts during the year did not keep pace with declining traffic demand thus exerting significant pressure in pushing down fares and yields,” PAL said.
Due mainly to lower fuel prices, cost cutting and one-time gains recognized during the current period, PAL’s total expenses by the end of March 2010 dropped by 28 percent to $1. 35 billion.
The airline also recognized provisions for income taxes and fair valuation losses on outstanding fuel deals.
PAL said it was continuing to look for ways to improve its financial condition and the results of its operations. It has lined up and implemented various revenue enhancement programs, cash generation strategies and cost control initiatives, the airline stressed.
The International Air Transport Association (IATA) recently reported strengthening traffic demand. It expects airlines to post profits in 2010. However, it says the airline industry still has a long way to go to achieve sustainable profitability.
PAL open to partnership for flag carrier
By Mary Ann LL. Reyes (The Philippine Star) Updated July 23, 2010 12:00 AM
MANILA, Philippines - Lucio Tan-led PAL Holdings is open to partnerships insofar as owning flag carrier Philippine Airlines is concerned, top company officials said yesterday.
PAL chief finance officer Susan Lee said the holding company has been entertaining inquiries, mostly from international airline companies, on the possibility of putting in fresh capital into PAL.
Earlier, PAL president Jaime Bautista revealed that some international airlines have expressed interest in partnering with PAL Holdings, which owns 83 percent of PAL, and have made inquiries regarding this matter.
Bautista said that the equity needed from a possible investor should be at least 25 percent, but should not exceed 40 percent, of PAL’s total assets which stood at $1.1 billion.
He added that if there is a good offer to buy the entire business of PAL, the company’s owners, led by Tan, are willing to give the company up. Tan is reportedly not interested in shelling out more funds for PAL considering his already substantial investment in the airline.
Bautista, however, emphasized that PAL is not a bankrupt company. “It only needs to have additional equity,” he stressed.
But Lee pointed out that nothing definite has been agreed upon and discussions are still mostly in the exploratory stages.
PAL is in talks with several fund managers and Asian carriers for possible investments but according to Bautista, instead of the shareholders selling their stocks, they will be considering issuing new shares.
Bautista, however, explained that at this point, it is not clear whether the shares will be that of PAL or of publicly-listed PAL Holdings.
Although issuing new shares could dilute the Lucio Tan group’s stake in PAL, Bautista said Tan is more concerned with the fresh funds being put into the airline than the ownership aspect.
About a decade ago, Hong Kong-based Cathay Pacific Airways Ltd. had contemplated on investing in PAL but this plan failed to materialize. Now, Bautista revealed that Cathay is now among the carriers that PAL is in discussions with.
PAL Holdings’ share prices has been climbing, from P3 per share at the start of the month to P4.60 last Friday, as rumors circulated that new investors were about to come in.
Despite its financial difficulties, Bautista said PAL settled $40 million in maturing debts last month, on top of the $10 million it has been paying monthly. PAL was able to bring down its liabilities to about $1 billion since entering corporate receivership.
The company emerged from receivership after recording a profit in 2007 but the airline’s finances spiraled in the succeeding three years as it incurred over $350 million, or at least P15 billion, in losses during its last two fiscal years. Its equity also dropped precipitously to a little over $1.1 million as of February this year.
With this, the company decided to let go of at least 3,000 employees with the spin-off of its three core businesses. The affected workers belong to the in-flight catering services, airport services (including ground handling, cargo terminal/cargo handling and ramp handling) and call center reservations.
Although the industry is improving, Bautista said PAL has to continue implementing more measures to generate more revenues and reduce costs.
Aside from its debts, the airline is also dealing with the problems brought about by the downgrading by the US Federal Aviation Authority (FAA) of the Philippines, from Category 1 to Category 2, and the consequent blacklisting by the European Union. The downgrade has prevented PAL from mounting additional flights to the US.
Earlier, PAL’s chief executive explained that the move to outsource non-core units is essential to attract investors that will put in fresh capital for the financially strapped carrier.
PAL explained that it was constrained to pursue the restructuring plan due to several factors beyond its control that include, among others the unabated liberalization of the commercial aviation industry to the detriment of local players like PAL, the worldwide economic recession that led to a crippling slowdown in passenger traffic, as well as the record-high oil prices in 2008-2009 and the continuing increase in the price of aviation fuel, which account for nearly half of PAL’s operating expenses.
In April, Bautista said that apart from a series of cost-cutting initiatives, PAL approached several investors but none were interested given the fact that in 2009 alone, more than 20 airlines went bankrupt. “We approached government for help but it, too, was in dire financial straits,” he added.
To stave off failure and protect company assets, PAL said it had to act quickly. “Given this grim scenario, PAL has no choice but to restructure. It must also sell and/or cease operations of non-core businesses since no airline in Asia, or the world for that matter, continue to operate non-core businesses. Moreover, PAL has to meet its huge outstanding obligations as they fall due to prevent creditors from taking over the business,” it stressed.
MANILA, Philippines - Lucio Tan-led PAL Holdings is open to partnerships insofar as owning flag carrier Philippine Airlines is concerned, top company officials said yesterday.
PAL chief finance officer Susan Lee said the holding company has been entertaining inquiries, mostly from international airline companies, on the possibility of putting in fresh capital into PAL.
Earlier, PAL president Jaime Bautista revealed that some international airlines have expressed interest in partnering with PAL Holdings, which owns 83 percent of PAL, and have made inquiries regarding this matter.
Bautista said that the equity needed from a possible investor should be at least 25 percent, but should not exceed 40 percent, of PAL’s total assets which stood at $1.1 billion.
He added that if there is a good offer to buy the entire business of PAL, the company’s owners, led by Tan, are willing to give the company up. Tan is reportedly not interested in shelling out more funds for PAL considering his already substantial investment in the airline.
Bautista, however, emphasized that PAL is not a bankrupt company. “It only needs to have additional equity,” he stressed.
But Lee pointed out that nothing definite has been agreed upon and discussions are still mostly in the exploratory stages.
PAL is in talks with several fund managers and Asian carriers for possible investments but according to Bautista, instead of the shareholders selling their stocks, they will be considering issuing new shares.
Bautista, however, explained that at this point, it is not clear whether the shares will be that of PAL or of publicly-listed PAL Holdings.
Although issuing new shares could dilute the Lucio Tan group’s stake in PAL, Bautista said Tan is more concerned with the fresh funds being put into the airline than the ownership aspect.
About a decade ago, Hong Kong-based Cathay Pacific Airways Ltd. had contemplated on investing in PAL but this plan failed to materialize. Now, Bautista revealed that Cathay is now among the carriers that PAL is in discussions with.
PAL Holdings’ share prices has been climbing, from P3 per share at the start of the month to P4.60 last Friday, as rumors circulated that new investors were about to come in.
Despite its financial difficulties, Bautista said PAL settled $40 million in maturing debts last month, on top of the $10 million it has been paying monthly. PAL was able to bring down its liabilities to about $1 billion since entering corporate receivership.
The company emerged from receivership after recording a profit in 2007 but the airline’s finances spiraled in the succeeding three years as it incurred over $350 million, or at least P15 billion, in losses during its last two fiscal years. Its equity also dropped precipitously to a little over $1.1 million as of February this year.
With this, the company decided to let go of at least 3,000 employees with the spin-off of its three core businesses. The affected workers belong to the in-flight catering services, airport services (including ground handling, cargo terminal/cargo handling and ramp handling) and call center reservations.
Although the industry is improving, Bautista said PAL has to continue implementing more measures to generate more revenues and reduce costs.
Aside from its debts, the airline is also dealing with the problems brought about by the downgrading by the US Federal Aviation Authority (FAA) of the Philippines, from Category 1 to Category 2, and the consequent blacklisting by the European Union. The downgrade has prevented PAL from mounting additional flights to the US.
Earlier, PAL’s chief executive explained that the move to outsource non-core units is essential to attract investors that will put in fresh capital for the financially strapped carrier.
PAL explained that it was constrained to pursue the restructuring plan due to several factors beyond its control that include, among others the unabated liberalization of the commercial aviation industry to the detriment of local players like PAL, the worldwide economic recession that led to a crippling slowdown in passenger traffic, as well as the record-high oil prices in 2008-2009 and the continuing increase in the price of aviation fuel, which account for nearly half of PAL’s operating expenses.
In April, Bautista said that apart from a series of cost-cutting initiatives, PAL approached several investors but none were interested given the fact that in 2009 alone, more than 20 airlines went bankrupt. “We approached government for help but it, too, was in dire financial straits,” he added.
To stave off failure and protect company assets, PAL said it had to act quickly. “Given this grim scenario, PAL has no choice but to restructure. It must also sell and/or cease operations of non-core businesses since no airline in Asia, or the world for that matter, continue to operate non-core businesses. Moreover, PAL has to meet its huge outstanding obligations as they fall due to prevent creditors from taking over the business,” it stressed.
PAL labor union wants Labor dept to recall order
Tuesday, 22 June 2010 00:00
THE Philippine Airlines Employees Association (PALEA) on Monday said it will ask the government to reconsider its decision allowing the country’s flag carrier to spin off its three non-core businesses. “We will file a motion for reconsideration on or before June 28. Hopefully, we’ll not be victims of midnight decisions again . . . ,” Gerardo Rivera, president of PALEA said in a text message.
He said members of PALEA will hold a protest rally in front of the Department of Labor and Employment (DOLE) on Tuesday.
PAL over the weekend said DOLE gave credence to the company’s financial troubles and its need to spin off none-core services as part of its survival strategy.
The affected units are in-flight catering services, airport services (including ground handling cargo terminal/cargo handling and ramp handling) and call center reservations.
The Lucio Tan-owned carrier had said that the spin off will entail letting go some 3,500 out of its 7,500 workforce.
The planned retrenchment was originally set on May 31, but was suspended after the DOLE assumed jurisdiction over a simmering dispute between PAL management and the airline’s labor unions.
The airline will outsource its call center reservations to ePLDT Ventus, which would handle reservations, inquiries, bookings, disruption handling, back-office services and other call center services.
PAL’s catering services will be handled by SkyKitchen Philippines, which is owned by businessman Manuel Osmeña.
The airline caterer provides in-flight meals for Cathay Pacific, Qatar and Cebu Pacific.
PAL’s cargo handling would be outsourced to Sky Logistics.
In addition, PAL will rationalize its medical, information technology and human resource units so it can let go of 500 more employees.
The cost-cutting measures would save the company about P500 million to P1 billion a year. PAL is setting aside P2 billion to P2.5 billion to compensate the displaced workers.
PAL was forced to implement the restructuring plan because of the combined effects of the global recession, high fuel prices, the unabated liberalization of the commercial aviation industry and the recent blacklisting of Philippine carriers by the European Union.
On Monday, PAL said it was the top carrier in terms of flights and seat capacity operating out of Ninoy Aquino International Airport (NAIA) for two consecutive years.
Citing the aviation industry’s main data keeper Official Airline Guide (OAG), the airline said a survey of the top airports in the Asia-Pacific region showed that NAIA’s four terminals handled 1,859 flights per week in 2009, an increase of 12 percent over the 1,654 flights per week handled in 2008.
These flights resulted in 309,616 seats per week flown by all airlines using the NAIA complex in 2009— 11 percent more than the 278,130 seats per week flown in 2008.
Of this traffic volume, PAL had a market-leading share of 35 percent of all flights per week and 38 percent of all seats flown per week at the country’s premier airport.
Both figures represented increases over the 33 percent and 37 percent shares, respectively, that PAL posted in 2008, it added.
DARWIN G. AMOJELAR
THE Philippine Airlines Employees Association (PALEA) on Monday said it will ask the government to reconsider its decision allowing the country’s flag carrier to spin off its three non-core businesses. “We will file a motion for reconsideration on or before June 28. Hopefully, we’ll not be victims of midnight decisions again . . . ,” Gerardo Rivera, president of PALEA said in a text message.
He said members of PALEA will hold a protest rally in front of the Department of Labor and Employment (DOLE) on Tuesday.
PAL over the weekend said DOLE gave credence to the company’s financial troubles and its need to spin off none-core services as part of its survival strategy.
The affected units are in-flight catering services, airport services (including ground handling cargo terminal/cargo handling and ramp handling) and call center reservations.
The Lucio Tan-owned carrier had said that the spin off will entail letting go some 3,500 out of its 7,500 workforce.
The planned retrenchment was originally set on May 31, but was suspended after the DOLE assumed jurisdiction over a simmering dispute between PAL management and the airline’s labor unions.
The airline will outsource its call center reservations to ePLDT Ventus, which would handle reservations, inquiries, bookings, disruption handling, back-office services and other call center services.
PAL’s catering services will be handled by SkyKitchen Philippines, which is owned by businessman Manuel Osmeña.
The airline caterer provides in-flight meals for Cathay Pacific, Qatar and Cebu Pacific.
PAL’s cargo handling would be outsourced to Sky Logistics.
In addition, PAL will rationalize its medical, information technology and human resource units so it can let go of 500 more employees.
The cost-cutting measures would save the company about P500 million to P1 billion a year. PAL is setting aside P2 billion to P2.5 billion to compensate the displaced workers.
PAL was forced to implement the restructuring plan because of the combined effects of the global recession, high fuel prices, the unabated liberalization of the commercial aviation industry and the recent blacklisting of Philippine carriers by the European Union.
On Monday, PAL said it was the top carrier in terms of flights and seat capacity operating out of Ninoy Aquino International Airport (NAIA) for two consecutive years.
Citing the aviation industry’s main data keeper Official Airline Guide (OAG), the airline said a survey of the top airports in the Asia-Pacific region showed that NAIA’s four terminals handled 1,859 flights per week in 2009, an increase of 12 percent over the 1,654 flights per week handled in 2008.
These flights resulted in 309,616 seats per week flown by all airlines using the NAIA complex in 2009— 11 percent more than the 278,130 seats per week flown in 2008.
Of this traffic volume, PAL had a market-leading share of 35 percent of all flights per week and 38 percent of all seats flown per week at the country’s premier airport.
Both figures represented increases over the 33 percent and 37 percent shares, respectively, that PAL posted in 2008, it added.
DARWIN G. AMOJELAR
Federation wants Aquino to step into PAL labor dispute
Thursday, 22 July 2010 00:00
The International Transport Workers’ Federation (ITF) has urged President Benigno Aquino 3rd to intervene in the labor dispute between Philippine Airline (PAL) and its employees.
“Given your election campaign platform, the ITF strongly urges your government to act swiftly and decisively to intervene in the PAL-Palea [Philippine Airline Employees’ Association] dispute to facilitate an acceptable resolution,” David Cockroft, general secretary of ITF said in a letter to President Aquino.
Cockfort added that the ITF supports Palea call for the new Labor Secretary, Rosalinda Baldoz, to be given the right to revisit the labor dispute and to make a decision in accordance with due process and on a just basis, especially given the potential social impact of the PAL management’s decision.
PAL had said it would spin off its three non-core businesses, letting go some 3,500 out of its 7,500-member workforce.
Suspected union busting
In June, the Department of Labor approved the planned retrenchment ssabout by the spin off of its three non-core units.
Cockroft said that the termination of as many as 3,000 employees is “perceived as a union-busting measure given the fact that these employees are all Palea members and include the union’s officers.”Palea is an affiliate of ITF. Cockroft added that these actions would be in breach of provisions against labor contracting and on job security contained within the company’s collective bargaining agreement.
“The ITF is aware that the aviation industry has been particularly badly hit by the economic crisis. However, ITF affiliates are clear that aviation workers are not responsible for the crisis but have borne a disproportionate burden of its cost. There is an urgent need to repair the damage inflicted upon them rather than to use this as an opportunity to attack workers’ rights and their unions,” Cockroft said.
Headquartered in London, the ITF represents more than 4.6 million transport workers in 759 unions across 155 countries, including 269 aviation unions with 645,609 members collectively.
Darwin G. Amojelar
The International Transport Workers’ Federation (ITF) has urged President Benigno Aquino 3rd to intervene in the labor dispute between Philippine Airline (PAL) and its employees.
“Given your election campaign platform, the ITF strongly urges your government to act swiftly and decisively to intervene in the PAL-Palea [Philippine Airline Employees’ Association] dispute to facilitate an acceptable resolution,” David Cockroft, general secretary of ITF said in a letter to President Aquino.
Cockfort added that the ITF supports Palea call for the new Labor Secretary, Rosalinda Baldoz, to be given the right to revisit the labor dispute and to make a decision in accordance with due process and on a just basis, especially given the potential social impact of the PAL management’s decision.
PAL had said it would spin off its three non-core businesses, letting go some 3,500 out of its 7,500-member workforce.
Suspected union busting
In June, the Department of Labor approved the planned retrenchment ssabout by the spin off of its three non-core units.
Cockroft said that the termination of as many as 3,000 employees is “perceived as a union-busting measure given the fact that these employees are all Palea members and include the union’s officers.”Palea is an affiliate of ITF. Cockroft added that these actions would be in breach of provisions against labor contracting and on job security contained within the company’s collective bargaining agreement.
“The ITF is aware that the aviation industry has been particularly badly hit by the economic crisis. However, ITF affiliates are clear that aviation workers are not responsible for the crisis but have borne a disproportionate burden of its cost. There is an urgent need to repair the damage inflicted upon them rather than to use this as an opportunity to attack workers’ rights and their unions,” Cockroft said.
Headquartered in London, the ITF represents more than 4.6 million transport workers in 759 unions across 155 countries, including 269 aviation unions with 645,609 members collectively.
Darwin G. Amojelar
Thursday, July 22, 2010
Aquino urged to stop PAL layoff
First posted 20:41:30 (Mla time) July 22, 2010
Paolo Montecillo
Philippine Daily Inquirer
AN INTERNATIONAL labor group representing 4.6 million transport sector employees worldwide has asked President Benigno “Noynoy” Aquino III to stop Philippine Airlines’ (PAL) plan to lay off 3,000 of its workers.
In a letter also addressed to Labor Secretary Rosalinda Baldoz, the International Transportation Workers Federation (ITF) said Aquino’s intervention in the PAL issue would be in line with his campaign promise to defend human rights.
“The dispute has arisen due to the apparent intention of the PAL management to implement mass dismissals and to contract out jobs being performed by regular employees,” ITF general secretary David Cockroft said.
“The ITF understands that these actions would be in breach of provisions against labor contracting and on job security contained within the company’s collective bargaining agreement,” he said.
“Given your election campaign platform, the ITF strongly urges your government to act swiftly and decisively to intervene in the PAL dispute to facilitate an acceptable resolution,” ITF said in its letter to Aquino.
PAL wants to sub-contract non-core tasks, like in-flight catering and airport services, to third parties to help the company cut costs.
The Lucio Tan firm also wants to transform itself into a leaner and meaner organization to attract investors that can infuse money into the bleeding firm.
The PAL Employees’ Association (Palea) has opposed the company’s plans, but the Department of Labor and Employment (Dole) last month declared the outsourcing plan a legal exercise of management prerogative.
But the ITF dismissed PAL’s motives as simple union busting to deprive workers of their basic rights.
“This move by the PAL management is also perceived as a union-busting measure given the fact that these employees are all Palea members and include the union’s officers,” the ITF said.
“The ITF is well aware of the impact of the current economic climate on the transport sector… The aviation industry has been particularly badly hit,” ITF said.
However, Cockroft said aviation workers, who are not responsible for the crisis, have borne a disproportionate burden of the cost of the crisis.
Paolo Montecillo
Philippine Daily Inquirer
AN INTERNATIONAL labor group representing 4.6 million transport sector employees worldwide has asked President Benigno “Noynoy” Aquino III to stop Philippine Airlines’ (PAL) plan to lay off 3,000 of its workers.
In a letter also addressed to Labor Secretary Rosalinda Baldoz, the International Transportation Workers Federation (ITF) said Aquino’s intervention in the PAL issue would be in line with his campaign promise to defend human rights.
“The dispute has arisen due to the apparent intention of the PAL management to implement mass dismissals and to contract out jobs being performed by regular employees,” ITF general secretary David Cockroft said.
“The ITF understands that these actions would be in breach of provisions against labor contracting and on job security contained within the company’s collective bargaining agreement,” he said.
“Given your election campaign platform, the ITF strongly urges your government to act swiftly and decisively to intervene in the PAL dispute to facilitate an acceptable resolution,” ITF said in its letter to Aquino.
PAL wants to sub-contract non-core tasks, like in-flight catering and airport services, to third parties to help the company cut costs.
The Lucio Tan firm also wants to transform itself into a leaner and meaner organization to attract investors that can infuse money into the bleeding firm.
The PAL Employees’ Association (Palea) has opposed the company’s plans, but the Department of Labor and Employment (Dole) last month declared the outsourcing plan a legal exercise of management prerogative.
But the ITF dismissed PAL’s motives as simple union busting to deprive workers of their basic rights.
“This move by the PAL management is also perceived as a union-busting measure given the fact that these employees are all Palea members and include the union’s officers,” the ITF said.
“The ITF is well aware of the impact of the current economic climate on the transport sector… The aviation industry has been particularly badly hit,” ITF said.
However, Cockroft said aviation workers, who are not responsible for the crisis, have borne a disproportionate burden of the cost of the crisis.
Wednesday, July 21, 2010
PAL eyes flights to India, expansion in Korea amid US, EU curbs
Business World
July 21, 2010
FLAG CARRIER Philippine Airlines (PAL) wants to mount direct flights to India for the first time and add a flight to South Korea amid continued restrictions on local airlines in the United States and Europe.
The Lucio C. Tan-led airline will focus on expanding operations in neighboring countries in Asia in the meantime, PAL President and Chief Operating Officer Jaime J. Bautista told BusinessWorld.
“Korea is a developed market already but India is really a huge market considering its population of more than a billion,” he said.
PAL, Asia’s first airline, expects to wrap up a deal with Indian authorities ahead of the Koreans.
“We are still finalizing our study because initially, we wanted to fly Manila to Bangkok to India. But we are having difficulties in getting landing rights in Bangkok so we are thinking of flying directly from Manila to Bombay or Manila to New Delhi,” Mr. Bautista said.
“Normally it will take you three to six months to do all the market studies, prepare for the operations, and get maintenance providers, caterers, and ground handlers,” he added.
PAL only has a general sales agent in India. For now, PAL clients in Manila must pass by Singapore, Hong Kong or Bangkok through other airlines to get to India.
Mr. Bautista said the feasibility study would be completed in a “few weeks.” The flag carrier will then seek slots from airport operators in India and an approval from the Indian Ministry of Civil Aviation, he said.
PAL is aiming to capture India citizens living in the Philippines and tourists, he said.
PAL is also studying the expansion of operations in Korea, where the airline has twice daily flights. “We can add one more flight a day,” Mr. Bautista said.
The airline may also fly bigger planes to Korea.
PAL flies from Manila or Cebu to Incheon and Busan with the 302-passenger Airbus A330-300 in the afternoon, and the 150-156-seater Airbus A320-200 in the evening.
“It is easy to add another flight if there is additional traffic ... what we only need is to get a slot in the airport,” Mr. Bautista said in Filipino.
“We are experiencing some improvement in the market,” Mr. Bautista added.
The focus on Asia stems from restrictions in the US. In 2008, the US Federal Aviation Administration downgraded the Philippines to Category 2 from Category 1 because of concerns over aircraft safety.
In April, the European Commission decided to ban Philippine carriers from European airspace.
“Under Category 2, we cannot have additional flights to the US, we cannot fly to new destinations, and we cannot add to the list of planes that can fly to the US,” Mr. Bautista said.
This was a setback “considering the US is one of our biggest markets,” he said.
PAL is the only local airline that flies to North America.
“We will concentrate on domestic and regional [destinations] in Asia, Australia, Japan and India,” he added.
PAL is expecting another net loss for the fiscal year ending March 31, after carrying more than nine million passengers.
With heavy losses due to the global economic downturn that started in 2008, PAL was forced to retrench 3,000 employees and outsource three non-core operations.
PAL reported a net loss of $40.2 million for nine months of its fiscal year, narrower than the $330.2 million recorded the previous year. Revenues rose by 15% to $1.08 billion but expenses reached $1.1 billion.
July 21, 2010
FLAG CARRIER Philippine Airlines (PAL) wants to mount direct flights to India for the first time and add a flight to South Korea amid continued restrictions on local airlines in the United States and Europe.
The Lucio C. Tan-led airline will focus on expanding operations in neighboring countries in Asia in the meantime, PAL President and Chief Operating Officer Jaime J. Bautista told BusinessWorld.
“Korea is a developed market already but India is really a huge market considering its population of more than a billion,” he said.
PAL, Asia’s first airline, expects to wrap up a deal with Indian authorities ahead of the Koreans.
“We are still finalizing our study because initially, we wanted to fly Manila to Bangkok to India. But we are having difficulties in getting landing rights in Bangkok so we are thinking of flying directly from Manila to Bombay or Manila to New Delhi,” Mr. Bautista said.
“Normally it will take you three to six months to do all the market studies, prepare for the operations, and get maintenance providers, caterers, and ground handlers,” he added.
PAL only has a general sales agent in India. For now, PAL clients in Manila must pass by Singapore, Hong Kong or Bangkok through other airlines to get to India.
Mr. Bautista said the feasibility study would be completed in a “few weeks.” The flag carrier will then seek slots from airport operators in India and an approval from the Indian Ministry of Civil Aviation, he said.
PAL is aiming to capture India citizens living in the Philippines and tourists, he said.
PAL is also studying the expansion of operations in Korea, where the airline has twice daily flights. “We can add one more flight a day,” Mr. Bautista said.
The airline may also fly bigger planes to Korea.
PAL flies from Manila or Cebu to Incheon and Busan with the 302-passenger Airbus A330-300 in the afternoon, and the 150-156-seater Airbus A320-200 in the evening.
“It is easy to add another flight if there is additional traffic ... what we only need is to get a slot in the airport,” Mr. Bautista said in Filipino.
“We are experiencing some improvement in the market,” Mr. Bautista added.
The focus on Asia stems from restrictions in the US. In 2008, the US Federal Aviation Administration downgraded the Philippines to Category 2 from Category 1 because of concerns over aircraft safety.
In April, the European Commission decided to ban Philippine carriers from European airspace.
“Under Category 2, we cannot have additional flights to the US, we cannot fly to new destinations, and we cannot add to the list of planes that can fly to the US,” Mr. Bautista said.
This was a setback “considering the US is one of our biggest markets,” he said.
PAL is the only local airline that flies to North America.
“We will concentrate on domestic and regional [destinations] in Asia, Australia, Japan and India,” he added.
PAL is expecting another net loss for the fiscal year ending March 31, after carrying more than nine million passengers.
With heavy losses due to the global economic downturn that started in 2008, PAL was forced to retrench 3,000 employees and outsource three non-core operations.
PAL reported a net loss of $40.2 million for nine months of its fiscal year, narrower than the $330.2 million recorded the previous year. Revenues rose by 15% to $1.08 billion but expenses reached $1.1 billion.
Tuesday, July 20, 2010
Airphil Express to increase number of flights to Davao
Posted on 09:33 PM, July 19, 2010
Business World
DAVAO CITY -- Air Philippines Express is resuming its daily flights to this city on Wednesday and will have three low-fare Davao-Manila flights starting in October, company officials said.
Air Philippines Boeing 737 -- www.wikipedia.org“We are a low-cost airline but that does not mean that we are the cheapest,” said Maria R. Java, marketing, media, e-commerce and product head of the company.
“We assure our customers that they will get the value of their money,” she added.
The company suspended its Davao operations on Oct. 1, 2009 due to economic reasons. With the resumption of the Davao flights, Air Philippines is offering an P800 fare for its Davao-Manila route and P600 for its Cebu-Manila route.
A regular discounted ticket for a Davao-Manila flight costs about P2,500.
Ms. Java said the airline has invested heavily in its fleet. The fleet includes two 180-seater Airbus A320s with one servicing the Davao-Manila route.
Some of its aircraft, particularly the Q300s and Q400s, are slightly older but are well-maintained, she added.
The budget airline will add six Airbus A320 units next year, said Snooker D. Jaranilla, company sales head, adding it hopes to double its destinations from 24 this year to 48 next year.
Air Philippines is also looking at servicing the Manila-Singapore route, Mr. Jaranilla said.
Ms. Java added that the company, a sister firm of Philippine Airlines which has five daily flights from this city, is finalizing its plan to make the Davao International Airport its Mindanao hub.
“We might launch the [Davao] hub next year,” she said.
If this plan pushes through, the company will consider the possibility of servicing the Davao-Singapore and the Davao-Malaysia routes.
Ms. Java said the company has been studying these routes as it continues to look for other Mindanao routes to service.
“We want to be part of the community. We want to be known as a community-based airline,” she added, pointing out that the re-launching of the company did not only mean a repackaging but also a change in the management team.
“Air Philippines Express is in a unique position. We have a history of deliberate attentive service to uphold yet we intend to meet our customers’ expectations of efficiency, as is expected by most businesses today,” she said.
The company figured in an accident on April 19, 2000 when Flight 541 from Manila to Davao crashed on Samal Island, killing all 131 people on board.
Considered the worst plane crash in this part of the world, it was blamed on a 20-year-old aircraft leased from an American firm.
Three years ago, an out-of-court settlement resulted in an agreement that gave out roughly $1 million in cash for each of the family’s victims. -- Carmelito Q. Francisco |
Business World
DAVAO CITY -- Air Philippines Express is resuming its daily flights to this city on Wednesday and will have three low-fare Davao-Manila flights starting in October, company officials said.
Air Philippines Boeing 737 -- www.wikipedia.org“We are a low-cost airline but that does not mean that we are the cheapest,” said Maria R. Java, marketing, media, e-commerce and product head of the company.
“We assure our customers that they will get the value of their money,” she added.
The company suspended its Davao operations on Oct. 1, 2009 due to economic reasons. With the resumption of the Davao flights, Air Philippines is offering an P800 fare for its Davao-Manila route and P600 for its Cebu-Manila route.
A regular discounted ticket for a Davao-Manila flight costs about P2,500.
Ms. Java said the airline has invested heavily in its fleet. The fleet includes two 180-seater Airbus A320s with one servicing the Davao-Manila route.
Some of its aircraft, particularly the Q300s and Q400s, are slightly older but are well-maintained, she added.
The budget airline will add six Airbus A320 units next year, said Snooker D. Jaranilla, company sales head, adding it hopes to double its destinations from 24 this year to 48 next year.
Air Philippines is also looking at servicing the Manila-Singapore route, Mr. Jaranilla said.
Ms. Java added that the company, a sister firm of Philippine Airlines which has five daily flights from this city, is finalizing its plan to make the Davao International Airport its Mindanao hub.
“We might launch the [Davao] hub next year,” she said.
If this plan pushes through, the company will consider the possibility of servicing the Davao-Singapore and the Davao-Malaysia routes.
Ms. Java said the company has been studying these routes as it continues to look for other Mindanao routes to service.
“We want to be part of the community. We want to be known as a community-based airline,” she added, pointing out that the re-launching of the company did not only mean a repackaging but also a change in the management team.
“Air Philippines Express is in a unique position. We have a history of deliberate attentive service to uphold yet we intend to meet our customers’ expectations of efficiency, as is expected by most businesses today,” she said.
The company figured in an accident on April 19, 2000 when Flight 541 from Manila to Davao crashed on Samal Island, killing all 131 people on board.
Considered the worst plane crash in this part of the world, it was blamed on a 20-year-old aircraft leased from an American firm.
Three years ago, an out-of-court settlement resulted in an agreement that gave out roughly $1 million in cash for each of the family’s victims. -- Carmelito Q. Francisco |
Monday, July 19, 2010
PAL sees clearer skies ahead as recovery holds
First posted 00:49:58 (Mla time) July 19, 2010
Paolo Montecillo
Philippine Daily Inquirer
MANILA, Philippines—Flag carrier Philippine Airlines (PAL) is seeing clearer skies ahead as a result of a steady, albeit modest, recovery in the local and international aviation market.
PAL president and chief operating officer Jaime J. Bautista said the company has experienced a slight rebound, in line with the recovery of airlines around the world as a result of the improvement in global economic prospects.
The resulting improvement in the company’s cash flow, Bautista said, helped PAL repay $46.5 million in loans that matured last month.
“We were able to pay that entire amount because we have implemented a lot of initiatives to raise cash and reduce costs,” he told reporters.
“The projection of the industry is a better 2010 and 2011. We are seeing a semblance of the market moving toward that direction,” Bautista said.
But he said the Lucio Tan-led firm would remain cautious due to the several challenges the local airline industry continued to face.
“We don’t want to call it a full recovery. We still have a lot of problems. There is the category 2 status and the European blacklist,” he said.
Bautista was referring to the US Federal Aviation Authority’s downgrade of the Philippines to category 2 status due to concerns over the country’s air safety standards. The downgrade bars Philippine carriers from expanding operations in the United States, which only affects PAL, being the only airline that flies to North America.
The European Union has also put the Philippines on a blacklist of countries whose airlines are banned from flying to the continent due to poor safety procedures.
“Although the market is improving, we still have to look for ways to cut costs and boost revenues,” Bautista said.
One way the company plans to reduce expenses is by sub-contracting its non-core tasks, including catering and airport services, to third party providers.
The labor department earlier ruled the controversial move, which will affect close to 3,000 employees, as a legal exercise of management prerogative. PAL workers have appealed the decision.
PAL posted a $40.2-million net loss in the April-December period of 2009, which is the first three quarters of the company’s fiscal year. Bautista said PAL would release its full-year financial results this week.
Paolo Montecillo
Philippine Daily Inquirer
MANILA, Philippines—Flag carrier Philippine Airlines (PAL) is seeing clearer skies ahead as a result of a steady, albeit modest, recovery in the local and international aviation market.
PAL president and chief operating officer Jaime J. Bautista said the company has experienced a slight rebound, in line with the recovery of airlines around the world as a result of the improvement in global economic prospects.
The resulting improvement in the company’s cash flow, Bautista said, helped PAL repay $46.5 million in loans that matured last month.
“We were able to pay that entire amount because we have implemented a lot of initiatives to raise cash and reduce costs,” he told reporters.
“The projection of the industry is a better 2010 and 2011. We are seeing a semblance of the market moving toward that direction,” Bautista said.
But he said the Lucio Tan-led firm would remain cautious due to the several challenges the local airline industry continued to face.
“We don’t want to call it a full recovery. We still have a lot of problems. There is the category 2 status and the European blacklist,” he said.
Bautista was referring to the US Federal Aviation Authority’s downgrade of the Philippines to category 2 status due to concerns over the country’s air safety standards. The downgrade bars Philippine carriers from expanding operations in the United States, which only affects PAL, being the only airline that flies to North America.
The European Union has also put the Philippines on a blacklist of countries whose airlines are banned from flying to the continent due to poor safety procedures.
“Although the market is improving, we still have to look for ways to cut costs and boost revenues,” Bautista said.
One way the company plans to reduce expenses is by sub-contracting its non-core tasks, including catering and airport services, to third party providers.
The labor department earlier ruled the controversial move, which will affect close to 3,000 employees, as a legal exercise of management prerogative. PAL workers have appealed the decision.
PAL posted a $40.2-million net loss in the April-December period of 2009, which is the first three quarters of the company’s fiscal year. Bautista said PAL would release its full-year financial results this week.
EU unmoved by PAL pleas to lift ban
First posted 21:59:57 (Mla time) July 19, 2010
Paolo Montecillo
Philippine Daily Inquirer
THE EUROPEAN Union (EU) has refused to remove the Philippines from a list of countries whose airlines are banned from flying to the continent due to the lack of substantial industry-wide reforms in their local aviation sector.
Philippine Airlines said it was able to convince EU officials that PAL was of international standards. However, the company’s pleas to be excluded from the ban fell on deaf ears.
“We made a presentation to the EU last June and we were able to convince them that we are a safe airline,” PAL president and chief operating officer Jaime J. Bautista said in a recent interview.
“But they told us they were sorry and they could not give in to our request to be taken out of the blacklist,” he said.
The ban stemmed from a recent audit by the International Civil Aviation Organization (Icao), whose officials raised “serious safety concerns” over the state of the country’s aviation sector.
Particularly, the Icao pointed out the lack of professionalism within the Civil Aviation Authority of the Philippines (CAAP), which was tasked to make sure that local airlines were safe to fly.
Following the poor grade received from Icao, Philippine carriers were thrown into a blacklist of airlines banned from flying to Europe.
The CAAP, now under the leadership of former Manila airport manager Alfonso Cusi, has started to implement reforms since then, including the grounding of several aircraft found to have fallen short of international safety norms.
Bautista said that although PAL has no flights to Europe at the moment, the ban kept the airline from making plans to revive operations in the continent. Before being forced into rehabilitation in the late 1990s, PAL used to have flights to popular cities like London, Rome and Paris.
Bautista likewise said that as a result of the ban, European travel agencies have stopped selling PAL tickets to tourists who may want to take the flag carrier to visit attractions in the Philippines.
PAL is also the only local airline that has the aircraft capable of going on long-haul flights to Europe.
Aside from the EU ban, the Philippines was also downgraded to a category 2 status by the US Federal Aviation Authority (FAA). Again, the low grade only affected PAL, being the only airline that flies to North America.
Paolo Montecillo
Philippine Daily Inquirer
THE EUROPEAN Union (EU) has refused to remove the Philippines from a list of countries whose airlines are banned from flying to the continent due to the lack of substantial industry-wide reforms in their local aviation sector.
Philippine Airlines said it was able to convince EU officials that PAL was of international standards. However, the company’s pleas to be excluded from the ban fell on deaf ears.
“We made a presentation to the EU last June and we were able to convince them that we are a safe airline,” PAL president and chief operating officer Jaime J. Bautista said in a recent interview.
“But they told us they were sorry and they could not give in to our request to be taken out of the blacklist,” he said.
The ban stemmed from a recent audit by the International Civil Aviation Organization (Icao), whose officials raised “serious safety concerns” over the state of the country’s aviation sector.
Particularly, the Icao pointed out the lack of professionalism within the Civil Aviation Authority of the Philippines (CAAP), which was tasked to make sure that local airlines were safe to fly.
Following the poor grade received from Icao, Philippine carriers were thrown into a blacklist of airlines banned from flying to Europe.
The CAAP, now under the leadership of former Manila airport manager Alfonso Cusi, has started to implement reforms since then, including the grounding of several aircraft found to have fallen short of international safety norms.
Bautista said that although PAL has no flights to Europe at the moment, the ban kept the airline from making plans to revive operations in the continent. Before being forced into rehabilitation in the late 1990s, PAL used to have flights to popular cities like London, Rome and Paris.
Bautista likewise said that as a result of the ban, European travel agencies have stopped selling PAL tickets to tourists who may want to take the flag carrier to visit attractions in the Philippines.
PAL is also the only local airline that has the aircraft capable of going on long-haul flights to Europe.
Aside from the EU ban, the Philippines was also downgraded to a category 2 status by the US Federal Aviation Authority (FAA). Again, the low grade only affected PAL, being the only airline that flies to North America.
Lucio Tan to cut stake in PAL
Monday, 19 July 2010 00:00
BY DARWIN G. AMOJELAR SENIOR REPORTER
The Manila Times
PHILIPPINE Airlines Inc. (PAL) is in talks with several fund managers and Asian carriers for possible investment in the Lucio Tan-owned company. “The shareholders want [investors] to inject fresh capital. So, PAL will not get from the shareholders.
That’s the structure that we are looking at rather than the shareholders selling their shares,” Jaime Bautista, the flag carrier’s president told reporters on Friday.
“We will issue new shares—that’s the ideal. It’s possible through PAL Holdings Inc.,” he added.
PAL Holdings owns 84.7 percent of the flag carrier.
Bautista said Tan’s stake may be diluted if the tobacco tycoon decides not to infuse additional capital into the firm.
“It’s okay with him [Tan] as long as the money will go to PAL,” Bautista said.
In 1998, Hong Kong-based Cathay Pacific Airways Ltd. had contemplated on investing P4 billion in PAL but the plan failed to materialize because of “major differences.”
The Philippine carrier sought rehabilitation in 1998 after racking up $2.12 billion in debts.
Bautista said Cathay and the International Airline of United Arab Emirates were not among the carriers that PAL is in discussions with.
PAL Holdings’ shares have been climbing, from P3 at the start of the month to P4.85 on Friday, as rumors circulated that new investors were about to come in. On July 14, its shares hit P5.20.
Despite financial difficulties, PAL settled $40 million in maturing debts last month, on top of the $10 million it has been paying monthly, Bautista said.
The 69-year-old airline was able to bring down its liabilities to about $1 billion since entering corporate receivership. The company emerged from receivership after recording a profit in 2007.
But the airline’s finances spiraled in the succeeding three years as it incurred over $350 million, or at least P15 billion, in losses during its last two fiscal years.
Its equity also dropped precipitously to a little over $1.1 million as of February this year, the airline said.
Because of this, the company decided to let go of at least 3,000 employees with the spin-off of its three core businesses.
The affected workers belong to the in-flight catering services, airport services (including ground handling, cargo terminal/cargo handling, and ramp handling) and call center reservations.
Although the industry is improving, Bautista said PAL has “to continue implement[ing] more measures to generate more revenues and reduce costs.”
Besides its debts, the airline is also dealing with the problems brought about by the Philippines’ Category 2 rating by the US Federal Aviation Administration and the blacklisting by the European Union. These sanctions barred PAL from flying to these important destinations.
On top of these, the company also needs to tackle manpower problems, especially with pilots, “because of the industry’s increased capacity,” Bautista said.
BY DARWIN G. AMOJELAR SENIOR REPORTER
The Manila Times
PHILIPPINE Airlines Inc. (PAL) is in talks with several fund managers and Asian carriers for possible investment in the Lucio Tan-owned company. “The shareholders want [investors] to inject fresh capital. So, PAL will not get from the shareholders.
That’s the structure that we are looking at rather than the shareholders selling their shares,” Jaime Bautista, the flag carrier’s president told reporters on Friday.
“We will issue new shares—that’s the ideal. It’s possible through PAL Holdings Inc.,” he added.
PAL Holdings owns 84.7 percent of the flag carrier.
Bautista said Tan’s stake may be diluted if the tobacco tycoon decides not to infuse additional capital into the firm.
“It’s okay with him [Tan] as long as the money will go to PAL,” Bautista said.
In 1998, Hong Kong-based Cathay Pacific Airways Ltd. had contemplated on investing P4 billion in PAL but the plan failed to materialize because of “major differences.”
The Philippine carrier sought rehabilitation in 1998 after racking up $2.12 billion in debts.
Bautista said Cathay and the International Airline of United Arab Emirates were not among the carriers that PAL is in discussions with.
PAL Holdings’ shares have been climbing, from P3 at the start of the month to P4.85 on Friday, as rumors circulated that new investors were about to come in. On July 14, its shares hit P5.20.
Despite financial difficulties, PAL settled $40 million in maturing debts last month, on top of the $10 million it has been paying monthly, Bautista said.
The 69-year-old airline was able to bring down its liabilities to about $1 billion since entering corporate receivership. The company emerged from receivership after recording a profit in 2007.
But the airline’s finances spiraled in the succeeding three years as it incurred over $350 million, or at least P15 billion, in losses during its last two fiscal years.
Its equity also dropped precipitously to a little over $1.1 million as of February this year, the airline said.
Because of this, the company decided to let go of at least 3,000 employees with the spin-off of its three core businesses.
The affected workers belong to the in-flight catering services, airport services (including ground handling, cargo terminal/cargo handling, and ramp handling) and call center reservations.
Although the industry is improving, Bautista said PAL has “to continue implement[ing] more measures to generate more revenues and reduce costs.”
Besides its debts, the airline is also dealing with the problems brought about by the Philippines’ Category 2 rating by the US Federal Aviation Administration and the blacklisting by the European Union. These sanctions barred PAL from flying to these important destinations.
On top of these, the company also needs to tackle manpower problems, especially with pilots, “because of the industry’s increased capacity,” Bautista said.
Lucio Tan seeks new investors in capital-starved PAL
by Jenniffer B. Austria
July 19, 2010
Manila Standard Today
BEER and tobacco tycoon Lucio Tan is willing to reduce his stake in Philippine Airlines to accommodate fresh capital from potential investors, an official said over the weekend.
Tan would not be selling his shares, but instead the airline would be offering new shares to obtain new capital, company president Jaime Bautista said. That meant Tan’s shares in the airline would be diluted, he said.
“We are looking at fresh equity that will go directly to PAL,” Bautista said, but stressed that Tan wanted to keep majority control of the company while opening the carrier to new investors. Tan owns over 90 percent of the airline.
“The preference is for Mr. Tan to maintain majority control of the airline,” Bautista said. He said the company was now talking to potential foreign investors but refused to identify them.
The airline’s shareholders last year approved a quasi-reorganization plan to attract new investors. The plan is to reduce the par value of its shares to P0.20 from P0.80 a share, and then to increase its authorized capital stock from P16 billion to P20 billion divided into 100 billion shares at P0.20 a share.
PAL started entertaining talks with potential investors in a bid to boost the airline’s finances, which have deteriorated over the past two years as a result of the global financial crisis, stiff competition from low-cost airlines, and rising fuel costs.
The airline reported a net loss of $40.2 million in the first nine months of its fiscal year ending December 2009, an improvement from the $330.2 million it lost a year earlier. The company’s revenues rose 15 percent to $1.08 billion, but its expenses amounted to $1.1 billion.
To reduce costs, the flag carrier earlier disclosed plans to offer early retirement packages to its 8,000 employees and to reduce the number of flights to its long-haul destinations, and in particular the United States, Australia and Canada.
Sources within the airline said the carrier lost $14.3 million in its fiscal year ending March 2010, a reduction from the previous year’s loss of $297.8 million.
They said lower fares and weak passenger demand from its international operations drove revenues down to $1.36 billion from $1.60 billion.
Worldwide capacity cuts during the year did not keep pace with declining traffic demand, hence exerting significant pressure on fares and yields, the sources said.
July 19, 2010
Manila Standard Today
BEER and tobacco tycoon Lucio Tan is willing to reduce his stake in Philippine Airlines to accommodate fresh capital from potential investors, an official said over the weekend.
Tan would not be selling his shares, but instead the airline would be offering new shares to obtain new capital, company president Jaime Bautista said. That meant Tan’s shares in the airline would be diluted, he said.
“We are looking at fresh equity that will go directly to PAL,” Bautista said, but stressed that Tan wanted to keep majority control of the company while opening the carrier to new investors. Tan owns over 90 percent of the airline.
“The preference is for Mr. Tan to maintain majority control of the airline,” Bautista said. He said the company was now talking to potential foreign investors but refused to identify them.
The airline’s shareholders last year approved a quasi-reorganization plan to attract new investors. The plan is to reduce the par value of its shares to P0.20 from P0.80 a share, and then to increase its authorized capital stock from P16 billion to P20 billion divided into 100 billion shares at P0.20 a share.
PAL started entertaining talks with potential investors in a bid to boost the airline’s finances, which have deteriorated over the past two years as a result of the global financial crisis, stiff competition from low-cost airlines, and rising fuel costs.
The airline reported a net loss of $40.2 million in the first nine months of its fiscal year ending December 2009, an improvement from the $330.2 million it lost a year earlier. The company’s revenues rose 15 percent to $1.08 billion, but its expenses amounted to $1.1 billion.
To reduce costs, the flag carrier earlier disclosed plans to offer early retirement packages to its 8,000 employees and to reduce the number of flights to its long-haul destinations, and in particular the United States, Australia and Canada.
Sources within the airline said the carrier lost $14.3 million in its fiscal year ending March 2010, a reduction from the previous year’s loss of $297.8 million.
They said lower fares and weak passenger demand from its international operations drove revenues down to $1.36 billion from $1.60 billion.
Worldwide capacity cuts during the year did not keep pace with declining traffic demand, hence exerting significant pressure on fares and yields, the sources said.
Sunday, July 18, 2010
Court denies PAL’s bid to refund taxes on interest earnings
July 18, 2010
Business World
THE COURT of Tax Appeals has denied Philippine Airlines’ (PAL) claim for a refund of some P4 million in taxes withheld by banks, as there was supposedly no evidence the amount had been remitted to the government.
PHILIPPINE Airlines is asserting its tax perks under Presidential Decree No. 1590, which requires it to pay only the corporate income tax or a 2% tax on gross revenues, whichever is lower. -- Bw file photoIn a ruling last May 11, the tax court said certifications from seven banks in which PAL had accounts were not corroborated by documents from the Bureau of Internal Revenue (BIR).
The Lucio C. Tan-led carrier wanted P3,621,067.51 in interest income refunded, citing tax perks under its franchise. The amount was withheld from peso and US dollar bank accounts, representing 20% and 7.5% in final income taxes in 2003.
“It bears stressing that equally important to petitioner PAL’s claim for refund is evidence showing that the taxes withheld from petitioner PAL’s interest income [was] actually remitted to the BIR,” the court ruling said.
Under Presidential Decree (PD) No. 1590, PAL was granted a legislative franchise that exempted it from taxes, including withholding taxes. In lieu of the exemption, PAL was made to pay either the corporate income tax or a franchise tax of 2% of gross revenues, “whichever will result in lower tax.”
The court, in its ruling, recognized this right of the airline, but said lack of documents failed PAL’s claim for a tax refund.
To prove that it had earned interest income on its bank deposits, PAL presented as evidence certifications and certificates of final tax from seven banks worldwide, namely: Tan-led Allied Banking Corp., China Banking Corp., Hong Kong Shanghai Banking Corp., JP Morgan Chase Bank, Land Bank of the Philippines, Standard Chartered Bank, and Philippine Bank of Communications.
PAL claimed that a total of P203,260.34 and $62,311.89 worth of final taxes were withheld by the seven banks, court records showed.
The tax court said PAL should not only establish its rightful claim to a refund, but also the exact amount of refund it was seeking.
“Without supporting documents to prove that the amount PAL is claiming for refund had in fact been remitted to the BIR, this court cannot determine the exact amount refundable to [the airline] by reason of its exemption from all other taxes,” the ruling said.
“This court can order [the BIR] refund to petitioner PAL only the amount of taxes duly withheld and actually remitted to the government,” the decision said.
On Feb. 4, the Supreme Court reversed an earlier decision by the tax court, ordering the refund of P141,431 representing the 10% overseas communication tax it had paid to Philippine Long Distance Telephone Co. on overseas calls in 2002.
The Supreme Court also cited PD 1590 as basis for its ruling. -- P. P. Magtulis
Business World
THE COURT of Tax Appeals has denied Philippine Airlines’ (PAL) claim for a refund of some P4 million in taxes withheld by banks, as there was supposedly no evidence the amount had been remitted to the government.
PHILIPPINE Airlines is asserting its tax perks under Presidential Decree No. 1590, which requires it to pay only the corporate income tax or a 2% tax on gross revenues, whichever is lower. -- Bw file photoIn a ruling last May 11, the tax court said certifications from seven banks in which PAL had accounts were not corroborated by documents from the Bureau of Internal Revenue (BIR).
The Lucio C. Tan-led carrier wanted P3,621,067.51 in interest income refunded, citing tax perks under its franchise. The amount was withheld from peso and US dollar bank accounts, representing 20% and 7.5% in final income taxes in 2003.
“It bears stressing that equally important to petitioner PAL’s claim for refund is evidence showing that the taxes withheld from petitioner PAL’s interest income [was] actually remitted to the BIR,” the court ruling said.
Under Presidential Decree (PD) No. 1590, PAL was granted a legislative franchise that exempted it from taxes, including withholding taxes. In lieu of the exemption, PAL was made to pay either the corporate income tax or a franchise tax of 2% of gross revenues, “whichever will result in lower tax.”
The court, in its ruling, recognized this right of the airline, but said lack of documents failed PAL’s claim for a tax refund.
To prove that it had earned interest income on its bank deposits, PAL presented as evidence certifications and certificates of final tax from seven banks worldwide, namely: Tan-led Allied Banking Corp., China Banking Corp., Hong Kong Shanghai Banking Corp., JP Morgan Chase Bank, Land Bank of the Philippines, Standard Chartered Bank, and Philippine Bank of Communications.
PAL claimed that a total of P203,260.34 and $62,311.89 worth of final taxes were withheld by the seven banks, court records showed.
The tax court said PAL should not only establish its rightful claim to a refund, but also the exact amount of refund it was seeking.
“Without supporting documents to prove that the amount PAL is claiming for refund had in fact been remitted to the BIR, this court cannot determine the exact amount refundable to [the airline] by reason of its exemption from all other taxes,” the ruling said.
“This court can order [the BIR] refund to petitioner PAL only the amount of taxes duly withheld and actually remitted to the government,” the decision said.
On Feb. 4, the Supreme Court reversed an earlier decision by the tax court, ordering the refund of P141,431 representing the 10% overseas communication tax it had paid to Philippine Long Distance Telephone Co. on overseas calls in 2002.
The Supreme Court also cited PD 1590 as basis for its ruling. -- P. P. Magtulis
Friday, July 9, 2010
San Miguel Corp. keen on acquiring majority stake in PAL
By Ma Elisa P. Osorio (The Philippine Star) Updated July 09, 2010 12:00 AM
MANILA, Philippines - Diversifying conglome-rate San Miguel Corp. (SMC) has expressed inte-rest in acquiring a controlling stake in flag carrier Philippine Airlines (PAL) from the Lucio Tan Group.
In an interview with reporters Wednesday evening, SMC president and chief operating officer Ramon S. Ang said, however, that they will only buy PAL if they can get at least 51 percent.
“We need to at least get 51 percent so that we are the majority. If not, then what is it for,” he said.
However, Ang said he expects Tan to sell PAL only to foreign companies. “It’s a pride thing. They will not sell to local companies. They will sell to a foreigner but not to locals.” Early this year, Tan surrendered control of his cigarette company Fortune Tobacco to Philip Morris.
When asked if they can make PAL more profitable, Ang said “the airline business is a very simple business,” adding they will definitely make more money for PAL.
In the same event, PAL president Jaime Bautista pointed out they have not yet discussed any plans of selling the flag carrier. “That matter has never been discussed in our meetings.”
Bautista noted that the airline is doing well and they are looking forward to a good year due to the opening of new flights.
But a source from PAL said a number of companies have been doing due diligence on the firm but the case between PAL and its workers have delayed the proceedings. The source noted that some companies are waiting for the final resolution of the labor problem. The source said although there are a number of firms that have expressed interest in buying PAL, they have been approaching the wrong people.
MANILA, Philippines - Diversifying conglome-rate San Miguel Corp. (SMC) has expressed inte-rest in acquiring a controlling stake in flag carrier Philippine Airlines (PAL) from the Lucio Tan Group.
In an interview with reporters Wednesday evening, SMC president and chief operating officer Ramon S. Ang said, however, that they will only buy PAL if they can get at least 51 percent.
“We need to at least get 51 percent so that we are the majority. If not, then what is it for,” he said.
However, Ang said he expects Tan to sell PAL only to foreign companies. “It’s a pride thing. They will not sell to local companies. They will sell to a foreigner but not to locals.” Early this year, Tan surrendered control of his cigarette company Fortune Tobacco to Philip Morris.
When asked if they can make PAL more profitable, Ang said “the airline business is a very simple business,” adding they will definitely make more money for PAL.
In the same event, PAL president Jaime Bautista pointed out they have not yet discussed any plans of selling the flag carrier. “That matter has never been discussed in our meetings.”
Bautista noted that the airline is doing well and they are looking forward to a good year due to the opening of new flights.
But a source from PAL said a number of companies have been doing due diligence on the firm but the case between PAL and its workers have delayed the proceedings. The source noted that some companies are waiting for the final resolution of the labor problem. The source said although there are a number of firms that have expressed interest in buying PAL, they have been approaching the wrong people.
Subscribe to:
Posts (Atom)