Philippine Daily Inquirer
August 27, 2011
The first of a series of town hall meetings and the service of notices of separation to more than 2,300 workers affected by the outsourcing program of Philippine Airlines proceeded smoothly despite last ditch efforts by its ground workers’ union to question the airline’s spin off/outsourcing program, the airline said Friday.
The airline said over 700 workers or almost 30 percent of all the personnel in its catering, ground-handling and call center reservations units in Manila and Cebu have received their separation letters.
The PAL Employees Association (Palea) said it had filed a petition with the Court of Appeals to stop the spinoff program, but the PAL counsel Clara de Castro said such petition does not bar PAL management from going ahead with the airline’s spinoff/outsourcing program.
“PAL is proceeding with the spin off/outsourcing on the basis of legal and valid orders from the Department of Labor and Employment (DoLE) and the Office of the President which are considered ‘final and executory.’ And under the Rules of Procedure, the mere filing of such petition does not automatically bar implementation of said lawful orders. Moreover, the mere filing with the CA does not necessarily mean that the appellate court would give due course to Palea’s petition,” De Castro said.
Malacañang on August 11 affirmed the Department of Labor’s decision to uphold the spinoff/outsourcing program as a valid and legal exercise of management prerogative. The DoLE and Palace orders became the basis for PAL to kick off the spinoff program.
Saturday, August 27, 2011
Philippine Airlines cuts 2,600 jobs to curtail losses
BBC
British Broadcasting Corporation
August 26, 2011
http://www.bbc.co.uk/news/business-14675370
Philippine airlines employees protesting Philippine Airlines' employees have protested against the proposed restructuring plan.
Philippine Airlines (PAL) has announced 2,600 job cuts as it looks to restructure its operations in a bid to reduce losses.
The airline is planning to outsource jobs in departments such as catering and passenger handling as part of its turnaround plan.
The carrier said staff affected by the cuts can still be employed by the firms contracted to provide those services.
Philippine Airlines reported losses of $10.6m for the first quarter.
Jaime Bautista, president of Philippine Airlines, said the restructuring was "a painful but necessary decision to ensure PAL's viability and long-term survival."
The outsourcing is expected to reduce the carrier's operating costs by up to $15m (£9m) a year.
However, a union for airline employees has rejected the plan and there have been concerns over a possible strike by its members.
Refleeting
Philippine Airlines currently operates 36 jets and Mr Bautista said the carrier is planning to add more planes to its fleet.
The airline is expected to take delivery of two Boeing 777-300ER and four Airbus 320 jets next year.
"This will allow us to expand our presence in our current markets through increased frequencies and introduce new destinations, especially in the booming Asian region," he said.
However, as volatile fuel prices continue to hurt profits of airlines, Mr Bautista added the company needed to ensure that it upgrades its fleet with "more fuel efficient" aircraft in order to be more competitive.
"This will provide us the avenue for bringing down unit costs and improve our ability to price more competitively," he said.
British Broadcasting Corporation
August 26, 2011
http://www.bbc.co.uk/news/business-14675370
Philippine airlines employees protesting Philippine Airlines' employees have protested against the proposed restructuring plan.
Philippine Airlines (PAL) has announced 2,600 job cuts as it looks to restructure its operations in a bid to reduce losses.
The airline is planning to outsource jobs in departments such as catering and passenger handling as part of its turnaround plan.
The carrier said staff affected by the cuts can still be employed by the firms contracted to provide those services.
Philippine Airlines reported losses of $10.6m for the first quarter.
Jaime Bautista, president of Philippine Airlines, said the restructuring was "a painful but necessary decision to ensure PAL's viability and long-term survival."
The outsourcing is expected to reduce the carrier's operating costs by up to $15m (£9m) a year.
However, a union for airline employees has rejected the plan and there have been concerns over a possible strike by its members.
Refleeting
Philippine Airlines currently operates 36 jets and Mr Bautista said the carrier is planning to add more planes to its fleet.
The airline is expected to take delivery of two Boeing 777-300ER and four Airbus 320 jets next year.
"This will allow us to expand our presence in our current markets through increased frequencies and introduce new destinations, especially in the booming Asian region," he said.
However, as volatile fuel prices continue to hurt profits of airlines, Mr Bautista added the company needed to ensure that it upgrades its fleet with "more fuel efficient" aircraft in order to be more competitive.
"This will provide us the avenue for bringing down unit costs and improve our ability to price more competitively," he said.
Thursday, August 25, 2011
PAL says outsourcing plan to commence soon
Manila Standard Today
August 25, 2011
By Jeremiah F. de Guzman
Flag carrier Philippine Airlines will serve notices of termination to 2,600 ground employees as early as tomorrow as part of its job outsourcing program.
“PAL will definitely implement the spinoff. It will surely be this year, that’s the target. From a legal standpoint, only a temporary restraining order can prevent the implementation of the spinoff,” the source said Wednesday.
The source said affected are 2,000 from airport services, 400 from the catering section and 100 from call center reservations.
“They will be given notices of termination all at the same time,” the source said, adding the affected employees would be notified several days before the actual date.
Another source told the Manila Standard that notices of terminations would be sent out Friday to employees in the ground-handling, catering and call center reservations sections.
Gerardo Rivera, PAL Employees’ Association president, said in a phone interview Wednesday that the union was informed by a source inside the management that “termination letters” will be distributed tomorrow.
“We told the management not to make premature decisions because we will be availing of all available remedies and that include going to the Court of Appeals to file an appeal,” he said.
“In fact, we are targeting to file an appeal with the CA. Pending final judicial decision, Malacañang’s affirmation of PAL’s outsourcing plan is not final and executory,” Rivera added.
Sought for comment, PAL spokesman Cielo Villaluna said “there is no existing legal prohibition on the implementation of the spinoff plan.”
She declined to disclose the implementation date and the mechanics of the spinoff.
“These are details we cannot disclose, as yet. The employees who will be covered by the spinoff have the right to be informed first,” Villaluna added.
She said meetings were slated to commence in different departments soon. These will serve as venues for discussion on the orderly implementation of the spinoff plan, separation package and the process of availing it.
PAL’s move to outsource call center, ground-handling and catering services aims to reduce cost to ensure its long- term viability.
The Lucio Tan-owned airline expects to save up to $1 billion in operating costs if it could successfully trim its workforce to about 4,000 from around 7,000 now.
August 25, 2011
By Jeremiah F. de Guzman
Flag carrier Philippine Airlines will serve notices of termination to 2,600 ground employees as early as tomorrow as part of its job outsourcing program.
“PAL will definitely implement the spinoff. It will surely be this year, that’s the target. From a legal standpoint, only a temporary restraining order can prevent the implementation of the spinoff,” the source said Wednesday.
The source said affected are 2,000 from airport services, 400 from the catering section and 100 from call center reservations.
“They will be given notices of termination all at the same time,” the source said, adding the affected employees would be notified several days before the actual date.
Another source told the Manila Standard that notices of terminations would be sent out Friday to employees in the ground-handling, catering and call center reservations sections.
Gerardo Rivera, PAL Employees’ Association president, said in a phone interview Wednesday that the union was informed by a source inside the management that “termination letters” will be distributed tomorrow.
“We told the management not to make premature decisions because we will be availing of all available remedies and that include going to the Court of Appeals to file an appeal,” he said.
“In fact, we are targeting to file an appeal with the CA. Pending final judicial decision, Malacañang’s affirmation of PAL’s outsourcing plan is not final and executory,” Rivera added.
Sought for comment, PAL spokesman Cielo Villaluna said “there is no existing legal prohibition on the implementation of the spinoff plan.”
She declined to disclose the implementation date and the mechanics of the spinoff.
“These are details we cannot disclose, as yet. The employees who will be covered by the spinoff have the right to be informed first,” Villaluna added.
She said meetings were slated to commence in different departments soon. These will serve as venues for discussion on the orderly implementation of the spinoff plan, separation package and the process of availing it.
PAL’s move to outsource call center, ground-handling and catering services aims to reduce cost to ensure its long- term viability.
The Lucio Tan-owned airline expects to save up to $1 billion in operating costs if it could successfully trim its workforce to about 4,000 from around 7,000 now.
Wednesday, August 24, 2011
PAL ready for possible strike
The Philippine Star
August 24, 2011
By Rudy Santos
MANILA, Philippines - Philippine Airlines (PAL) said yesterday it is ready for any threat by its labor union as Transportation and Communications Secretary Manuel Roxas III reminded PAL to prepare a contingency plan in view of a possible strike by members of the Philippine Airlines Employees Association (PALEA).
PAL spokesperson Cielo Villaluna said the national flag carrier has an existing contingency plan which will be implemented in the event of a work stoppage. Among the measures that will be taken are the following:
• Augmenting the PAL workforce by utilizing management or administrative staff;
• Utilizing the help of sister company Airphil Express;
• Tapping catering service-providers to provide food provisions for our flights; and
• Seeking help from PAL’s interline partners.
“We believe that a strike should be the last thing on the minds of the workers affected by the spin-off. As Malacañang has pointed out, soon after the release of its decision regarding PAL’s spin off plan, the ground workers union should resort to legal remedies available to them.” Villaluna said.
PAL said it will commence a company-wide information drive about the spin-off program after its workers’ union rejected management’s offer for a dialog.
In a statement, the airline management said PAL employees deserve to know the real score about Malacañang’s recent order upholding PAL’s spin off program and how it directly affects their future.
“It’s unfortunate that the union rejected management’s calls for sober and professional discussions on how best to implement the spin-off plan, including the transition process. The dialog would have helped thresh out many questions and uncertainties on their members’ minds,” Villaluna said.
Villaluna added that PAL spin-off plan has been upheld as legal and valid, not once but four times, twice by the Department of Labor and Employment and twice by Malacañang. It has been ruled upon as a legal and valid exercise of management prerogative.
August 24, 2011
By Rudy Santos
MANILA, Philippines - Philippine Airlines (PAL) said yesterday it is ready for any threat by its labor union as Transportation and Communications Secretary Manuel Roxas III reminded PAL to prepare a contingency plan in view of a possible strike by members of the Philippine Airlines Employees Association (PALEA).
PAL spokesperson Cielo Villaluna said the national flag carrier has an existing contingency plan which will be implemented in the event of a work stoppage. Among the measures that will be taken are the following:
• Augmenting the PAL workforce by utilizing management or administrative staff;
• Utilizing the help of sister company Airphil Express;
• Tapping catering service-providers to provide food provisions for our flights; and
• Seeking help from PAL’s interline partners.
“We believe that a strike should be the last thing on the minds of the workers affected by the spin-off. As Malacañang has pointed out, soon after the release of its decision regarding PAL’s spin off plan, the ground workers union should resort to legal remedies available to them.” Villaluna said.
PAL said it will commence a company-wide information drive about the spin-off program after its workers’ union rejected management’s offer for a dialog.
In a statement, the airline management said PAL employees deserve to know the real score about Malacañang’s recent order upholding PAL’s spin off program and how it directly affects their future.
“It’s unfortunate that the union rejected management’s calls for sober and professional discussions on how best to implement the spin-off plan, including the transition process. The dialog would have helped thresh out many questions and uncertainties on their members’ minds,” Villaluna said.
Villaluna added that PAL spin-off plan has been upheld as legal and valid, not once but four times, twice by the Department of Labor and Employment and twice by Malacañang. It has been ruled upon as a legal and valid exercise of management prerogative.
Tuesday, August 23, 2011
PAL emergency plan up
Manila Standard Today
by Jeremiah F. de Guzman
The Transportation Department ordered flag carrier Philippine Airlines to put contingency measures in place to prevent disruption in its operation amid strike threats from its ground crew.
“With or without strike, the contingency plan should be in place, ready to be deployed at moment’s notice,” Transportation Secretary Manuel Roxas said in a statement Monday.
He said while the dispute between PAL’s management and employees fell under the jurisdiction of the Labor Department, Transportation would intervene to protect the public’s interest if the PAL Employees’ Association made good its threat.
Malacañang last week affirmed the Labor Department’s earlier decision to allow PAL to outsource its catering, call center and ground-handling services to third parties. The plan will affect over 2,600 employees, but will save PAL billions in operating costs.
Palea rejected management’s invitation for a dialogue and instead held a protest motorcade on Monday, saying the move would serve as the union’s “last line of defense against contractualization.”
“We understand that the labor dispute presents a difficult problem both for PAL and Palea, but it should not stand in the way of PAL’s commitment to serve the public,” Roxas said.
He said PAL should consider augmenting workforce from sister companies such as AirPhil Express.
The transport chief added other local airlines should assist PAL in case the work stoppage paralyzed its operations.
“In this situation, it is no longer a matter of one airline competing against each other. Disruption will not just put PAL in a bad light, but the entire Philippine air travel as well. Business rivalries end where duty to the public begins,” Roxas said.
PAL said it had prepared a comprehensive contingency plan in case the union pursued work stoppage.
“PAL has had contingency plan in place for more than a year now amid ongoing labor dispute with PAL union,” PAL spokesman Cielo Villaluna said.
She said the carrier was ready to deploy management staff to fill the ground workers’ posts. PAL earlier said it would transfer passengers to PAL’s 134 partner airlines in case of flight disruptions.
“Ideally, what we want is a smooth implementation of these outsourcing plan,” Villaluna said.
“Amid these strike threats, we would like to assure the public that we have contingency measures in place,” she said.
by Jeremiah F. de Guzman
The Transportation Department ordered flag carrier Philippine Airlines to put contingency measures in place to prevent disruption in its operation amid strike threats from its ground crew.
“With or without strike, the contingency plan should be in place, ready to be deployed at moment’s notice,” Transportation Secretary Manuel Roxas said in a statement Monday.
He said while the dispute between PAL’s management and employees fell under the jurisdiction of the Labor Department, Transportation would intervene to protect the public’s interest if the PAL Employees’ Association made good its threat.
Malacañang last week affirmed the Labor Department’s earlier decision to allow PAL to outsource its catering, call center and ground-handling services to third parties. The plan will affect over 2,600 employees, but will save PAL billions in operating costs.
Palea rejected management’s invitation for a dialogue and instead held a protest motorcade on Monday, saying the move would serve as the union’s “last line of defense against contractualization.”
“We understand that the labor dispute presents a difficult problem both for PAL and Palea, but it should not stand in the way of PAL’s commitment to serve the public,” Roxas said.
He said PAL should consider augmenting workforce from sister companies such as AirPhil Express.
The transport chief added other local airlines should assist PAL in case the work stoppage paralyzed its operations.
“In this situation, it is no longer a matter of one airline competing against each other. Disruption will not just put PAL in a bad light, but the entire Philippine air travel as well. Business rivalries end where duty to the public begins,” Roxas said.
PAL said it had prepared a comprehensive contingency plan in case the union pursued work stoppage.
“PAL has had contingency plan in place for more than a year now amid ongoing labor dispute with PAL union,” PAL spokesman Cielo Villaluna said.
She said the carrier was ready to deploy management staff to fill the ground workers’ posts. PAL earlier said it would transfer passengers to PAL’s 134 partner airlines in case of flight disruptions.
“Ideally, what we want is a smooth implementation of these outsourcing plan,” Villaluna said.
“Amid these strike threats, we would like to assure the public that we have contingency measures in place,” she said.
Monday, August 22, 2011
Palace appeals to PAL workers not to go on strike
By Aurea Calica (The Philippine Star)
MANILA, Philippines - Malacañang has appealed to the Philippine Airlines Employees’ Association (PALEA) not to go on strike and instead go through the proper legal processes to settle their dispute with the national flag carrier.
Presidential Spokesman Edwin Lacierda said in a press briefing in Malacañang the PALEA was planning to elevate their case before the Court of Appeals as the Office of the President had upheld its decision allowing PAL to outsource some of its services, which would lead to the termination of more than 2,000 employees.
“We would like to appeal to them not to jeopardize the riding public. A lot of people are depending on Philippine Airlines so we hope the riding public will not be inconvenienced with their conflict with Philippine Airlines,” Lacierda said.
“Let’s have the courts decide the matter and in the meantime let’s not jeopardize the riding public,” he said.
The Office of the President has upheld the legality of PAL’s plan to cut 2,600 jobs to reduce costs despite the company’s recent return to profitability.
In a two-page decision signed by Executive Secretary Paquito Ochoa Jr., Malacañang upheld the legality of PAL’s planned closure of three non-core departments, and subcontracting these services out to third-party providers.
The decision noted that PALEA had failed to raise new points to convince the OP to overturn its previous decision, which was an affirmation of a ruling made by Labor Secretary Rosalinda Baldoz.
The Palace decision said the government “took into account the national interest involved and the interest of labor,” adding that it took a “fresh look and reviewed its findings.” But the Palace said it found nothing “erroneous and unlawful in the aforementioned decision.”
PALEA on Thursday announced plans to file an appeal before the CA as it criticized the Palace’s decision, calling the decision PNoy’s “fire-all-you-can” policy.
PALEA said the OP turned a blind eye to the fact that PAL’s robust financial health belied the latter’s argument that outsourcing was necessary for the flag carrier to survive.
Following the Malacañang announcement, PAL said it would invite PALEA leaders to a dialogue and plan a smooth transition for the spin-off program. However, the labor union snubbed the dialogue with management.
MANILA, Philippines - Malacañang has appealed to the Philippine Airlines Employees’ Association (PALEA) not to go on strike and instead go through the proper legal processes to settle their dispute with the national flag carrier.
Presidential Spokesman Edwin Lacierda said in a press briefing in Malacañang the PALEA was planning to elevate their case before the Court of Appeals as the Office of the President had upheld its decision allowing PAL to outsource some of its services, which would lead to the termination of more than 2,000 employees.
“We would like to appeal to them not to jeopardize the riding public. A lot of people are depending on Philippine Airlines so we hope the riding public will not be inconvenienced with their conflict with Philippine Airlines,” Lacierda said.
“Let’s have the courts decide the matter and in the meantime let’s not jeopardize the riding public,” he said.
The Office of the President has upheld the legality of PAL’s plan to cut 2,600 jobs to reduce costs despite the company’s recent return to profitability.
In a two-page decision signed by Executive Secretary Paquito Ochoa Jr., Malacañang upheld the legality of PAL’s planned closure of three non-core departments, and subcontracting these services out to third-party providers.
The decision noted that PALEA had failed to raise new points to convince the OP to overturn its previous decision, which was an affirmation of a ruling made by Labor Secretary Rosalinda Baldoz.
The Palace decision said the government “took into account the national interest involved and the interest of labor,” adding that it took a “fresh look and reviewed its findings.” But the Palace said it found nothing “erroneous and unlawful in the aforementioned decision.”
PALEA on Thursday announced plans to file an appeal before the CA as it criticized the Palace’s decision, calling the decision PNoy’s “fire-all-you-can” policy.
PALEA said the OP turned a blind eye to the fact that PAL’s robust financial health belied the latter’s argument that outsourcing was necessary for the flag carrier to survive.
Following the Malacañang announcement, PAL said it would invite PALEA leaders to a dialogue and plan a smooth transition for the spin-off program. However, the labor union snubbed the dialogue with management.
Friday, August 19, 2011
PAL cuts fares for Japan evacuees by 30%
Manila Bulletin
April 19, 2011
MANILA, Philippines – To help Filipinos whom the Japanese government are forcing to evacuate from the leaking nuclear reactors at the Fukushima Prefecture, Philippine Airlines (PAL) slashed its fares by more than 30 percent on inbound flights from Narita, Japan, from $500 to about $335 one-way, from Narita to Manila or Narita-Cebu, for a limited time.
PAL Chairman and CEO Lucio C. Tan has ordered the issuance of discounted tickets to help those who have to evacuate due to high radiation levels in the area.
However, only Filipino evacuees facing involuntary evacuation from areas within the danger zone declared by Japanese authorities can avail of the ‘all-in’ discounted tickets (excluding Japanese taxes/fees), PAL stressed.
Filipino evacuees are advised to coordinate with the Philippine Embassy in Japan which is in charge of overseeing the repatriation.
Regular passengers, on the other hand, may purchase their tickets through the PAL sales office in Narita Airport, PAL ticket offices in downtown Tokyo, other PAL offices in Osaka, Fukuoka and Nagoya, accredited travel agents in Japan or the PAL website.
PAL said the latest airlift assistance is the company’s modest contribution to the Philippine government who is in charge of repatriating Filipino victims of the earthquake, tsunami and radiation leaks from a crippled nuclear reactor in Northern Japan.
The company said the reduced fares are just enough to recover actual cost of operating the flights, such as jet fuel, landing and parking fees, crew salaries, other airport fees, among others.
A few weeks ago, PAL started shipping thousands of bottled water to Japan. Donated by Asia Brewery, Inc., another Tan-owned company. The drinking water was coursed through the Tokyo Metropolitan Government. A total of 700,000 bottles of distilled water were shipped for free by PAL to help calamity victims. (EVA)
April 19, 2011
MANILA, Philippines – To help Filipinos whom the Japanese government are forcing to evacuate from the leaking nuclear reactors at the Fukushima Prefecture, Philippine Airlines (PAL) slashed its fares by more than 30 percent on inbound flights from Narita, Japan, from $500 to about $335 one-way, from Narita to Manila or Narita-Cebu, for a limited time.
PAL Chairman and CEO Lucio C. Tan has ordered the issuance of discounted tickets to help those who have to evacuate due to high radiation levels in the area.
However, only Filipino evacuees facing involuntary evacuation from areas within the danger zone declared by Japanese authorities can avail of the ‘all-in’ discounted tickets (excluding Japanese taxes/fees), PAL stressed.
Filipino evacuees are advised to coordinate with the Philippine Embassy in Japan which is in charge of overseeing the repatriation.
Regular passengers, on the other hand, may purchase their tickets through the PAL sales office in Narita Airport, PAL ticket offices in downtown Tokyo, other PAL offices in Osaka, Fukuoka and Nagoya, accredited travel agents in Japan or the PAL website.
PAL said the latest airlift assistance is the company’s modest contribution to the Philippine government who is in charge of repatriating Filipino victims of the earthquake, tsunami and radiation leaks from a crippled nuclear reactor in Northern Japan.
The company said the reduced fares are just enough to recover actual cost of operating the flights, such as jet fuel, landing and parking fees, crew salaries, other airport fees, among others.
A few weeks ago, PAL started shipping thousands of bottled water to Japan. Donated by Asia Brewery, Inc., another Tan-owned company. The drinking water was coursed through the Tokyo Metropolitan Government. A total of 700,000 bottles of distilled water were shipped for free by PAL to help calamity victims. (EVA)
PAL plans $200-M loan to upgrade fleet
Manila Bulletin
April 19, 2011
By Lee C. Chipongian
MANILA, Philippines – Flag carrier Philippine Airlines (PAL) plans to raise up to $200 million or P8.5 billion via a syndicated loan this year to partly fund its ongoing re-fleeting program, central bank sources said.
The Lucio Tan-owned PAL has informed the Bangko Sentral ng Pilipinas (BSP) of its borrowing plans to finance the acquisition of new fleet. The syndicated loan with banks will partly fund the airline's ongoing expansion program which started in 2009 and will include purchases until 2013.
Sources said with the loan, PAL will purchase one 370-passenger, long-range Boeing 777-300ER jet aircraft which will be delivered by June next year. The plane costs about $284 million.
According to earlier reports, PAL signed a deal with Boeing in 2006 for a re-fleeting program and bought two Boeing 777-300ER aircraft in 2009 for its Manila-US and Manila-Canada routes/flights plus two more planes for delivery this year and in 2012. The first Boeing was purchased in 2009. The two-engine long-haul plane has 42 fully flat business class seats and 328 economy class seats.
A reported disclosure to the Securities and Exchange Commission said PAL posted an income growth in the third quarter last year of $15.1 million, reversing a loss recorded in the same period in 2009.
PAL President Jaime J. Bautista was quoted as saying he was still cautiously optimistic about income growth this year. In 2010, the airline was able to manage costs despite jet fuel price hikes and labor issues because of a significant reduction in maintenance expenses. Expenditures were reduced by 36 percent in the first half of 2010 alone. Fuel expenses account for 40 percent of PAL's budget.
PAL, the oldest airline in the region, has a current fleet of 36 aircraft, including two Boeing 777-300ER, five 433-passenger Boeing 747-400, and four 264-passenger Airbus A340-300. It serves 19 local destinations and 24 destinations in Southeast Asia, Middle East, Oceania, East Asia and North America.
The BSP regulates foreign loans of both the public and private sectors and imposes a ceiling or cap for foreign borrowings every year. Corporations regularly inform the BSP of its foreign loan program whether they intend to source the foreign exchange locally or not, or even if they do not intend to register the transactions with the central bank.
April 19, 2011
By Lee C. Chipongian
MANILA, Philippines – Flag carrier Philippine Airlines (PAL) plans to raise up to $200 million or P8.5 billion via a syndicated loan this year to partly fund its ongoing re-fleeting program, central bank sources said.
The Lucio Tan-owned PAL has informed the Bangko Sentral ng Pilipinas (BSP) of its borrowing plans to finance the acquisition of new fleet. The syndicated loan with banks will partly fund the airline's ongoing expansion program which started in 2009 and will include purchases until 2013.
Sources said with the loan, PAL will purchase one 370-passenger, long-range Boeing 777-300ER jet aircraft which will be delivered by June next year. The plane costs about $284 million.
According to earlier reports, PAL signed a deal with Boeing in 2006 for a re-fleeting program and bought two Boeing 777-300ER aircraft in 2009 for its Manila-US and Manila-Canada routes/flights plus two more planes for delivery this year and in 2012. The first Boeing was purchased in 2009. The two-engine long-haul plane has 42 fully flat business class seats and 328 economy class seats.
A reported disclosure to the Securities and Exchange Commission said PAL posted an income growth in the third quarter last year of $15.1 million, reversing a loss recorded in the same period in 2009.
PAL President Jaime J. Bautista was quoted as saying he was still cautiously optimistic about income growth this year. In 2010, the airline was able to manage costs despite jet fuel price hikes and labor issues because of a significant reduction in maintenance expenses. Expenditures were reduced by 36 percent in the first half of 2010 alone. Fuel expenses account for 40 percent of PAL's budget.
PAL, the oldest airline in the region, has a current fleet of 36 aircraft, including two Boeing 777-300ER, five 433-passenger Boeing 747-400, and four 264-passenger Airbus A340-300. It serves 19 local destinations and 24 destinations in Southeast Asia, Middle East, Oceania, East Asia and North America.
The BSP regulates foreign loans of both the public and private sectors and imposes a ceiling or cap for foreign borrowings every year. Corporations regularly inform the BSP of its foreign loan program whether they intend to source the foreign exchange locally or not, or even if they do not intend to register the transactions with the central bank.
PAL incurs $10.6-M quarterly loss
Manila Bulletin
August 19, 2011
By Emmie V. Abadilla
MANILA, Philippines — Soaring fuel prices, political turmoil in the Middle East and North Africa, along with natural calamities like Japan’s earthquake and tsunami, pulled Philippine Airlines (PAL) back in the red, losing US$10.6 million for the first quarter (April to June) of its current fiscal year 2011-2012.
The flag carrier was already in the black in the same period in 2010, earning US$31.6 million.
Overall, operating revenues improved by US$25.6 million or 6% to US$454.1 million for the period April to June 2011, PAL disclosed to the Securities and Exchange Commission.
However, while the airline reported a 9% improvement in passenger yields in its first quarter operations, sluggish demand resulted in a 7% decline in passenger traffic.
Operating expenses, on the other hand, escalated to US$464.7 million, up by US$71.3 million or 18% compared to the same period year.
Jet fuel costs alone, which is the airline’s biggest expense item amounted to US$210.8 million up by US$56.2 million or 36% from the year ago level of US$154.6 million.
Aviation fuel prices increased from an average of US$100.47 per barrel for the period April to June 2010 to USD 138.11 per barrel for the same period in 2011.
The International Air Transport Association (IATA), of which PAL is a member, expects a net industry margin of only 0.7% this year as rising jet fuel prices exert much pressure on the bottomline of its member airlines.
The ability of airlines to recoup this cost is critical to staying in the black this year and slower economic growth is making these challenges all the more difficult, according to the global association.
August 19, 2011
By Emmie V. Abadilla
MANILA, Philippines — Soaring fuel prices, political turmoil in the Middle East and North Africa, along with natural calamities like Japan’s earthquake and tsunami, pulled Philippine Airlines (PAL) back in the red, losing US$10.6 million for the first quarter (April to June) of its current fiscal year 2011-2012.
The flag carrier was already in the black in the same period in 2010, earning US$31.6 million.
Overall, operating revenues improved by US$25.6 million or 6% to US$454.1 million for the period April to June 2011, PAL disclosed to the Securities and Exchange Commission.
However, while the airline reported a 9% improvement in passenger yields in its first quarter operations, sluggish demand resulted in a 7% decline in passenger traffic.
Operating expenses, on the other hand, escalated to US$464.7 million, up by US$71.3 million or 18% compared to the same period year.
Jet fuel costs alone, which is the airline’s biggest expense item amounted to US$210.8 million up by US$56.2 million or 36% from the year ago level of US$154.6 million.
Aviation fuel prices increased from an average of US$100.47 per barrel for the period April to June 2010 to USD 138.11 per barrel for the same period in 2011.
The International Air Transport Association (IATA), of which PAL is a member, expects a net industry margin of only 0.7% this year as rising jet fuel prices exert much pressure on the bottomline of its member airlines.
The ability of airlines to recoup this cost is critical to staying in the black this year and slower economic growth is making these challenges all the more difficult, according to the global association.
PAL seeking dialogue with union
Manila Bulletin
August 19, 2011
By Samuel P. Medenilla
MANILA, Philippines — Amid the recent decision from the Office the President (OP) favoring the outsourcing of its three non-core departments, Philippine Airlines (PAL) said Thursday it is seeking for a dialogue with its ground-base labor union before it implements the spin-off.
PAL spokesperson Cielo Villanueva said in a statement that PAL management is currently offering to meet with the representatives of the Philippine Airlines Employees Association (PALEA) as a sign of good faith.
“Philippine Airlines (PAL) said it would invite leaders of the PAL Employees Association (PALEA) for a dialogue to discuss the smooth and orderly implementation of the spin-off program,” Villanueva said.
“The PAL management also plans to hold town hall meetings in the affected departments to discuss the mechanics of the spin-off,” she added.
About 2,600 PAL employees are said to be affected by the planned outsourcing of its catering, call center, and ground handling departments so it could recover from its $312 million losses in 2009.
PALEA earlier filed a petition at the Department of Labor and Employment (DoLE) and later at the OP for the dismissal of the outsourcing plan, but both offices later upheld its legality.
Villanueva said PAL has already allocated P2.5 billion of separation packages and employment from its contractors for those who will be affected by the spin-off in accordance with DoLE’s ruling on the case.
She said some of the workers have already shown interest to avail of the packages,
Meanwhile, PALEA President Gerardo Rivera slammed the decision from the OP, which he claimed neglected to take into consideration the $72.5-M profit from PAL last year.
August 19, 2011
By Samuel P. Medenilla
MANILA, Philippines — Amid the recent decision from the Office the President (OP) favoring the outsourcing of its three non-core departments, Philippine Airlines (PAL) said Thursday it is seeking for a dialogue with its ground-base labor union before it implements the spin-off.
PAL spokesperson Cielo Villanueva said in a statement that PAL management is currently offering to meet with the representatives of the Philippine Airlines Employees Association (PALEA) as a sign of good faith.
“Philippine Airlines (PAL) said it would invite leaders of the PAL Employees Association (PALEA) for a dialogue to discuss the smooth and orderly implementation of the spin-off program,” Villanueva said.
“The PAL management also plans to hold town hall meetings in the affected departments to discuss the mechanics of the spin-off,” she added.
About 2,600 PAL employees are said to be affected by the planned outsourcing of its catering, call center, and ground handling departments so it could recover from its $312 million losses in 2009.
PALEA earlier filed a petition at the Department of Labor and Employment (DoLE) and later at the OP for the dismissal of the outsourcing plan, but both offices later upheld its legality.
Villanueva said PAL has already allocated P2.5 billion of separation packages and employment from its contractors for those who will be affected by the spin-off in accordance with DoLE’s ruling on the case.
She said some of the workers have already shown interest to avail of the packages,
Meanwhile, PALEA President Gerardo Rivera slammed the decision from the OP, which he claimed neglected to take into consideration the $72.5-M profit from PAL last year.
PAL offers help in Syrian repatriation
Manila Standard Today
August 19, 2011
PHILIPPINE Airlines has offered to help the government bring home some 17,000 Filipinos workers trapped in strife-torn Syria, an official said Thursday.
Airline president Jaime Bautista made the offer through a letter to President Benigno Aquino III, presidential spokesman Edwin Lacierda said.
“PAL is ready to coordinate with the government to map out repatriation efforts,” Lacierda said. He noted that the airline also helped to fly home Filipinos in Libya a few months back.
The government has raised the alert to Level 3 in Syria, marking the start of the voluntary repatriation of Filipinos there of whom 95 percent are domestics.
The Philippine Embassy in Damascus is required to obtain the consent of the employers in Syria before the Filipinos can be given exit visas.
The Philippines has rejected calls from the United States to cut political and economic ties with Syria over the harsh crackdown by the regime of President Bashar al-Assad on anti-government forces.
In Washington, US officials said the Obama administration was ready to make an explicit call for Assad to leave power and has notified Arab and European allies that an announcement was imminent.
The timing was still in flux, but preparations were in place for the White House to issue a statement Thursday demanding that Assad step down, the officials said.
This would be accompanied by an announcement of new sanctions on the Assad regime and followed by an on-camera appearance by Secretary of State Hillary Rodham Clinton to reinforce the US position, the officials said. AP
August 19, 2011
PHILIPPINE Airlines has offered to help the government bring home some 17,000 Filipinos workers trapped in strife-torn Syria, an official said Thursday.
Airline president Jaime Bautista made the offer through a letter to President Benigno Aquino III, presidential spokesman Edwin Lacierda said.
“PAL is ready to coordinate with the government to map out repatriation efforts,” Lacierda said. He noted that the airline also helped to fly home Filipinos in Libya a few months back.
The government has raised the alert to Level 3 in Syria, marking the start of the voluntary repatriation of Filipinos there of whom 95 percent are domestics.
The Philippine Embassy in Damascus is required to obtain the consent of the employers in Syria before the Filipinos can be given exit visas.
The Philippines has rejected calls from the United States to cut political and economic ties with Syria over the harsh crackdown by the regime of President Bashar al-Assad on anti-government forces.
In Washington, US officials said the Obama administration was ready to make an explicit call for Assad to leave power and has notified Arab and European allies that an announcement was imminent.
The timing was still in flux, but preparations were in place for the White House to issue a statement Thursday demanding that Assad step down, the officials said.
This would be accompanied by an announcement of new sanctions on the Assad regime and followed by an on-camera appearance by Secretary of State Hillary Rodham Clinton to reinforce the US position, the officials said. AP
Thursday, August 18, 2011
Palace upholds Philippine Airlines in spinoff
Philippine Daily Inquirer
August 18, 2011
By Paolo G. Montecillo
The Office of the President (OP) has upheld the legality of Philippine Airlines’ (PAL) plan to cut 2,600 jobs to reduce costs despite the company’s recent return to profitability.
In a two-page decision signed by Executive Secretary Paquito Ochoa, Malacañang upheld the legality of PAL’s planned closure of three noncore departments, and subcontracting these services out to third-party providers.
The decision noted that the airline’s labor union, PAL Employees’ Association (Palea), had failed to raise new points to convince the OP to overturn its previous decision, which was an affirmation of a ruling made by Labor Secretary Rosalinda Baldoz.
‘Fresh look’
“Clearly… the points raised by Palea in its motion for reconsideration are a mere rehash of those considered, discussed and ruled upon by the Secretary of Labor in her order dated October 29 and affirmed in our decision dated March 25,” the decision read.
The Palace decision said the government “took into account the national interest involved and the interest of labor,” adding that it took a “fresh look and reviewed its findings.” But the Palace said it found nothing “erroneous and unlawful in the aforementioned decision.”
PAL vice president for corporate communications Joey de Guzman declined to comment on the decision, saying the company has yet to receive its official copy of the decision.
Palea officials could not be reached for comment.
PAL’s plan to outsource three departments, namely its call center, in-flight catering and airport services, will affect an estimated 2,600 employees. PAL currently has around 7,000 workers.
Palea earlier threatened to go on strike to protest the job cuts, but the government ordered the union to drop its planned work stoppage because air travel was an industry “imbued with public interest.”
In its petition before the OP, Palea argued that its collective bargaining agreement (CBA) with the airline’s management explicitly prohibits the contracting out of services performed by regular employees.
Palea likewise said the outsourcing was a ploy intended to dissolve the labor union and evade CBA negotiations.
“The intended closure of three departments, despite PAL’s profitable business violates the workers’ rights under a valid CBA, therefore negating PAL’s good faith in implementing the mass termination,” it said.
In a separate statement on Wednesday, PAL said it posted a net loss of $10.6 million for its first quarter of April to June due to high fuel prices, the political unrest in the Middle East and the disaster in Japan.
“The flag carrier attributes the slide to modest revenue growth, eroded by significant increases in fuel prices and other factors like political turmoil in the Middle East and North Africa, and natural calamities like the Japan earthquake and tsunami,” PAL said.
Last month, PAL reported a $72.5-million net income for the fiscal year ending March. The company earlier cited its massive losses in previous years to justify its planned job outsourcing.
August 18, 2011
By Paolo G. Montecillo
The Office of the President (OP) has upheld the legality of Philippine Airlines’ (PAL) plan to cut 2,600 jobs to reduce costs despite the company’s recent return to profitability.
In a two-page decision signed by Executive Secretary Paquito Ochoa, Malacañang upheld the legality of PAL’s planned closure of three noncore departments, and subcontracting these services out to third-party providers.
The decision noted that the airline’s labor union, PAL Employees’ Association (Palea), had failed to raise new points to convince the OP to overturn its previous decision, which was an affirmation of a ruling made by Labor Secretary Rosalinda Baldoz.
‘Fresh look’
“Clearly… the points raised by Palea in its motion for reconsideration are a mere rehash of those considered, discussed and ruled upon by the Secretary of Labor in her order dated October 29 and affirmed in our decision dated March 25,” the decision read.
The Palace decision said the government “took into account the national interest involved and the interest of labor,” adding that it took a “fresh look and reviewed its findings.” But the Palace said it found nothing “erroneous and unlawful in the aforementioned decision.”
PAL vice president for corporate communications Joey de Guzman declined to comment on the decision, saying the company has yet to receive its official copy of the decision.
Palea officials could not be reached for comment.
PAL’s plan to outsource three departments, namely its call center, in-flight catering and airport services, will affect an estimated 2,600 employees. PAL currently has around 7,000 workers.
Palea earlier threatened to go on strike to protest the job cuts, but the government ordered the union to drop its planned work stoppage because air travel was an industry “imbued with public interest.”
In its petition before the OP, Palea argued that its collective bargaining agreement (CBA) with the airline’s management explicitly prohibits the contracting out of services performed by regular employees.
Palea likewise said the outsourcing was a ploy intended to dissolve the labor union and evade CBA negotiations.
“The intended closure of three departments, despite PAL’s profitable business violates the workers’ rights under a valid CBA, therefore negating PAL’s good faith in implementing the mass termination,” it said.
In a separate statement on Wednesday, PAL said it posted a net loss of $10.6 million for its first quarter of April to June due to high fuel prices, the political unrest in the Middle East and the disaster in Japan.
“The flag carrier attributes the slide to modest revenue growth, eroded by significant increases in fuel prices and other factors like political turmoil in the Middle East and North Africa, and natural calamities like the Japan earthquake and tsunami,” PAL said.
Last month, PAL reported a $72.5-million net income for the fiscal year ending March. The company earlier cited its massive losses in previous years to justify its planned job outsourcing.
Malacanang affirms PAL outsourcing plan
The Philippine Star
August 18, 2011
MANILA, Philippines (UPDATE) - Malacanang has allowed Lucio Tan-led Philippine Airlines to spin-off its non-core units after junking pleas from the firm’s ground crew union.
In an August 11 resolution obtained from the Office of the President, Executive Secretary Paquito Ochoa Jr. said “the points raised by petition in its motion for reconsideration are a mere rehash of those considered, discussed and ruled upon by the Secretary of Labor…and affirmed in our [original] decision.”
Both management and labor union have been at odds since last year over the company's plans to spin off 3 non-core units that would result in job losses for 2,600 union members.
This has been the subject of a strike vote by the Philippines Airlines Employees Association (PALEA). Further protest actions were postponed pending a final decision on the matter.
Ochoa affirmed his March 25 decision, saying PAL’s actions will consequently lead to the retrenchment of regular employees and union members.
Nonetheless, “PAL is not liable of unfair labor practices,” he said.
He said the Office of the President took note of PALEA’s motion for reconsideration for national interest purposes.
“We took a fresh look thereat and reviewed our findings, but found nothing erroneous and unlawful in the aforementioned decision,” he stressed.
In a text message, PALEA President Gerry Rivera said, “we received a copy of the decision by registered mail today…We will file a petition before the Court of Appeals.”
He said the union will also pursue protest actions.
August 18, 2011
MANILA, Philippines (UPDATE) - Malacanang has allowed Lucio Tan-led Philippine Airlines to spin-off its non-core units after junking pleas from the firm’s ground crew union.
In an August 11 resolution obtained from the Office of the President, Executive Secretary Paquito Ochoa Jr. said “the points raised by petition in its motion for reconsideration are a mere rehash of those considered, discussed and ruled upon by the Secretary of Labor…and affirmed in our [original] decision.”
Both management and labor union have been at odds since last year over the company's plans to spin off 3 non-core units that would result in job losses for 2,600 union members.
This has been the subject of a strike vote by the Philippines Airlines Employees Association (PALEA). Further protest actions were postponed pending a final decision on the matter.
Ochoa affirmed his March 25 decision, saying PAL’s actions will consequently lead to the retrenchment of regular employees and union members.
Nonetheless, “PAL is not liable of unfair labor practices,” he said.
He said the Office of the President took note of PALEA’s motion for reconsideration for national interest purposes.
“We took a fresh look thereat and reviewed our findings, but found nothing erroneous and unlawful in the aforementioned decision,” he stressed.
In a text message, PALEA President Gerry Rivera said, “we received a copy of the decision by registered mail today…We will file a petition before the Court of Appeals.”
He said the union will also pursue protest actions.
PAL books $10.6-m loss on increased crude prices
Manila Standard Today
August 18, 2011
By Jeremiah F. de Guzman
Philippine Airlines said Wednesday it posted a loss of $10.6 million in the quarter ending June this year due to skyrocketing fuel prices and the political turmoil in foreign markets where it has a strong presence.
The loss in the period, which is the first quarter of its fiscal year, was a reversal from the profit of $31.6 million it posted year-on-year.
Operating revenues improved 6 percent to $454.1 million from $428.5 million a year ago, despite a 7-percent decline in passenger traffic.
“The higher yields means PAL sold tickets at higher prices in destinations where there is great demand,” PAL spokesman Cielo Villaluna said Wednesday.
The carrier said problems in the Middle East, North America and Japan from April to June brought down demand for travel during the period.
PAL said the slight boost in revenues failed to offset the 18-percent climb in operating expense to $464.7 million.
Fuel cost, which comprised 45 percent of total operating expenses, rose 36 percent to $210.8 million. Jet fuel prices climbed from an average of $100.47 in April to June 2010 to $138.11 per barrel this year.
August 18, 2011
By Jeremiah F. de Guzman
Philippine Airlines said Wednesday it posted a loss of $10.6 million in the quarter ending June this year due to skyrocketing fuel prices and the political turmoil in foreign markets where it has a strong presence.
The loss in the period, which is the first quarter of its fiscal year, was a reversal from the profit of $31.6 million it posted year-on-year.
Operating revenues improved 6 percent to $454.1 million from $428.5 million a year ago, despite a 7-percent decline in passenger traffic.
“The higher yields means PAL sold tickets at higher prices in destinations where there is great demand,” PAL spokesman Cielo Villaluna said Wednesday.
The carrier said problems in the Middle East, North America and Japan from April to June brought down demand for travel during the period.
PAL said the slight boost in revenues failed to offset the 18-percent climb in operating expense to $464.7 million.
Fuel cost, which comprised 45 percent of total operating expenses, rose 36 percent to $210.8 million. Jet fuel prices climbed from an average of $100.47 in April to June 2010 to $138.11 per barrel this year.
Thursday, August 4, 2011
DOLE warns PALEA against illegal strike
Malaya Business Insight
By Gerard Anthony M. Naval
Labor Secretary Rosalinda Baldoz yesterday staging a strike is the call of the Philippine Airlines Employees Association (PALEA) but members should be ready for the consequences of defying her no-strike, no-lockout order issued on Friday.
"What we provided through the order is a peaceful and orderly way of settling their dispute and also our way of protecting the interest of the riding public, which should be the concern of all," Baldoz said.
In her order, Baldoz cited national interest in sending the case to the National Labor Relations Commission for compulsory arbitration.
Last Saturday, PALEA president Gerry Rivera said the union was determined to stage a strike against the flag carrier in defiance of Baldoz’ order.
An illegal strike is ground for dismissal. Strikers are also criminally liable for violation of the Labor Code.
The union voted to strike two weeks ago after President Aquino upheld a DOLE ruling that PAL is well within its right to outsource three non-core operating units.
Outsourcing will lead to the dismissal of 2,600 worker who, however, have been assured of employment without diminution of benefits by a service provider contracted by PAL.
The workers were also assured of a benefit package worth P2.5 billion.
Deputy presidential spokesman Abigail Valte said PALEA is well within its right to take its case to the International Labor Organization.
"Karapatan naman nila iyon (to take it to ILO), but again sa atin po we hope na ma-resolve na, kahit mukhang nagkakagirian iyung dalawang grupo doon sa issue. Sana po magkaroon pa rin ng magandang resolusyon kapag nag-undergo na sila ng compulsory mediation ng National Conciliation and Mediation Board," she said.
She also reminded PALEA not to proceed with its planned strike after the case has been sent to the mediation board.
"Naglabas na ng certification order si (Labor) Secretary (Rosalinda) Baldoz na hindi pupwedeng mag-strike kapag na-submit for compulsory mediation ang isang kaso. Pwedeng maging illegal iyung strike nila kapag pilit nilang gawin iyun," she added.
PALEA said it is planning to file a case against the government before the ILO for suppressing its members’ right to self-organization and collective bargaining agreement.
PALEA said it would use DOLE’s order barring the union from going on strike as evidence. – With Jocelyn Montemayor
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