Home » Aviation, Breaking News » PAL to go ahead with refleeting

Philippine Airlines (PAL) is pushing through with its refleeting plan amid a looming strike of employees due to a massive retrenchment program.

“To stay competitive our fleet of Boeing B747-400s, Airbus 340-300s, A330-300s and A320-200s need to be replaced with newer technology and more fuel efficient aircraft over the next few years as they reach the end of the economic lives,” PAL president Jaime Bautista said during the airline’s recent annual stockholders’ meeting.

Currently, PAL has 36 aircraft — five B747-400s, two B777-330 ERs, four A340-3002s, eight A330-300s, 13 A320-200s, and four A319-100s. Of the total, 21 planes are about 18 years old and nearing the end of their 20-25 year economic life.

“The refleeting will provide an avenue for bringing down unit costs and improve our ability to price more competitively and will allow an expansion in the current markets through increased frequencies as well as introducing new destinations especially in the booming Asian region,” he said.

“In the face of escalating competition, prudent capacity management is key. This will be our mantra as we seek to protect our investments and progress in the routes that we fly and add routes that will balance our risk exposure to the vagaries of economies and markets. We need to make the required investments for growth and efficiency.”

PAL will take delivery of four A320s between March and November 2012 and two B777s — one in June and the other in November.

The flag carrier is financing the refleeting program using a loan from the US Export Import Bank, sale of old assets, and a lease back option.

Meanwhile, over the weekend PAL sent termination notices to about 2,600 workers affected by its outsourcing program.

PAL is ter-minating workers from its catering, airport services and call center units by September 30 but they may opt to be employed by out-sourcing companies contracted by the carrier.

Those accepting the offer by September 9 can start work on October 1. About 400 employees signified their interest to avail of the program.

PAL is allocating P2.5 billion in severance benefits for workers of the three non-core units to be spun off. Employees will receive separation pay equivalent to 1.25 months’ salary for every year of service, P50,000 cash as gratuity pay, and other non-cash benefits.

 

Photo by ironchefbalara

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