PAL narrows losses to P1.5B, settles dispute with union


FLAG carrier Philippine Airlines posted a net loss of P1.552 billion for the first half of its financial year, a slight improvement of 4.8% from the P1.629 billion loss it recorded for the same period last year.

PAL disclosed its results on Nov. 14, the same day it resolved a two-year outsourcing row with its employees’ union by signing an agreement to re-employ 600 unionists who went on strike over the dispute.

Revenue for the six months ending September 30 declined 5.9% to P36.574 billion from P38.858 billion in the same period in the previous year.

PAL Holdings, Inc., in a filing with the Philippine Stock Exchange, said the “decrease was attributable mainly to the unfavorable passenger revenue performance as a result of lower passenger yields as well as the drop in volume of traffic flown.”

Passenger revenue, which accounted for 81.52% of the total, dipped 7.9% to P29.817 billion in April-September 2013 from P32.362 billion in the same period last year. For July-September, passenger revenue dipped 1.86% to P14.515 billion from P14.790 billion a year ago.

Contributing 7.42% of the total is cargo revenue, which eased 0.11% to P2.714 billion in April-September from P2.717 billion in the same period last year. However, for July-September, cargo revenue improved 2.8% to P1.391 billion from P1.352 billion.

Things should now look up for PAL after it signed the settlement agreement with the Philippine Airlines Employees’ Association (PALEA) under which the company will re-employ union member regular workers.
In statement, PAL said it “will start the processing of applications for re-employment of covered PALEA members.”

Union members will have to meet qualifications and hiring requirements for available job openings, said the flag carrier.

The agreement provides for an improved separation package of 200% pay per year of service and P150,000 in gratuity pay for PALEA members, Gerry Rivera, PALEA president, said in a separate statement.

Rivera said PAL committed to process the applications for re-employment of the affected PALEA members within three months.

“We thank PAL management led by President Ramon Ang for recognizing that an amicable settlement is preferable to continuing labor strife,” he said. “We hope to build on this agreement and the protection of job security it provides towards rebuilding labor-management relations in the flag carrier.”

Diversified conglomerate San Miguel Corp. (SMC), led by Ang, took over a stake in PAL owned by the LT Group of tycoon Lucio Tan this year. The new management had been in negotiations with PALEA since 2012.
In 2010, PAL’s then management shut down its airport services arm, in-flight catering and call-center reservations after these are outsourced. The dispute led to more than 2,500 employees losing jobs, triggering a two-year strike by the union in 2011.
PAL need to boost its staff as it pushes its network and fleet expansion.

The airline earlier announced 12 new international routes from Manila to Guangzhou, China; Darwin, Perth and Brisbane, Australia; Abu Dhabi; Dubai; Doha, Qatar; Riyadh, Dammam; Jeddah; and for domestic, Basco, Batanes.

PAL was also the first carrier to fly directly to Europe following the lifting of a ban by the European Union on July 12 this year. The carrier launched its return flight on Nov. 4.

PAL intends to add flights to Paris, Frankfurt, Amsterdam, Rome, and Madrid.

PAL’s fleet consists of 44 jets and will further expand with more than 60 aircraft deliveries expected until 2019. Since March 2012, PAL has taken delivery of 17 aircraft — from the ultra-modern B777-300ER and the long-range A340-300, to the single-aisle A320-200 and its latest derivative model, the A321-231.


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