Wednesday, November 10, 2010

Palace vows to deal with PAL labor woes; airline needs P2.5B


                                   PHILIPPINES AVIATION NEWS

MALACAÑANG IS looking for short- and long-term solutions on Philippine Airlines’ (PAL) string of labor woes, a Palace official said, with President Benigno S. C. Aquino III reviewing the Labor department’s recent affirmation of the carrier’s plan to outsource three units which would result in the layoff of some 2,600 workers.

Ricky A. Carandang, Presidential Communications Development and Strategic Planning secretary, said in an interview the Palace has a keen interest on PAL’s labor issues as these would have an impact on the public.

“This could lead to some kind of policy with regard to liberalization,” Mr. Carandang said.

Economic managers last month submitted to the President a memorandum recommending the full implementation of the civil aviation liberalization policy which could ease up the process for qualified foreign airlines wanting to expand operations in the Philippines.

“Therefore we’re not keeping our hands off. We’re reviewing the case very carefully and as the President said, once the case is reviewed then he will decide what the best intervention will be,” said Mr. Carandang.

Conciliation meetings between the management and the Philippine Airlines Employees’ Association (PALEA) will start today after the union filed a notice of strike with the National Conciliation and Mediation Board (NCMB) under the Labor department last Friday.

In a statement on Saturday, PALEA said it filed the notice of strike due to the “widespread and persistent attempts by management to convince union members, which by law is individual bargaining and constitute interference in the right to self-organization.”

“We cited unfair labor practice as ground. The specifics of the unfair labor practice are individual bargaining with union members which is tantamount to interference with, restraint, and coercion of employees in the exercise of their right to self-organization, and mass termination of union officers amounting to union busting,” PALEA President Gerardo F. Rivera said.

After filing the notice of strike, the next step in the process is for PALEA to conduct a strike vote among its members.

PAL management said on Saturday the filing of notice of strike was “just a union strategy to delay implementation of PAL’s spin-off program.”

“There is no reason for our passengers to be alarmed. A strike is not likely to happen anytime soon as the DoLE (Department of Labor and Employment) views PAL’s continued operations as imbued with national interest,” PAL spokeswoman Cielo C. Villaluna said.

“We categorically deny ‘directly negotiating’ with union members, as claimed by PALEA, inasmuch as management regularly conducts consultative talks only with PALEA officials and not with the members,” she added.

PAL, meanwhile, will borrow an additional P2.5 billion to fund working capital next year, on top of the P2.5 billion needed to compensate workers to be affected by layoffs.

Jose Gabriel D. Olives, PAL chief financial officer, told reporters the airline was in talks with government-run Land Bank of the Philippines and Development Bank of the Philippines and some foreign creditors to borrow the said amount. “We will have a combination of restructuring and cutting down of fuel expenses for next year,” he added.

Mr. Olives said potential investors have asked the airline to resolve labor issues before discussions about infusing fresh funds into the airline resume. -- Ana Mae G. Roa and Aura Marie P. Dagcutan

, , , , , , , , , , 

Birds disable CebuPac plane, delay flights

MANILA, Philippines—Budget carrier Cebu Pacific Air Sunday announced delays in its trips on Sunday and their corresponding return flights after birds caused mechanical failure in one of its aircraft.

Philippine Air Says Profit Hinges on ‘Survival Plan,’ Job Cuts

 Philippine Airlines Inc. said attempts to make a first profit in three years hinge on a “survival plan” including 2,600 job cuts that have drawn opposition from unions.

“We will have a small profit this year only if we can outsource our ground-handling, catering and call-center services, and get rid of 2,600 employees,” President Jaime Bautista said in a phone interview late yesterday. “I am hopeful that I may be able to do this before the end of December.”

Bautista needs to overcome protests from ground-handling workers to complete outsourcing plans, while also tackling a separate labor row with cabin crew. The carrier, Asia’s oldest, has posted losses of $312 million over the past two fiscal years because of wrong-way bets on fuel prices, the global recession and rising competition from Cebu Air Inc.

Bautista declined to say how much savings the survival plan will generate. The carrier’s net losses shrank to $14.3 million in the year ended March, from $297.8 million a year earlier. Bautista said in August that the carrier may miss its profit target this year after 25 pilots quit for jobs elsewhere.

Philippine Air’s ground-crew union said this week it will appeal a decision by the labor department allowing the carrier to terminate employees and outsource their jobs to service providers that would hire them. The government has intervened in the cabin-crew dispute, which centers on pay and benefits, to prevent a strike.

Air Philippines

Operations at Philippine Air’s low-fare affiliate, Air Philippines, are “starting to gain ground,” with around 80 percent of total available seats filled, Bautista said. The budget carrier, which operates four Airbus SAS A320s, will take delivery of two more by year-end. Next year, six more planes will join the fleet followed by another six in 2012, he said.

Philippine Air’s parent PAL Holdings Inc. gained 1 percent to 4.95 pesos at 10:23 a.m. in Manila trading. The company has jumped 75 percent this year.

Philippine Air’s long-haul plans have been disrupted by U.S. Federal Aviation Administration restrictions that prevented it from adding flights and a European Union blacklisting of all Philippine carriers. The government has said it will take steps to improve standards.

The airline has postponed delivery of four twin-aisle Boeing Co. 777-300ERs to 2012 and 2013 because it would “lose money” operating those planes on regional routes, Bautista said. The carrier has a fleet of 39 planes currently, he said.

Philippine Air, along with its discount unit, controls about 47 percent of the domestic market, Bautista said. Cebu Air, which has a fleet of 29 jets, has said its share of the domestic market is almost 50 percent.

The EU this year banned all airlines based in the Philippines from flying in the bloc, citing “serious safety deficiencies” in the regulation of carriers. The U.S. Federal Aviation Administration in 2008 lowered the Southeast Asian nation’s aviation safety rating to Category 2 from Category 1 “due to serious concerns” about local regulation of airlines.

No comments:

Post a Comment