PAL Pushes Back Retrenchment Until Early Next Year

1 December 2020

Miguel Camus

Philippine Airlines is pushing back the timetable for its manpower reduction program until after the Christmas holidays, even as the company divulged plans over the weekend to retrench some of its most senior pilots as part of cost cutting measures.

The Philippine Daily Inquirer learned that the flag carrier’s so-called management pilots—chief pilots and instructors who make up the top of the profession’s pyramid—were recently asked to tender courtesy resignations by Nov. 30.

PAL’s management will then select which of these pilots’ resignation letters will be accepted and which will be rejected after an evaluation, a company source said, adding that some junior pilots have also opted to accept voluntary separation packages.

Speaking on condition of anonymity, a ranking airline official explained, however, that while both cost cutting measures and changes to corporate habits must be made, the culture of its pilots “is not broken.”

“It’s PAL’s morale that needs to be shored up,” the official said. “Skills need upgrading, attitudes need changing.”

Another company insider said the looming overhaul of the airline’s management pilot corps was potentially the key to effecting changes that would help the Lucio Tan-controlled airline to survive its financial troubles.

Meanwhile, employees who will be separated from the firm under a previously announced redundancy program will likely remain employed for the remainder of this year.

Originally slated for completion by December this year, the job cuts affecting 35 percent of the PAL group’s workforce of over 2,700 employees will be fully implemented by Jan. 7, an industry source told the Inquirer.

This was a key part of Project Gamma, the airline’s survival and recovery program detailed to employees last September.

The retrenchment program will involve voluntary and involuntary measures. Roughly 1,600 employees availed themselves of voluntary separation, the source said.

These are among the steps being taken by PAL as it prepares to file for court protection in the United States as early as December this year.

The fresh round of job cuts follow manpower reductions made by local rivals AirAsia Philippines and Cebu Pacific, and PAL management also said there was no guarantee this round of layoffs would be the last.

This was due to the weak business environment and the billions of pesos in recurring costs running an airline—much of it tied to aircraft maintenance and lease payments.