A Philippine Airlines official yesterday explained that PAL’s spin-off or outsourcing of its non-core businesses set to take effect on October 1 is necessary to ensure PAL’s survival and enhance its efficiency and competitiveness.
Airlines around the world have already outsourced their non-core business units as a result of the global financial crisis, PAL is among the last to implement such measure, Glenn Vallecera, PAL assistant vice president for Visayas sales and services, said.
PAL is temporarily reducing the number of its flights during the spin off transition, including 50 percent of those flying to the Bacolod-Silay Airport, except during the peak dates of Bacolod’s MassKara Festival in October, he said.
During the MassKara Festival PAL will also use its larger Airbus to accommodate more passengers headed for Bacolod and can add more flights if necessary, Vallecera said.
Vallecera, who was in Bacolod, told the DAILY STAR that 2,300 PAL employees whose functions are related to in-flight catering services, airport services and call center reservations operations will be affected by the spin off.
PAL currently has 8,000 employees.
None of the PAL employees in Negros Occidental will be affected, he said, pointing out that the bulk of the 2,300 are located in Manila and Cebu.
All of the employees to be separated from PAL will receive a Transitional Benefits Package based on a Department of Labor and Employment order that has been affirmed by the Office of the President, Vallecera added.
They will also be absorbed by the respective service providers, he added.
Vallecera said the spin-off became necessary because, in recent years PAL, together with other global carriers, experienced extremely weak passenger and cargo demand as a result of the global financial crisis.
In 2008 and 2009 PAL lost $300 million, which caused the precarious deterioration of its capitalization, he added.
He said this was exacerbated by the unabated liberalization of air traffic rights, cut-throat competition from local and regional low-cost carriers, the US federal Aviation Administration’s downgrade of the Philippine aviation safety to Category 2, and the European Union total ban on Philippine carriers from flying anywhere in Europe.
Because of this PAL was constrained to undertake extraordinary measures, he said.
Vallecera said PAL is reducing the number of selected domestic and international flights for a limited period as the flag carrier prepares for the transfer of its catering, ground handling and call center reservations units to third party service providers on October 1.
“PAL is adopting contingency measures during the transition period to shield its customers from unnecessary inconvenience and hassles. These measures will help alleviate the inevitable minor kinks in PAL’s service as we go though this difficult but necessary transition period,” a PAL statement said.
For Manila-Bacolod-Manila flights, the following will be temporarily cancelled -- PR131/PR132 that arrives in Bacolod at 5:50 a.m. and departs for Manila at 6:20 a.m. from Sept. 27 to October 21, except on October 14,15 and 19 for the MassKara Festival, Fernando Bermejo, PAL-Bacolod manager, said.
PR157/PR158 that arrives in Bacolod City at 3:15 p.m. and departs for Manila at 3:45 has also been canceled from October 1 to 6, except October 2.
The following flights have been rescheduled: PR133 Manila Bacolod from 8:30 a.m. to 7:50 a.m., and PR134 Bacolod-Manila from10:10 a.m. to 9:30 a.m. from September 27 to October 21, he added.
He said the Bacolod-Manila flight at 6:45 p.m. daily will continue as scheduled.*CPG